Wry & Dry

So you want to be a day trader when you grow up?

Wry & Dry returned to Australia to find the share-market more volatile than Donald Trump's hairdresser.  As readers can see from the chart (showing the daily percentage change in the All Ordinaries Index - the most widely used measure of the the share-market) it has been a messy few months for more than the Liberal Party.

Don't get W&D wrong.  The share-market is usually volatile on a daily basis, but not with this magnitude. In 30 of the 62 business days since 30-Jun-15 the market has moved more than 1% from one day to the next.  With a massive 36 changes from positive to negative or vice-versa.

VolatilityThe key point is not really the daily volatility - all that tells you is that trading volumes are light and that a few speculators are pushing around the market.  Just consider the slightly longer term fact that the market has returned -6.4% this FY.  And the interposition of the end-of-fiscal-year time-divider obscures the fact that the market is now down 14.3% since its peak on 27th April.

W&D hesitates to predict when the volatility will reduce, basically because it doesn't matter.  Readers/ investors just need to be patient and ignore the market 'noise'.  Look for opportunities that are inexpensive (i.e. low P/E), have good growth prospects and a decent dividend.  And remember, size doesn't matter. 

By the way: W&D's career advice.  Don't become a day trader.