This article appeared in the December 2012 ASX Investor Update email newsletter. To subscribe to this newsletter please register with the MyASX section or visit the About MyASX page for past editions and more details.
It's predictions and resolutions time again.
By Tony Featherstone, editor
Welcome to the December ASX Investor Update, our annual forecast issue where several investment expert writers give their views on the sharemarket for the year ahead.
Year-end predictions are usually appreciated by investors who seek investment ideas for the next 12 months and want to know what some of the market's best investors are buying and selling.
Business newspaper and investment magazines are often full of 2013 tips in December and January. However, an arguably more rewarding strategy is using the summer break to tidy up portfolios; read up on the market and share investing; and form a view with your adviser, or on your own, on 2013 asset allocation strategies.
Choosing the right asset classes usually makes a bigger long-term difference than stock-picking.
This issue has several forecast stories to help readers. Tim Lincoln leads the issue with another excellent review of the sharemarket's health and the shares that meet Lincoln's safety criteria. An occupational hazard in New Year investing is focusing on the potential of companies written about in newspapers and overlooking the risks. Tim's analysis identifies some of the market's healthiest companies.
Leading investor and author, Roger Montgomery, considers the market outlook from a value perspective and outlines the top holdings in the flagship Montgomery Fund. Again, it's easy to be attracted by the potential of companies at this time of the year and overlook their valuation. With his colleague Tim Kelley, Roger has assessed aggregate market value since 2002. His conclusion: the market is the dearest it has been since 2008, but still looks reasonably valued at current levels.
Clime's Paul Zwi nominates five companies for yield investors in 2013. Some of the market's best-performed shares this year were large-caps with high dividend yields. Zwi believes that could be the case gain in the next 12 months and nominates some banks and Telstra Corporation.
The Australian Technical Analyst Association's Robert Brain complements the shares outlook with a market overview using technical analysis. He shows how studying chart patterns can give important clues to the market's direction. He expects market volatility to continue, and for the All Ordinaries index to still take several years to break through its 2007 highs.
In other markets and sectors, Evans & Partners' Mike Saba provides a useful overview of the Interest Rate Securities market and outlines the dangers of holding too much low-yielding cash in 2013. Fat Prophets' Angus Geddes and Bioshares' Mark Pachacz consider the prospects for the resources and life sciences sectors respectively. Life science companies, in particular, have an improving outlook.
New ASX Investment talk video from TMS Capital's Jeremy Hook, Dixon Advisory's Nerida Cole, and RBS Morgan's Paul Martin round out this issue with discussions on shares ideas, superannuation, and some basics on sound portfolio construction and management.
We hope you enjoy this issue. As always, do not rely on the ideas, themes and insights without discussing them with your adviser or doing further research of your own.
And don't miss January's ASX Investor Update, due on January 8. It has a special theme on getting started in the sharemarket and is always among the most read issues each year.
Many thanks to readers who commented on ASX Investor Update this year and generously gave their views in our reader surveys. We appreciate your support. Have a happy and safe summer break.
- Tony Featherstone is consulting editor of ASX Investor Update.
The views, opinions or recommendations of the author in this article are solely those of the author and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691 and its related bodies corporate ("ASX"). ASX makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, ASX excludes all liability for any loss or damage arising in any way including by way of negligence.
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