ASX: Jolly July
The ASX has just had its best July since the euphoria of the post-GFC rally in 2009.
Rewind to 2009
That July (2009), the ASX, including dividends, rose 7.7%. And those were euphoric times. Consider the market then rose 47% in seven months! Nice work, if you can get it.
But remember, then the market was coming off an over 50% fall from its October 2007 peak. Ah, those were the days.
July 2016 is a different kettle of fish. There is little market euphoria, just a little buoyancy with the expectation of lower interest rates.
And in 2009 the ASX was trading on a (forward) P/E of about 11, well below the long-term average of 14.7. So then the market was inexpensive.
In July 2016 the ASX is trading on a P/E of 16.5, and would be higher but for the boost from higher expected profits from recovering resources companies.
So now the market is expensive.
This is a mini 'break out' and might continue for a few months. And, after all, it's just the market. Not your portfolio.