Question: What's wrong with the Australian Stock Exchange?
America is in the middle of hard economic times, with a bad economy, high unemployment, a massive multi trillion dollar deficit, terrible housing situation etc etc etc.
Whilst Australia never went into a recession in the GFC, will be in surplus in a year, has very low unemployment, has the best performing economy in the world, has a very strong housing sector with good house prices maintained etc etc.
**YET** .........
The American Stock Exchange (Dow) is now at record highs, higher than it was before the global financial crisis began. But the Australian Stock Exchange (ASX) has now lost around 33% of it's value since the start of the GFC.
It just doesn't make sense. What gives????????
Answer:
Think of it as perhaps the chance to invest and perhaps make some real money.
First off, the aussie stock exchange is a more relaxed exchange than the american ones.
Second, the Dow Jones is not the american stock exchange. The dow jones is one index used to track industrial companies in the united states.
Third, the dow jones is not making record highs. It is not higher than it was before the beginning of the "global financial crisis". The dow is currently running under 13,000 pts, and record highs are in the 14,000's.
Stock exchanges fluctuate all the time, it's not necessarily a reflection on the state of the economy of the country in which they operate. Different indexes reflect different aspects of market activity.
Also, the american markets behave relatively independently of other nations. Whereas the aussie markets and economy in general are very closely tied with asian markets and economies.
There is absolutely nothing wrong with the australian stock markets, or the australian stock exchange.
The Australian Stock Exchange is a marketplace for the trading of Australian and international shares and other financial instruments.
It provides updates regarding the price of shares and other company information via its website.
It also offers a wide range of educational material for consumers and businesses to become conversant with the various financial instruments it deals with.
ASX has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.
The Australian Exchange is much like the Canadian TSX and Venture exchanges....as a country we are dominant in the resource economy...metals, oil and gas....Canada has the largest listings of companies in the world in these sectors followed by Australia.
As a result both of our economies rise and fall on the demand for these commodities. The USA market place has a less emphasis on commodities so it is not affected by the decline in oil/gas/metal prices as Canada and Australia...that is why we are "under-performing" at present.
The American markets are a basket case in my opinion....there is not a lot of rhyme or reason to it....When I see scams like NRSR a so-called gold mine climbing to $1.70 on a bank account of $16 I shake my head...though I see the market has exposed the scam and dropped 40% today....I wonder how many "investors" in the USA will take this as a buying opportunity LOL.
I would not be worried about the state of the Aussie markets just as I am not worried about the Canadian markets...we have a lot more predictable stocks in commodities right now....when the prices of metals and oil rise steadily you will see lots of opportunity IMHO...don't rush it.