The Australian All Ords index was 6,873 at its market high and 3,091 at its recent low: a 55.0% fall. At 31 March 2009 it was 3,547: a 14.8% rally, still 48.4% below its market high.
The US Dow market high was 14.198 and has a recent low 6,470: a 54.4% fall. It has rallied to 7,609 (17.6%) at end of March but still 46.4% down on its market high.
The MSCI World index has fallen 59% from market high to recent low. It has rallied 16.8% from recent low to 31 March 2009 and would require a 108.9% rise to recover the market high, being currently 52.1% below its high.
The Australian Property Trust index (XPJ) was 2,553 at its market high and 547 at its recent low: a 78.6% fall. At 31 March 2009 it was 664: a 21.4% rally. This index needs to rise a whopping 284.5% from here to recover its market high; it’s currently 74% down.
China’s stock market has fallen 70.4% from its market high to recent low. It has rallied 30.7% but is currently 61.3% below its high.
Quoting movements in percentage terms can be a little confusing as a 33% fall will require a 50% rise to regain the initial loss.
The big question for all investors is have we seen the bottom or is this just a bear market rally and the bottom is still ahead for us?
For our clients we remain cautious. We took our clients to significant cash positions in July 2008 and progressively since. This has protected their wealth and positioned them well to ride this crisis.
The investment decision of whether to buy or sell is becoming more difficult. On one hand it is likely the economic news will worsen in the short term but on the other low interest rates and the significant government stimulus programmes should take effect.
During a period of extreme market volatility such as now, we counsel investors to remain flexible and patient.
