This seems to be the question on everyone's lips, have we seen the bottom of the market and is it “safe” to go back into the water?

Well nobody knows however there are some encouraging signs beginning to appear and the general consensus is that whilst we will experience more turbulence in the second quarter of 2009; the share market is expected to improve considerably in the second half of the year.

The trick is to make sure that you are invested when the inevitable recovery does occur and consideration needs to be given to previous historical data which shows the share market clearing leading the economy by some 6-9 months. Accordingly whilst we expect general economic conditions to be horrible for the majority of this calendar year, we expect the share market to commence its recovery well before the economy improves. In the current environment we recommend that clients invest in equities in a number of tranches over the coming year to reduce their timing risk.

One of the major benefits of the current economic slowdown is the large reduction in interest rates. Unfortunately not all lenders have seen fit (or are able due to their higher cost of funds) to pass on the full extent of the reduction to borrowers. At Stable Financial we offer a free no obligation review of your existing facilities via our associates at Lonsdale Finance Choice.

I cannot emphasize strongly enough the importance of adequate insurance at this time of the economic cycle as you and your family do not want to be forced into selling assets at depressed prices to fund your commitments if an unforseen event should occur. Adequate insurance can provide you with the necessary funds to see you through your time of need and consideration should be given to funding the premiums through superannuation if cost is an issue in these difficult times.

Our recommended action plan for this quarter is:
» Don’t stay on the sidelines – begin investing
» Have your existing loans reviewed – there could be significant cost savings in the current market
» Make sure you are adequately covered by insurance – don’t be a forced seller