Next Investors logo grey

Will All Ords stay bullish in the first half of 2019?

Published 15-JAN-2019 10:20 A.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

I hardly need to remind you that 2018 was a rough year for the ASX.

We had heightened volatility, causing the market to react severely to news and announcements.

On top of that, high tension between the US and North Korea, along with the US China trade war, had big impacts on world markets.

So, what now? Will the same trend continue in 2019?

Looking back at how the market performed in 2018, you’ll see that it was quite a significant year, with the All Ordinaries Index (All Ords) ending down 7.4%. Heavy weighted sectors such as banks and materials dragged the market down, whilst other sectors like healthcare soared.

Out of the doom and gloom, we had a great Christmas and new year, with the ASX rising 320 points or 5.8% from the low on December 20.

So what actually happened in 2018?

The Royal Commission came into full effect late December 2017, pushing the big four banks down around 20% over the year, with the financial sector down 14.78%.

Health care (XHJ) was the top performer, up 17.3%. CSL was one of the best performers, and at one stage was up as much as 64%, but closed up 30% for the year, as health care was one of the sectors hit hardest from the market’s fall. Consumer Discretionary (XDJ) was next best, up 9.6% for 2018.

The worst performers were telecommunication down 25%, energy down 10.78% and utilities down 10.1%. Materials was down 2.2%, and with the financials and materials making up 47.8 of the S&P 200 (XJO), this tells us that they kept the market down.

Sectors I like in 2019 are materials and mining, health care and consumer staples. I also like financials, as good stocks don’t stay down forever. The banks have fallen since 2015, so history suggests another down year is highly unlikely, but at this point there is still a lot of uncertainty with the banks.

Looking at commodities prices, iron ore opened the year trading at around US$76 a tonne and traded sideways for much of 2018, closing at around US$71. Oil had a volatile year, opening at around US$60, reaching a high of around US$76.9, before falling heavily to close at around US$45. Gold began at around US$1305 and then ranged around 15% in price, before finishing 2018 slightly down at around US$1281.

What to expect on the ASX this year

Right now, the All Ords is looking bullish, but will it continue to rise through 2019?

Put simply, I would argue that the answer is yes. I expect 2019 to be a great year for Australian shares with the All Ords rising to around 6,200 points in the first half of the year.

For the Australian market to challenge the previous all-time high set prior to the GFC, we need to see it trade above the highs in 2015 and 2017 at around 6000 points for approximately 2-3 consecutive months.

I believe the low I was expecting is in and there is scope for more upside. I also believe the market will challenge the all-time high in either the second half of 2019 or the beginning of 2020. That said, for this to happen, both financials and materials need to move together, which has not been the case over recent years.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in book stores and online at



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.