Dear %%first_name%%,
Well I’m putting my money on another good day on the markets today after the US had a burst of optimism overnight. Now I don’t believe the volatility is over for one second but I do believe that in the battle of good versus bad economic news, good is starting to win out.
China isn’t as terrible as some people say it is – its market surged 2.9% yesterday – and the US is growing at a reasonable clip too.
So how should SMSF and self-directed investors play all this? Well I reckon buying some battered blue chips at bargain basement prices is a pretty good place to start.
And of course past performance is no indication of future performance but here’s a little history lesson to remind you of the benefits of biting the bullet and “keeping your head when all around others are losing theirs”.
If you’d bought Commonwealth Bank at the worst of the GFC market crash in 2009 you could have picked it up for $27.12 – it’s now trading at just over $74! You could have also grabbed ANZ for $12.75 (now $27.53) and Westpac for $15.92 (now $30.50).
In his article this week, James Dunn highlights five great blue chips that are very good value at current prices. You have to subscribe to know all his picks but I will let you in on a little secret here – one of his picks is Lend Lease Corporation.
This company is on the long-road back to its former blue ribbon status and while it’s recent FY15 result wasn’t that crash hot, James says what was most interesting was the information that the company’s development pipeline rose 19% to record level of almost $45 billion.
The recent correction has shaved 15% off Lend Lease’s share price, but of the eight brokers on FN Arena, six have a buy or outperform rating and two have a hold rating on the company. They also believe it is trading at a 26% upside to its target price. This and the other four companies in James’ list are certainly worth consideration if you ask me!
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Sincerely,
Peter Switzer