Category Investments

A difficult job

28 September 2004 Angelo Coppola

Over the last six months there have been some big swings in the market.

From the market's highs at the beginning of March to mid May, the index dropped by (-12%) on the back of resources (-22%), reports PSG Fund Managers.

Within this drop, however, industrials and financials saw mini false gains of between 2% and 4%, but then slipped to register losses of between (-4% and -6%).

At this point the market showed signs of life and rose by about 7% or 8%, over the period mid May to mid June, with loads of volatility. In the next month, the market moved more or less sideways/downwards with financials just holding it's own, industrials slipping a little (-3.5%) and resources losing (-6.8%).

Then came the short pre-rate cut run (23 July to 5 August), with resources bouncing by 8% over a two week period. Financials didn't do much and industrials moved slightly by 1%.

On the lead up to the recent rate cut announcement, the second week of August saw a drop in the markets of between (-2.4% and -3.3%). This was the lead up to the two week super bounce, after which resources registered a 17.3% gain, industrials 5.8% and financials 4.3%.

Since then (23 August to present) resources have come off a little (-2.2%), while on the other hand, however, industrials have continued their run with a further 4.6% and financials with an impressive 8.5%. Thank goodness I'm a multi-manager!

The point of this little commentary is that it is very difficult to read the market over the short-term (any period under a year or six months) and that Mr/Mrs Joe Soap who has invested his/her money in the market should not too get to obsessive about following short-term performance, but should rather find peace of mind in finding and sticking with a good manager.

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