Ladies and gentleman what an upside down world we are living in. The last two and a bit years have delivered us swings and roundabouts, curve balls and home runs, near misses and head ons.

In the financial sector we were introduced to some colourful new terms such as: GFC (no, not the Geelong Football Club but the Global Financial Crisis), NINJA loans (No job, No income, No assets), Sub Prime, and the list goes on. Not terms we wish to hear again anytime soon.

Based on the numbers above, I would suggest one profession guaranteed to have benefited from the GFC would have been our nation’s heart surgeons. Anyone invested in the sharemarket throughout the last two years may well have had enough heart scares to last a lifetime.

Are these fluctuating figures enough to scare investors away from the sharemarket forever? If I believed that I should be in a different business. In fact what we have witnessed from Oct 09 to date is not new, and contrary to many doomsayers out there, it is not different this time.

And so what about property? The bricks and mortar investment long favoured by the Australian investor. Well it depends. Just like the sharemarket property includes many sub sectors; residential, commercial, industrial. And then of course location plays a major part;

inner city, east, west, bayside, inland. Sticking with familiarity, the table below illustrates the median property prices within the Docklands area:

Source: Real Estate Institute of Victoria (REIV)
These figures represent a drop of around 26% from the peak to the bottom of the market. They also represent a rebound of around 15%.

Where to from here?
History has shown us that periods of market and economic decline are more often than not followed by periods of sustained growth. Well managed businesses, such as our four major Banks and major Miners, will prosper whilst complex, highly geared companies are left behind.

Our nations chief Economists all predict a positive sharemarket result in 2010, with predictions of between 5% - 20% growth.

The bubble certainly burst in the property market; however, as soon as it fell, it began to grow again. We are entering a period of sustained interest rate rises which will affect property, however, unemployment remains historically low (5.5% in Dec 09) and we continue to experience a severe housing shortage.

Ladies and Gentlemen, swings and roundabouts aside, the figures detailed illustrate that by investing in quality assets over a long term your investments will overcome short term market fluctuations and continue to provide positive returns, even with a GFC!

All the best in 2010.