Welcome to Thursday. Here are the five things I'm looking today on the Australian share market.
1) The S&P/ASX 200 Index has slumped below the 5,500 mark after the Australian unemployment rate unexpectedly jumped to 6.4%.
This followed a flat day on Wall Street, the Dow adding just 14 points to close at 16,443. On Bloomberg, fund manager Sam Turner said…
"We might slip back to flush out the remaining weak hands, but we're recommending buying this dip."
I couldn't agree more. The best time to buy quality stocks is always now. Buying on the dip, when markets are lower, is even better.
Related > Free guide — Your 10 Step Guide to Making $1 Million in the Market
2) Despite the stock market's recent wobbles, Credit Suisse is sticking to their year end forecast of 6,000, saying the ASX will rise because there just aren't enough equities to meet demand. Our own Tim McArthur agrees. Read more here.
In the face of continued low interest rates, by comparison, dividend paying shares like Telstra Corporation Ltd (ASX: TLS) and Insurance Australia Group Limited (ASX: IAG) look very attractive.
3) Gold futures jumped the most in 6 weeks as traders flocked to the so-called safe haven in response to rising tensions between Ukraine and Russia.
On Fairfax, Charlie Bilello said…
"Concern about a correction in the equity market is also bringing some people to gold."
Don't be fooled — gold is no safe haven. Stocks like low cost gold producer Beadell Resources Ltd (ASX: BDR) are partying today, up 6%, but look at Silver Lake Resources Ltd (ASX: SLR) as a chilling reminder of what can go wrong — it's shares are down a whopping 85% since the beginning of 2013.
My advice to investors fearful of a stock market correction? Don't buy gold. Buy the dips. See 1) above.
4) Top Tweet of the day
Parents, teach your kids to invest. Chances are they won't learn it in school.
— The Motley Fool (@themotleyfool) August 6, 2014
5) Stock of the day comes from Ryan Newman — Veda Group Ltd (ASX: VED).
Ryan bought shares in the data analytics group roughly one month ago when they were trading hands at $2.09. Today the shares trade at close to $2. Still, Ryan's not perturbed, declaring he'll likely soon add to his existing holding.
No wonder, too, given Veda Group operates as a monopoly in the credit information provision market with approximately 85% market share. Read more here.
