Five reasons to be bullish

Simon Hampel · 15th Apr, 2009

Five reasons to be bullish - ASX - Australian Securities Exchange

Much energy is devoted to determining whether the market has bottomed or has further to fall. Although we can attempt to calculate reasonable and objective estimates, the fact is no one can ever be sure. Indeed, a focus on short-term market movement can be downright hazardous and cause us to lose sight of long-term investment goals.

Perhaps a better question is: are companies trading at attractive valuations with above-average earnings and dividend growth prospects? In addition, what are the risks associated with such prospects?

I believe the next 12 months will present extremely attractive (and rare) long-term investment opportunities. An objective fundamental appraisal will help demonstrate this, and lessons from history allow for some optimism, but there is no hiding from the fact that the current apprehension and uncertainty over the global economic prospects means there are nonetheless real and significant risks.

As a long-term income investor, the prospect of short-term capital loss should be considered in the context of your portfolio objectives. To assume that an asset as volatile as a share will only go up immediately after purchase is neither realistic nor helpful. This is why you should only invest in the sharemarket with capital that you are not likely to need in the next few years.

For those who are prepared to take a longer-term view, say at least three years, good value does exist. Here are five reasons for confidence:

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Five reasons to be bullish

Simon Hampel Founder Staff Member

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Five reasons to be bullish

Simon Hampel Founder Staff Member

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