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Holding a reasonable amount of cash at the moment having exited the market about a month ago. Sitting on the sidelines watching the carnage happen in the market.
Have an SMSF which is in retirement phase, so protecting capital is important as is trying to maintain some distribution. Still holding some major bank hybrids which I am happy to hold and still holding some NAB share which have just recently gone under what I paid for them a few years back.
Seems that most of the experts are still forecasting volatility in the market for some time to come, just wondering what to look for to decide getting back into the market with the view of picking up reasonable yielding bank stocks?
They seem to have been oversold, yet with the fear in the market there may well be more selling off. When would be a good time to get back in the market?
Is it better to keep the gun powder dry for the moment?
A: As I am sure you are aware (and felt the pain), financial stocks (including bank hybrids) have been doing it tough. In Australia, we are basically following the lead from Europe (and to a lesser extent, the USA).
In Europe, they are concerned about the potential exposure banks may have to oil and energy companies, negative interest rates impacting bank margins (and profits), more problems in Greece and other weaker European states, and low rates of economic growth. Financial stocks have been punished.
When this lead is bracketed with a perception that Australian bank shares are “overpriced” on a global basis due to their high price to book value, our bank stocks follow suit.
Is it overdone? Yes.
Have we seen the end of it in Europe – not sure.
I think there is value in bank stocks at the moment. I liked the CBA result, and think Macquarie below $60 was good value. I don’t, however, see them as a screaming buys – yet. Hope this helps.
Regards,
Paul Rickard
