Market rally – has it come too far?

The Australian sharemarket has rallied strongly since its lowest point in March this year.

A rally from the bottom of the market can create a false signal that markets have rallied too far and too fast, so it's worth being clear on the numbers. We are not even half way back yet.

From its low point of 3112 (6 March 2009) to the present level of 4541, the Australian All Ordinaries Index has risen by 46%. But the current level is still 34% lower than its November 2007 high.

In other words, the rally has only recovered a little more than one third of the decline. The Australian sharemarket still needs to rally another 51% from current levels to return to its previous high. 

Important Information

The above information provides an overview or summary only and it shouldn’t be considered a comprehensive statement on any matter or relied upon as such. The above information doesn’t take into account your personal objectives, financial situation or needs. It’s important for you to consider these matters before making any financial decision and I recommend you seek help from a financial adviser.