Hi Tom,
Well, the thing I must always remind myself of is the saying that "Nobody rings the bell when the market hits the top". All the reports and financial news coming out about the Aussie market is that market values are just slightly above long term value. This is due to the steep increase in company earnings.
Apparently in times past, it is when there is a divergence between these earnings and the climbing stock prices, that is the warning of an imminent correction.
I think what may happen is that earnings may slow down and level off but the sheer momentum of the market will continue to carry prices higher.
As earnings reports are only released half yearly it takes a while for that news to filter into the market and by the time they do stock prices could get quite extended.
The assumption we must make is that on previous market corrections such as in 1987, 1997 and 2000 all the data & news coming out must have contained no bearish news until well after the fact or else people would not have bid the markets so high in the first place.
Keep your guard up.
I must admit I keep getting tempted to plough more money into new AIM accounts as it starts to build up so I don't have any 'lazy' money hanging around.
But I can't find much value around at the moment.
Regards
Neil
AI
