Some of Australia’s biggest companies took share price battering recently. But analysts are cautioning against knee-jerk sell-offs.

Investors are understandably jittery when the share market collapses for no discernable reason. Many are still struggling out of the morass caused by the global Financial Crisis.

Since September companies such as Origin Energy and Sanots have had between a third and a half of their value wiped away from the share market. Nor have the trading giants like Woolworth, BHP Billiton and Rio Tinto been immune; with most of them sliding 20 per cent in the same time. Fortesque Metals and oil and gas group Santos have led the plunge losing 60 and 52 per cent of their market price respectively

Weak global economic conditions, plunging oil and iron ore prices, and general market uncertainty have been blamed for the latest share price sag.

But experts say the declining prices are not indicative of any larger, more fundamental problem in global finances.

They point to the growth of Telstra and commonwealth Bank stocks in the same period. Had this been another GFC, they say, no company would have been immune.

Experts are encouraging investors to stick with what they know. Don’t invest in a business you don’t understand, don’t put too many eggs in one industry basket, sort out the wheat from the chafe within that industry, and most of all – be patient.

More optimistic finance commentators are suggesting the recent price plunge could present opportunities for astute buyers. The market never moves in a straight line – there’s no need to panic.

About The Author

Someone you can depend on to respect you and care for your dog. Let me help you give your dog the life it deserves.

Leave a Reply

Your email address will not be published.