Finance

Bargain Stocks and Cheap Mortgages...... Every Cloud has a Silver Lining

Danny Masri - Wednesday, August 10, 2011

The Dow Jones fell over 600 points, the worst single day fall since December 2008. At the close the index had lost just over 5.5%. The collapse came on the back of Standard & Poor’s downgrade of U.S. debt and government backed mortgage debt.

Investors fled to gold pushing up an ounce of gold to a record $1,720 and oil has fallen to just over $81 an almost 20% fall in a fortnight on fears of a pending U.S. recession.

What's changed for BHP or the banks in the past week? On the surface, nothing. But underneath there's the fear of a second global recession pushed the ASX into free fall shedding more than 200 points a 5.60% fall, however as the fear subsided and the panic stricken investors’ heads cooled on the release of new Chinese data and the market rallied over 250 points to produce a 1% gain for the day.

The banking sector led the way with 2.3% gains followed by energy stocks up 1.6% and our miners up 1%. The market however is still down 19% from its April highs and there are many bargains to be had for the strong willed.

“You make your money during bear markets; you just don’t know it at the time.” – Shelby Davis

3 Year fixed rates have been cut by Westpac, CBA, St George, Citibank, ING and other non bank lenders to 6.69% p.a. - 6.79% p.a. providing a significant savings from current average variable rate mortgages. For the first time since 2008 there is now almost 30 basis point advantage to fix your mortgage and ease some of those budgetary pressures all family are facing.

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