Time To Take Stock

Sydney Morning Herald

Saturday February 23, 2008

Vita Palestrant

Australia cannot escape the tsunami sweeping through global financial markets. Already several Australian companies have been affected and no one knows for sure what is around the next corner.

Many of our readers have been left dangling: these uncertain times will test their resolve. To help, Money has pulled together its team of specialist writers to guide you through the issues. Painful as it is to suffer losses on your shares and superannuation, it is a reminder that investment markets are cyclical.

As Ross Gittins points out, you can be confident a downturn will be followed by an upturn and that the longer-term trend is steadily up.

The worst thing you can do is follow the herd - buy shares at the top of the market and sell at the bottom. Anyone who invested $10,000 in the Australian sharemarket via an index fund just before the 1987 crash - and didn't sell - would be sitting on about $50,000. Not a bad result for sitting tight.

Unless you are a trader or highly leveraged, you should take comfort from the fact that good quality assets - whether shares or property - will ride out the turbulence.

As Annette Sampson writes, corrections can be a good thing: they remind us of the fundamentals of what investing is supposed to be about. It exposes poor investments for what they are and offers astute investors the chance to buy quality assets at marked down prices. Stuart Washington looks at the risky side of debt and offers strategies for margin loans. Noel Whittaker, our resident financial adviser, tackles readers' urgent questions.

And what of property? Jonathan Chancellor warns spruikers are likely to emerge to flog overpriced property on the back of sharemarket jitters. That said, we pinpoint properties likely to do well in this environment including commercial property. And if you want a risk-free 7.5 per cent, we find the best deposit rates.

Money is Australia's most trusted investment section. This special edition will give you the comprehensive, independent analysis you need to make sound judgments.

Keep up to date by reading Money every Wednesday in The Sydney Morning Herald.

© 2008 Sydney Morning Herald

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