Shareswatch Australia

One of the world’s largest countries, sparsely populated, with extensive minerals in its remote hinterland deserts. Sound like Australia? This is Mongolia. On the cusp of an investment boom, fuelled by Chinese demand for resources and driven by Mongolia’s position just to the north of China’s industrial heartlands. Mongolia’s economy, like Australia’s, has defied the global gloom.

We are almost through a third of 2011 and the mood across global markets appears to be decidedly downbeat.  The bullish voices of late 2010 have now faded and even the Reserve Bank of Australia and Federal Treasurer are sounding cautious. But don’t be fooled by the talk that recent events have caused the global economy to face headwinds because the reality is that 2011 was always going to be a tough year.

The recent announcement by Julia Gillard that she is breaking an election promise and will attempt to bring in a Carbon Tax should come as no surprise to anyone. It is simply a reflection of the madness that is the Greens/Labor Party alliance and another example of a policy developed by a Government hooked on spending and raising taxation.

Often lost in the debate about house and home prices in Australia is the discussion regarding if our national obsession with housing is good or bad for the overall economy.  Instead of rejoicing that residential real estate prices in Australia rose during the global financial crisis, maybe we should be looking a little closer at why prices are rising to see what problems this might be causing.

Well after a few weeks of uncertainty following the federal election in Australia, the Australian Labor Party (ALP) has managed to pull together a ragged alliance and hold onto power. Some people say that a minority government will be a refreshing change and can work well, but I believe that the coalition that Julia Gillard has put together will result in few tough decisions being made and could end up damaging the Australian economy.

As the Australian ASX All Ordinaries Index slowly crawls towards the 5000 level again, now is a good time to look at how some stocks have come through the global financial crisis. Does it look like a global recovery has finally taken hold, and is the Australia stock market poised to surge higher over the next few weeks?

Despite how convincing market experts appear on television or how cleverly they put pen to paper, the truth is that nobody knows for sure how the global economy will perform next year. For every positive sign or trend there is a worrying one, and despite the Dow Jones having some strong days recently the fact is the U.S. economy is still in bad shape.

It would be easy to get the impression by listening to the Government, the Reserve Bank, the Treasury, financial journalists and many economists that it is undeniably good if Australia’s Gross Domestic Product (GDP) expands, but is that entirely correct? Is there such as thing as bad GDP growth?

If you were to believe the various ramblings of Kevin Rudd, Wayne Swan, Glenn Stevens and Ken Henry, then you would be under the impression that the Australian economy is about to power ahead in 2010. But if the IMF expects global growth to be slow, why would Australia be set to do any better?

As the global economy slowly recovers then perhaps investing in a stock that should benefit from this growth is worth looking at. One such stock is Servcorp, which offers investors exposure to the serviced and virtual office market not only in Australia, but also in number of major cities across the world.

The one sure thing about a bear market is that it provides fertile ground for the rise of investment myths and for people talking up certain assets classes by feeding on the fear of investors. But before you leap into some new investment it is probably a good idea to be aware of some of the common shares related investment traps, tricks and myths that exist.

Sometimes as stock market investors it is useful for us to step away from the daily noise created by market analysts, company CEO’s and news headlines and try to look at the big picture.  One way to do this is to just get back to the basics and look at hard data to see if this helps us spot any trends regarding in the global economy. So it seems reasonable that a good place to start would be by looking at the top companies across the world to see who is making money and why.

Like many Australians I have been frustrated for many years over the slow progress that was made in getting affordable high speed internet connections widely available across Australia.  However in order to get a world class communications network deployed we need the private sector to be in the driving seat and for the government to be involved as little as possible.  Yet thanks to government mismanagement, Australia is now about to spend a fortune of taxpayers money to roll-out a national broadband network.

There is no doubt that the Japanese economy is suffering as a result of the global economic crisis. However much of the reporting in the western media is at best poor journalism and at worst, simply wrong.  So rather than focus on sensational attention grabbing headlines, let’s look at some forecasts and facts.

It seems that almost everyday we hear about another government plan aimed to stimulate the economy. Finally it seems the government has stopped blaming the previous government for inflation (and a large budget surplus) and is now blaming the world for the slow down in the Australian economy.