Q: Paul, we took your advice and sold Woolworths. What is the next buy for the income/growth portfolio? Are bank prices too high and mining stocks and mining related stocks in for a downgrade?
A: We have had a pretty good sell off with the financials – CBA this morning is off 9% from its high, ANZ and NAB 14%, and Westpac 17%. Included in the ANZ, NAB and Westpac price falls is the impact of going ex-dividend.
I agree with Peter and see some value in the materials sector, mainly BHP. That said, they are not the ideal stock for an income portfolio and I would be careful to ensure that I don’t get overweight in the materials sector.
On a trade/replacement basis, I think financials offer marginally more value and prefer them to consumer staples.
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Also in the Switzer Super Report
- James Dunn: A happy arrival – Virtus Health IPO
- Anna Kassianos: Fundie’s favourite – Oil Seach
- Ron Bewley: The energy sector – ORG, STO and WPL outperform
- Barrie Dunstan:Â Keep calm and carry on
- Penny Pryor: Don’t get caught – fraud and SMSFs
