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Tom Scollon
Chief Editor
2005 is in the bag and so it is time to turn our thoughts to 2006 and start thinking of how we invest in the coming year.
Will 2006 be another year of feasting like 2005 and 2004 where profits were easy to find? Will it be a feisty year with a mind of its own, making it hard to get a real good handle on what is happening? Or might the year be a shocker – a ferocious one where all turns to muck?
I think 2006 will be a year where it will be important to take the big investment view and look beyond what we may consider our traditional investment strategies.
Experienced investors – regardless of what asset class or instruments they trade – will be looking at wide-ranging issues such as:
Will the local market provide adequate returns in the coming year?
What sectors will be hot and which frigid?
If I invest in offshore markets – which ones, how, in what ratio to my local investments?
How are interest rates likely to move and what level of borrowings is prudent?
Where are property prices heading and should I sell, buy, or rent?
These are issues I will deal with one by one in the New Year, but in the meantime I can proffer the view that it is highly likely that we will see a volatile year. This means we are likely to see markets gyrate in a way we have not seen for three to four years.
Such a scenario is fine for the savvy, educated investors as they will not only be able to manage market unpredictability, but will in fact profit from the anticipated volatility. For them, 2006 will be an exciting year.
Challenge yourself – are you ready for a volatile year? If not, think about how you might plan for the forthcoming mixed outlook. What changes do you need to make – to your strategy, skill levels, etc.?
Next week’s Trading Tutors Newsletter will be the last for 2005, with the first in 2006 being January 13.
Enjoy the ride
Tom Scollon
Chief Editor
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