Sit tight on investing till the dust has settled on the US election


The internet superhighway just keeps getting faster, which has the potential to make our lives better and more efficient. Companies that have taken advantage of this growth have grown at staggering rates like Apple, Amazon, Facebook and Google to name a few.

Apple has sold billions of iPhones since it launched back in 2007 and just a few short weeks ago, it released its first 5G phone, which opens up a world of possibilities for future applications. While many consumers don't have full access to 5G, the technology is here to stay and overtime it will take over 4G.

By all accounts 5G is a game-changer, as it will allow many more applications, services and products to enter our daily lives from providing high-speed camera surveillance in our streets to keep us safe, to doctors being able to view data, run tests and even operate remotely. For investors, 5G will bring with it a new generation of products and companies that could prove to be very profitable.

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So where do you look for the next Apple or Google? This is a million-dollar question and one that we cannot answer easily right now, given that not every company that invests in new technology will succeed. Even Steve Jobs, in his early days of Apple, could not have contemplated where his company would end up.

In my opinion, I don't believe telcos will be the companies that benefit the most from 5G, instead it will be smaller companies with entrepreneurial minds in the areas of education, financial management and health.

That said, there are many other areas that are set to benefit from the rollout of 5G, therefore, it is our job to keep an eye out for those that may just be game-changers.

Best and worst performing sectors this week

The market has been bearish with most sectors in the red although Consumer Staples has managed to trade up more than 1% to become the best performer followed by Healthcare, which is down more than 1% while Communications Services, Utilities and Information Technology are all down more than 2%.

The worst performing sectors include Energy down more than 6% followed by Materials, Industrials and the Financial sector, which are all down more than 4%.

Looking at the ASX top 100 stocks the best performers include Coca-Cola Amatil, which is currently up more than 15% following a takeover bid. Coles Group is also up over 4%, while Virgin Money is up more than 2%. The worst performers include Flight Centre down more than 12%, Unibail-Rodamco-Westfield down more than 11%, while Oil Search is down more than 10%.

What's next for the Australian share market

October is prone to surprises and this week was no exception, given that the All Ordinaries Index has fallen more than 1.5% on two separate days this week, with the market now trading at levels it was in May. This has put the market back into the sideways move we have been experiencing for nearly six months.

Since the end of May, the Australian market has risen just under 5% and is not looking strong, which may be due to the US presidential election being in its final stages, as the world waits for the outcome before deciding what the markets will do.

Given the strength of the down move this week, the probability of further falls is likely, although I believe any fall will be short-lived.

While I am still of the opinion that our market will rise into Christmas and beyond, given the current volatility it is important to remain cautious, as anything could occur. Right now, it is wise to sit and wait for the dust to settle on the Trump-Biden election but at the same time get ready for the opportunities that will unfold in the not too distant future.

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Dale Gillham is chief investment analyst at Wealth Within Limited (AFSL 226347). He also serves as the head trainer at the Wealth Within Institute (RTO 21917). He has more than three decades of experience in the investment industry, and is the author of How to Beat the Managed Funds by 20%, Dale's qualifications include an Advanced Diploma and a Diploma of Share Trading and Investment. He co-hosts the Talking Wealth Podcast, and his work has appeared in The Australian Financial Review, New York Business Journal, Wall Street Select and more.