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Monday, 10 August 2020
Recently trending A hard dose reality check on vaccinesAfter 30 years of investing, I prefer to skip this partyAustralian house prices: Part 2, the bigger picture How we have invested during COVID-19How to handle the riskiest company results in history
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With signs that the economic recession will not be as deep as first feared, many companies will emerge strongly with robust business models. Here are the sectors with the best opportunities.
While the shutting of Australia’s borders to international travellers and quarantine measures is damaging to certain sectors of the economy, it is not uniformly negative for all companies.
Why invest in an unlisted fund by a well-known, experienced fund manager when the equivalent listed fund is offered at a substantial discount? Maybe there's a structural problem to fix here.
Traditional SMSF asset allocations to cash, banks and property are changing as ultra-low interest rates start to bite, and SMSFs take on more diversified equity and fixed interest exposures.
Looking back over the last decade shows the factors which have driven success for some companies and failure for others, driven by falling interest rates, a lower Aussie dollar and technology changes.
Many investors are tempted by high yields on shares, but when they are not sustainable, and in weak businesses, the outcome is disappointing compared with better quality and lower yields.
The current yield on a share or trust is simply the latest dividend divided by the current share price, an abstract number at a point in time. What really matters is the income delivered in the long run.
Investing in equities for their dividends and income is not as easy as it sounds. High dividend stocks are more volatile and the dividend is not a sign of quality or value. Take care chasing yield.
Profits results in August 2019 were overall poor, and other factors are in play that influence share prices. It is difficult to jump aboard a profit announcement and make money in the short term.
There’s a lot of talk of the WAAAX stocks causing fund underperformance, but they’re simply not big enough compared with choosing the wrong winners and losers among the large cap stocks.
SMSFs are continuing to use the ASX20 as a bargain buy, but are also diversifying into mid caps and international shares via direct investments, ETFs and LICs.
About half of companies reported as expected in their latest financial results, and the rest were split between favourable and disappointing. Valuations are not cheap but some companies deserve to be expensive.
With 160 programmes underway and billions of dollars spent on COVID-19 vaccines, investors are drawn to optimistic news. However, the company that has developed most new vaccines has a sober view.
Eventually, prices become so extreme they bear no relationship to reality, and a bubble forms. I believe we are there today, not for all stocks but for many in the technology space.
There is good reason to believe the negatives will continue to outweigh the positives over the next 12 to 18 months. There is more concern about house prices than the short-term indicators suggest.
It is better to miss a results bounce and buy after the company has delivered than it is to step on a landmine. With such uncertainty, avoid FOMO by following these result season investing tips.
Three key indicators are useful for predicting the short-term outlook for house prices, although tighter lockdowns make the outlook gloomier. There is enough doubt to create cause for concern.