Why has the Australian sharemarket fallen further than Wall Street?
Robert Gottliebsen: The Australian market is dominated by resources and bank stocks and does not have enough industrials such as CSL and Telstra. Resources were hit hard by the forced hedge fund selling of commodities, the Australian dollar and mining shares. In addition, there are fears about the economy in China. Australia’s banks have been caught up in the global re-rating of banking stocks and the fact that they normally suffer in any downturn. 2. Is it a good strategy to buy bank shares and rise out the slump while getting a 9% yield? Even if the dividend falls, it will still be better than bank deposits. Alan Kohler: Some banks will have increased bad debts and will struggle to hold their dividend but they have eliminated most of their competitors, so in the long term they should do well. James Kirby: You have to remember that bank yields are based on the expectation that banks will not cut their dividends. Now nobody is saying they are going to cut, but Mike Smith of ANZ has rai
