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Ok, here's the numbers on "do not hold a top 20 stock if it falls 20%". In this case, stop is placed at 20% drop from all time high. Let's look at the widely held WOW, a recent and topical example.
High 38.92
Stop 31.13
This stock subsequently fell to $29, so maybe the stop protected capital...let's see.
Stock was acquired in 2011-12 at $25. Stop has now triggered CGT on $6.13, say 47% for top bracket and applied 50% CGT discount this leaves capital per share of $29.70, and now on the sidelines.
Meanwhile, if you had done nothing, current share price $33 and another dividend to be paid in April. I'll pass on this method of "capital protection" for long term investing. The key is picking the stocks of course, for spec stocks yeah, I'd want a stop...but I don't buy specs.
Yep, all straight forward and pretty standard stuff.
I am not clear on why you are posting asx top 15s without analysis. Can you please clarify to point you wish to make? If it is about assumed loss of capital because a name isn't in the top 15 anymore, you will need to provide some commentary by stock. As mentioned, many are acquired, taken private, broken up etc. This does not neccesarily mean loss capital for stock holders, often quite the contrary.
Felt good today. Sharp rise accompanied by good volume.
Have added to my WOW holdings. Now hold approx 12000 WOW at average cost of 35.23. Pretty alarming to drop 5% in one day to close at 34.19.
Good day on WOW today China
a bit more of this and China's animal spirits will be restored and it will be time for another punt!
I think I will wait for an overall market decline before the next punt. This current punt has taken far too long and has been far too hair on end , white knuckle for me - was down 20% at one point.
Thanks PB and Erko. Overall portfolio - BHP and WOW - only about 5% down so within a few whiskers of break - even. Would you guys hold on for a profit?
Hopefully it has been educational mate.
I hold both and am not selling either. That's not advice though...you will need to come to your own view.
If I can make a suggestion, it would be to rethink your investment process going forward. Have a clear investment case for each holding - if you don't have one, just DCA into the index. I do both. A long term, income focussed view will help. I too took an on paper dusting on WOW BHP and SVW, but each of them are only 4-5% portfolio holdings. I had no intention of selling them. When these stocks were going south, MFG, ELD and my US holdings were soaring, and the rest of the portfolio was chugging along nicely. I took the opportunity to pick up a pile of VAS when the ASX hit the wall in October and then jumped on STO and WPL when Energy tanked, and CWN when it was getting caned at $12. My gross return Mar 14-Feb 15 is tracking around 17% including about 4% div FF (grossed up 5.7%). Now just waiting on more divs to roll in, and more capital to hit my account for the next opportunity....if nothing stands out, i'll just go to the old standbys, VAS/VTS until something does. I am just accumulating month by month, year by year.....always grabbing more and compounding
Well I get something out of those lists. They are the top shares by market cap at that time, which means they were at least reasonable companies back in the day. However, the fact that some no longer exist for whatever reason reinforces the idea that shares in reasonable companies are simple set and forget purchases. They will require ongoing monitoring and decision may need to be made at some point. How much monitoring is unknown. I know that's obvious for some people but some of us don't know too much about share investing at all.Geez, that's it ? Ok fair enough. I was hoping you would actually make your point with the lists provided, go stock by stock and provide present value of each of those holdings. Anyway, I don't want to be narky so will leave it at that
Today I purchased a small parcel of BHP @ $27.30.
My reasoning:
Most recent dividend was USD$0.62c. If we keep that base for 2015 (Interim and Final) and the AUD stays around the 80c mark, gives us a forward dividend of $1.55ish.
($1.55/$27.30) x 100 = 5.67% FF.
Investors havent enjoyed a dividend yield like this in 15yrs.
I could be right, I could be completely wrong - but for now, thats my uneducated insight.
pinkboy
Franked divis?
Next year we should have an ASF style annual stock picking comp, 5 only based on 31/12/15 close to 31/12/16 close for fun.
My gross return Mar 14-Feb 15 is tracking around 17% including about 4% div FF (grossed up 5.7%). Now just waiting on more divs to roll in, and more capital to hit my account for the next opportunity....if nothing stands out, i'll just go to the old standbys, VAS/VTS until something does. I am just accumulating month by month, year by year.....always grabbing more and compounding