Share prices have come down a lot recently. Which ones do you recommend to buy?
Which Oz shares on bargain now?
Lcheapo999 on 12/07/2015 - 23:27
Comments
OZB
I think you need to use more words if you want anything of value to emerge here.
Are you investing for the long term, or seeking a speculative punt for 6 months?
Do you have $1k, $10k, $100k to invest?
What is your risk tolerance? Can you afford to lose everything if there is a better than 50% chance you will double your money? Do you particularly desire dividends?
I can name a number of stocks that are 90% off their highs, so "on special" but probably aren't worht investing in.About 50K. Of course I can't afford to risk losing them all. Perhaps losing 10% is still ok. When I said bargain, I mean the current share price against its asset value and estimated future profit of the company.
If you invested in, for example, Woolworths earlier this year you would have lost more than 10%. Would you have sold when your investment was down 10%? Would you have held on and lost 20%?
What if you invested in Flight Centre in April and saw your investment rise 10%? Did you sell then? If not, when it dropped, did you sell and lose 20%?
If you are truly unable to accept a 10% loss on your capital, you cannot invest in shares.
In 2007 share lost 50%, in 1929, 90%. If you held on after 2007 you would still be behind (although dividends would have helped). If you held on in 1929 it took 20+ years.I'm not being glib. The share market relies on a constant supply of new investors to buy high and sell low to provide the profits for those that don't.
You need to work out the personal rules you will invest with, and how to handle gains and losses.
Only when you can describe the actions you will take if your investment rises and falls, and what time frame you will take action over, can you reasonably get an idea of good share investments.An example might be:
I intend to invest for 5 years. My goal is to achieve better than 7% p.a. returns over that period (approx turn $50k to $70k). I won't get greedy, and if I reach my goal early I will sell and put the proceeds in the bank. I will list 5 bullet points of what I expect to drive my investments performance. If circumstances change to prevent those from occurring, I will sell and re-evaluate. I will hold my nerve if prices decline if the bullet points (my investment case) remains true. I will not allow one particular stock to become more than 20% of my total investment. I will identify risks for each stock that if they become true will be triggers for me to sell. If at the end of 5 years I have not reached my goal, I will reassess each stocks investment case and risks and compare it to alternative investments before deciding to continue or sell.Great advise. Thanks.
Btw are you related to Sir Skeggs from NZ?@cheapo999:
Not that I know of, but it is a reasonably uncommon name, so probably a 100 years ago or something.
Which ones do you recommend to buy?
The undervalued ones.
exactly!
so buy them…
This is the wrong place to ask for stock advice. This is as good as asking for stock tips from the shoe shine boy down Martin Place in Sydney CBD, just because he "heard" from the fund managers what they are buying while shining their shoes.
You need to look for your bank's financial planners, who are registered with ASIC. They will ask you to sign a Statement of Advice and they are accountable if negligence is found when shit hits the fan…Plus, they will analyse your situation and financial goals to structure a suitable portfolio for you.
Apart from taxi drivers, financial advisors affiliated with banks are probably the worst place to go for advice .
Several years ago one of big four advisors told me to sell all shares in my SMSF and "invest " in a portfolio of managed funds( all no doubt with trailing commissions).
Two months later he rang to say he had left the bank and could offer me much better advice and returns regarding the investments ie he had originally tried to get me into investments which the bank had a direct connection with.I agree, most of them just try to earn commissions by pushing in-house products.
So you rather get advice from the shoe boy or the homeless man down the street for stock advice?
Going to a financial planner doesnt mean you dont have to do your homework. They are driven by commission, but who isnt? Even the perfume sales man at Myers could be driven by sales target, but that doesnt mean they are not giving you the best advice they can for the product that suits you. However, that doesnt mean there are no dodgy ones out there, seems like you met one.
Managed funds are not all bad. In fact the top tier fund managers can consistently outperform the index for the majority of the time. They also have tools to manage the portfolio down to the micro level (including risk management) and make make asset and sector calls for investors. Banks will always try to push their in house funds first, eg Westpac selling BT funds. That being said, BT is actually a pretty good investment house. So while you take all advice with a grain of salt (including your mom's), do some research to make sure you are getting a good deal.
"Going to a financial planner doesnt mean you dont have to do your homework. They are driven by commission, but who isnt?"
Same here, taking advice from Ozbargainers doesn't mean we don't do our homework. At least they are not driven by commissions. Good to hear from many different perfectives.
You want professional advice, there is a cost. If you sign an SOA, they are liable. You get advice from Ozbargin, you are not protected if there is negligence. If you have a health issue, would you prefer to seek a doctor's professional advice, or an Ozbargainer's advice.
For example, if you told your financial advisor you want capital protection as priority and they sold you a speccky small caps IT stock because they believe there is a huge upside potential, they have essentially breached the SOA. You can sue them.
You really have to weigh whats important for yourself. Remember, you pay peanuts, you get monkeys…
"So you rather get advice from the shoe boy or the homeless man down the street for stock advice?"
Given the quality of advice from the Financial Planner from one of the big 4 I had contact with the answer to your question is yes.
My other experience with a financial planner ended when I found he had point blank lied to receive larger commissions .
That experience cost me around $6000 .@IanC:
You may want to seek recourse from the bank for the dodgy advice. The tolerance level for this sort of crap is very low nowadays ever since the CBA lawsuit for $200m in 2014.thanks.
the the bank advice fortunately I did not act on. therefore no loss
the 6K was in relation to management fees ( a long story) and was a 50% off settlement rather than a court case.
not saying for a second ALL financial planner are rogues….just relating my two experiences.
my now deceased dad once gave me a great piece of advice..
.
get ripped off once he could forgiveget ripped off twice… your a fool and serves you right
get ripped off 3 times don't bother coming home.
thanks.
and did NOT neg you.
That's cool, people can neg me all they want. I dont really care as I know Im speaking with good intentions.
exactly:
Tread carefully. I've done my research, followed "stock experts" advice and bought IDC shares. Guess where IDC is now. As they say, past performance is not an indication of the future returns. Share trading is definitely not for everyone, especially OCDs and people with heart problems.
My advice, invest the money that you can afford to lose. Share trading is like gambling, be informed and know when to walk away.
Ann
Flt
Ccv