After the huge share market losses of recent weeks, Australians have well and truly retreated into conservatism.
The recent AIA Investor Sentiment Survey for July showed that just 6% of Australians have a “bullish” attitude towards the Australian share market, while 48% remain decidedly “bearish”.
Vas Kolesnikoff, CEO Australian Shareholders Association says there is no doubt we’ve been spooked, and to look no further than the 24% performance drop in the Australian markets over the past six months.
He advises cautiousness, but most importantly an understanding of what’s happened and why. Related article: How market volatility affects YOU
“My advice to shareholders is to look carefully at their individual positions, understand that the market won’t immediately recover, understand global issues, and that falls in the overseas markets will and do affect ours,” Kolesnikoff said.
He also says what we’re seeing is a complete reassessment of global equities, and in times of uncertainty, such as right now, it’s worthwhile looking towards the more stable markets of resources, and those in the daily supply chain.
“In times of uncertainty, these kinds of markets will be more stable, but it doesn’t mean they’re immune,” he added.
Despite the findings of near-record low consumer sentiment, the tide may just be turning, and Rudi Filapek-Vandyck of FNArena said “When the number of bulls sinks to a new low and the number of bears is at a high, it’s probably time to start preparing for a turn in market sentiment”.
Keep it in perspective
Make no mistake, the stock market has been taking investors on a rollercoaster ride and there have been huge and significant losses. However, losses have not necessarily been the case across the board, and the first step is to remind ourselves that many companies remain in excellent health despite fallen share prices.
Unlike during the GFC in 2008, debt levels are generally low, with many listed companies generating profits. Consider your objectives, and take a look if there are opportunities to buy into shares which would ordinarily have a much higher share price.
Be alert but not alarmed
When it comes to investing, the key is to remain closely observant, and not to freak out if your shares take a dip. Remember to think about what you could change in your portfolio, and as always, consider getting advice if you’re planning on making significant changes.
When circumstances change, be willing to change your mind. Fortune favours the brave!
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