Most read
Bitcoin price jumps, but how high can it go?...
Bitcoin price jumps, but how high can it go?...
Latest Podcast
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Resources
There is $17.5 billion in lost and unclaimed super across ...
There is $17.5 billion in lost and unclaimed super across ...
Invest
ASX smashes through 7,000 point barrier
The Australian sharemarket has set a new all-time high, with the S&P/ASX 200 index breaking through the 7,000 point barrier for the first time in history.
ASX smashes through 7,000 point barrier
The Australian sharemarket has set a new all-time high, with the S&P/ASX 200 index breaking through the 7,000 point barrier for the first time in history.
The S&P/ASX 200 ended Thursday’s trading period 47 points higher, growing by 0.7 per cent before closing at 7041.8.
Anthony Doyle, cross-asset specialist at Fidelity International, believes that while there isn’t much difference between the ASX 200 at 6,995 and 7,005, crossing the 7,000 point barrier could trigger emotional investors.
“Behavioural economists will tell you that big, round numbers (like 7,000) can have a large influence on investor emotion and behaviour,” Mr Doyle said.
“I have seen academic research which shows that market-wide attention-grabbing events can lead investors to sell equities as they perceive that the level of the equity market is high.”
“And at an individual portfolio level, it can result in investors selling high-performing equities, while holding on to underperforming companies as they hope to recoup some losses.”
“As a result, we often see a few lacklustre trading sessions in the days following attention-grabbing events,” Mr Doyle said.
Deakin University associate professor of finance Victor Fang reiterated Mr Doyle’s thoughts, noting investors shouldn’t panic.
“Hang in there and resist panic selling based on short-term fear and overreaction to global events,” the professor said.
“The Australian sharemarket has started the year strongly and is up around 5 per cent in January, despite a backdrop of domestic risk and international tension,” he said.
Does the new record matter?
Mr Doyle said breaking the record both matters in the very short term and has no impact in the long term.
“While conditions remain constructive for the Australian equity market, it’s certainly not without risk,” Mr Doyle noted.
However, the investor believes the rise of populism can be a threat to global growth as nations look inward instead of outward.
“Populist policies like protectionism (trade wars), anti-immigration and government intervention are all anti-growth in nature and are likely to continue to put downward pressure on the already sluggish 1 to 2 percent economic growth range in most developed economies,” Mr Doyle said.
Despite global concerns, domestically, Mr Doyle is bullish on Australian assets.
“We are still positive on the Australian equity market this year. We’re in the unusual position of having tailwinds from both monetary and fiscal policy.”
“Having pretty much used up all monetary policy ammunition, governments are now being asked to step up with fiscal policy to help economies break free of this very low-growth world.”
“This will likely come via significant infrastructure development, which should be good news as low interest rates combined with fiscal stimulus is normally a positive environment for equity returns,” the fund manager concluded.
About the author
About the author
Stock market
Ethical investing tipped to drive ETF market
Following a volatile 2020 where investors poured into ETFs, shareholders are tipped to focus on ethical investing and technology as the recovery from the COVID-19 pandemic continues, an industry expe...Read more
Stock market
‘The concept of collective investing is here to stay’
The phenomenon of retail investors acting as a collective, led by social media and celebrity investors, is here to stay, says one expert. ...Read more
Stock market
What is short selling and should you do it?
Short selling stocks may sound like a good investment strategy when you’re after quick and big returns, but is it worth the risk? Here’s a rundown of why shorting stocks may not be a sound stock t...Read more
Stock market
How much insider trading really happens?
There are at least four times as many people who get away with insider trading than the number of those caught by prosecutors, new research has revealed. ...Read more
Stock market
Why you should be wary of the tech stock bandwagon
After a strong year of tech stock gains, tech shares have been on a decline in recent weeks as increasing bond yields rattle equity markets. ...Read more
Stock market
GameStop set to release first earnings since Reddit stock market rally
The video game retailer at the centre of the WallStreetBets saga is set to post its first quarterly market update since the fiasco began, with social-media investors heavily tipped to continue backing...Read more
Stock market
What is thematic investing and why it could be a fad
Long-term investors are being urged to ignore market fads and instead focus on identifying major socioeconomic, environmental and technological themes, an industry expert has explained. ...Read more
Stock market
ASX 300 companies cash in on JobKeeper scheme
Most of Australia’s ASX 300 companies that received JobKeeper payments did not need the subsidy as they recorded increases in profits throughout the calendar year, according to a study. ...Read more
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
The continued property boom, ethical investing and engaging with your super fund
Listen now
Stock market
Ethical investing tipped to drive ETF market
Following a volatile 2020 where investors poured into ETFs, shareholders are tipped to focus on ethical investing and technology as the recovery from the COVID-19 pandemic continues, an industry expe...Read more
Stock market
‘The concept of collective investing is here to stay’
The phenomenon of retail investors acting as a collective, led by social media and celebrity investors, is here to stay, says one expert. ...Read more
Stock market
What is short selling and should you do it?
Short selling stocks may sound like a good investment strategy when you’re after quick and big returns, but is it worth the risk? Here’s a rundown of why shorting stocks may not be a sound stock t...Read more
Stock market
How much insider trading really happens?
There are at least four times as many people who get away with insider trading than the number of those caught by prosecutors, new research has revealed. ...Read more
Stock market
Why you should be wary of the tech stock bandwagon
After a strong year of tech stock gains, tech shares have been on a decline in recent weeks as increasing bond yields rattle equity markets. ...Read more
Stock market
GameStop set to release first earnings since Reddit stock market rally
The video game retailer at the centre of the WallStreetBets saga is set to post its first quarterly market update since the fiasco began, with social-media investors heavily tipped to continue backing...Read more
Stock market
What is thematic investing and why it could be a fad
Long-term investors are being urged to ignore market fads and instead focus on identifying major socioeconomic, environmental and technological themes, an industry expert has explained. ...Read more
Stock market
ASX 300 companies cash in on JobKeeper scheme
Most of Australia’s ASX 300 companies that received JobKeeper payments did not need the subsidy as they recorded increases in profits throughout the calendar year, according to a study. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
