We end another volatile week that only confirms that markets are not efficient at valuing shares and almost anything!
The trend has now changed from Growth (i.e. new companies) back to Value (i.e. older/mature companies). This is because investors are now looking for dividend paying companies that will protect them against inflation concerns which are expected to result from excessive global government spending programs to help the economies recover from the pandemic. This did initially work against us but today we recovered some of the losses, when some people went bargain hunting, as some of these Growth shares were oversold. This doesn’t mean the volatility is over but it does show how quickly things can change and why “you have to be in it, to win”.
Here’s the latest on the portfolio and pending orders which we have placed as I actually like it when the market falls and gives us the opportunity to buy again:
On the other hand, our Cryptocurrencies got sold off – something we just could feel was due but impossible to know excactly when! This is a high risk investment (we went from about A$1,800 gain to A$1,110 loss) because there’s very little fundamentals to these other than guessing what will be the “market demand”. So they can always be sold off and we could lose 90% or just as easily rise another 100%? This is the main reason why I tread with caution (we still have A$14,000 in cash) and, whilst I am hearing that the market may now be oversold, I would like to see them find some support (i.e. prices stabilise) before buying more. The main problem is that these don’t generally move sideways but tend to go quickly up or down because there’s still not enough buyers and sellers to give it more stability yet. In time, this will change as more accept that some of these will offer a viable alternative to cash (like Stellar’s XLM which you can read about here). So we are not going to panic sell and will give this time to pay off over a longer period.
We also have provided another price chart (in AUD) to show a typical daily move (yesterday was down and today it’s up again). Anyones guess on what will happen tomorrow but you may like to listen to other views here.
