Articles for: Fundamental Analysis

The most important thing you can do prior to becoming involved in the market is to ensure you have realistic expectations.

This reporting season has seen most companies reveal substantial drops in earnings, but despite this we have actually seen many stocks rise after the event.

These past few weeks have been marked by a raft of capital raisings and dividend cut backs as companies struggle to lower their debt burden and shore up their balance sheets.

In November of 2007, after five years of phenomenal growth, the Commonwealth Bank of Australia touched a new record high of $62.16. Of course since then the bank, which was the very definition of a solid blue chip company, has since dropped over 60%, last week returning to levels not seen since early 2003.

From an investor’s point of view, it would be dangerous to think that things will turn around quickly and rush to buy up stock purely because they are “cheap”.

It’s amazing how many novice traders are lured to the so called penny dreadful stocks

The outlook for 2009 is far from certain and there is considerable debate as to whether the market has bottomed, and whether we will see any substantial recovery within the next 12 months.

There’s no doubt that 2008 will go down in history as one of the worst years on financial markets.

Global economic crisis notwithstanding, it’s a safe bet that many Australians will devote a sizeable part of the family budget to buying gifts for friends and family.

It’s a fairly straightforward matter to justify the expectation that markets will recover, that the vast majority of companies will remain solvent and that the economy will pick up.