One good indicator of investing in the Australian Share Market is to measure the value of the Australian dollar against the American Greenback. The Australian dollar has typically been lower than the American Dollar by about 18 to 20 cents.
In 2000, Australia introduced the GST; a tax that allowed the Australian government to pay off the debt of the country. This taxation resulted in a surplus that pushed up the value of the Australian dollar.
There was a peak high of the Australian dollar in 2000; it rose to 96 cents on the American dollar which was a record high for Australia. In the weeks that followed it slumped back down to where it had started due to the crashing of the American market.
To get a good indication of the value you need to pay close attention to fluctuations in the rates over several months so that you can get a feel for how the market may fluctuate. If the American market crashes further, the rate will rise and may even achieve a new record like in 2000; but if the American market stabilizes you will see the opposite happen. Another factor to consider is the big announcements that might affect the dollar values.
The announcement of the American reserve topping up the failing economy with a 1 trillion dollar boost boosted the Australian dollar by 2 to 3 cents; this is simply an illusion caused by the federal bailout.
The smart investor will invest in the banks and only buy shares with 8 percent interest for over 1 year. If the stocks crash resulting in a loss of money for the bank, you can know that your money is safe.
To effectively predict the market, simply sell up when the rates are high and buy when the low is within the 77 to 82 cent rate. Take a look at this informative video if you want to know more about investing.