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The ASX hits seven week high … and why you need to understand crypto before investing in it

Published: 12:35 05 Nov 2021 AEDT

News Corporation -

The ASX maintained its solid run through morning trading, entering midday in the green.

The S&P/ASX200 had gained 42.20 points or 0.57% to 7,470.20 at time of writing, having hit a seven-week high earlier in the day when it jumped 0.7% to 7,477.2.

Over the last five days, the index has gained 2.00% and is currently 2.13% off its 52-week high.

The top-performing stocks in this index are currently Link Administration Holdings Limited up 10.85% and News Corporation up 9.78%.

Other top performers include CBA, Macquarie Group and CSL gaining 0.9%, NAB and Wesfarmers up just over 1% and Newcrest’s 3.4% gain. Link was up 10% on the back of a takeover offer from Carlyle.

RBA’s positive outlook

The Reserve Bank issued its Statement on Monetary Policy this morning, fleshing out its revised economic forecasts and saying that "while many uncertainties remain, a rapid trajectory of recovery from the recent setback seems increasingly likely".

We could still be looking at 2024 for interest rate rises.

"If the economy evolves in line with the central scenario, wages growth is expected to have edged up to around 3% and underlying inflation would have only just reached the middle of the 2 to 3% target band by the end of 2023, for the first time in seven years.

"Depending on the trajectory of the economy at that time, the Board judges that this outcome could be consistent with the first increase in the cash rate being in 2024."

Reducing crypto risks

We had our weekly catch-up with Wealth Within founder and analyst Dale Gillham who gave us his take on the popularity (and dangers) of cryptocurrency after the CBA moved this week to launch a service to buy and sell crypto assets.

“There is an increasing number of Australians entering the world of cryptocurrencies in the hope of chasing high returns, yet many are blissfully unaware of the inherent risks involved. Recent research suggests that one in five Australians are now either investing or intend investing in cryptocurrencies in the near future.

“In response to this, the Commonwealth Bank announced this week that it would launch a new service that allows customers to buy and sell crypto assets. This follows ASIC’s announcement in July that it is looking to regulate cryptocurrencies and crypto assets, as outlined in the paper titled ‘Senate Select Committee on Australia as a Technology and Financial Centre’.

“Until recently, trading cryptocurrencies was considered very high risk, as it was largely unregulated, which encouraged dodgy practices by some providers. However, the news this week by CBA and the intentions of ASIC to regulate this market does add some respectability, which I believe will reduce some of the risks Australians have been subjected to when trading cryptocurrencies.

“That said, many investors fail to learn from the mistakes of the past and cryptocurrencies are just the latest vehicle investors are jumping into in the hope of making some quick gains.

“In the last few decades, investors have chased futures, options, foreign exchange, contracts for difference and tech stocks together with a number of dubious schemes. Yet, the vast majority of investors who purchased these products with little to no research or education because of the lure of huge gains failed to achieve the speculator profits they were hoping for.

“The number one rule to long term success in any market is to understand the vehicle you are investing in and to manage the risks of that investment and the crypto market is no different.”

On the small cap front

Queensland Pacific Metals Ltd (ASX:QPM) is up 6.98% after confirming its TECH Project in North Queensland will not only be net-zero carbon but also a significantly net-carbon negative battery-grade nickel manufacturing plant.

Hiremii Ltd (ASX:HMI) is up 4.82%. HMI will acquire 100% of recruitment business Inverse Group Pty Ltd.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

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