Most of us have been guilty at least once for changing our spending habits in June as we start considering the EOFY, I know my “Tradie” friends adopt an if in doubt buy it attitude this time of year to avoid paying too much tax for the FY. Similarly in the stock market, around this time investors usually start considering putting the broom through their portfolios with positions that are showing decent losses for the financial year prime candidates to offset any profits that may have been realised – obviously details should be discussed with an accountant before actions are taken. The characteristic can often send already depressed stocks down into oversold/deep value areas which can be attractive for the well-informed investor, the key is determining the difference between value and a company simply in trouble.
Hence, by definition June can witness some significant stock/sector rotation although that’s nothing new for the last 6-12 months. Seasonally June often forms a platform for a run up into Christmas which does dovetail with our current bullish stance towards stocks although it’s very hard to imagine risk assets losing the shackles of a rising interest rate environment in a meaningful manner anytime soon. The local market has followed its seasonality clock reasonably well in 2022 but we feel it’s likely to be harder to maintain over the next 6-months.
MM is bullish the ASX200 short-term but cautious further ahead
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Source : EquityClock.com
