The market’s sideways trading still accurately reflects an economy that has failed to break decisively out of its postmining slump. It will take some acceleration in business activity before investors are likely to see growth revert back to the long-run average. Meanwhile the valuations investors are paying for earnings remain elevated and we caution against expectations of above-average returns.
However, low volatility and a range-bound market can mask opportunities and threats. Large caps broadly disappointed at recent results while the small caps fared better in absolute performance. Morgan’s think this signals a change in leadership and should see investors again seek growth outside of the market stalwarts. Several names now offer much more compelling upside in a directionless market, supported by upcoming catalysts.
Read the full Morgans monthly Investment Watch update.
For investment advice call PPT Financial on (03) 5331 3711.
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.