After another tough year for sharemarket investors, 2012 has started on a better note. We’ve seen more positive data from the US and China however concerns remain over the state of the European debt crisis.
In Australia corporate earnings have been reasonably good although some sectors such as discretionary retail have struggled. Australian shares are offering historically high dividend yields with an earnings outlook to support them. In a falling interest rate environment they are an attractive alternative to large holdings of cash.
A useful strategy to use in a volatile market is dollar cost averaging where rather than investing a large lump sum, smaller regular investment amounts are contrbuted. I’ll explore this more fully in a future post.
For a more detailed analysis of the state of play see this report from Shane Oliver at AMP Capital Investors.