Question 1: I’m trying to invest some money in the stock market for long term view. I understand the healthcare, technology and resource sectors are currently performing well. Can you recommend any shares in these industries that you would buy at current levels?.
Answer: Here is a link to our model growth portfolio https://switzersuperreport.com.au/advice/model-portfolios/
Healthcare: CSL, Ramsay (RHC), possibly Resmed
Technology : I am very, very wary about buying the Afterpays/WiseTechs at such elevated multiples. Link (LNK) is a somewhat boring, but older style technology stock.
Resources: again, they have run so hard partly because of supply disruptions (following the tragic accident in Brazil). I am not getting in at these levels. If you do want to venture in, stick to the tier 1 producers who have first class assets and sustainable low cost production. BHP then RIO, perhaps Woodside in the oil/gas area.
Question 2: My accountant told me to ensure I have contributed all my super up to my cap prior to May 1. This is due to potentially a Labor Government entering into power.
If Labor wins can they change/decrease the caps into super immediately?
I would think not, but would like a second opinion please.
Answer: I think your accountant is wrong on this point. Very, very unlikely that there will be any change to the super caps for FY18/19.
Question 3: I have worked in the printing and packaging industry for nearly 25 years. I’ve heard it said that printing and packaging predates a recession by about 3 months. Within the printing and packaging industry in Melbourne, a number of companies are saying that their phones have suddenly stopped ringing, orders have slowed and shifts are now being cut. In view of this anecdotal perspective, how does that affect one’s response to a national recession?
Answer: Thanks for the information about the state of the printing and packaging industry in Melbourne. The “anecdotal perspective” is not one I am familiar with. Julia Lee described in Monday’s Switzer Report her response to a possible recession – this is probably worth reviewing. See https://switzersuperreport.com.au/my-sector-asset-allocation-stock-tips-in-a-downturn/
Question 4: My husband and I are attending your Investment Strategy Day in Sydney 30 April. We have some questions as my husband is retiring hopefully and the end of FY 2019. We have two thirds of our share portfolio in bank shares and one third in other shares. In part due to fears about a downturn/recession, our broker has recommended that we sell all our NAB shares and trim our CBA shares, where we have the majority of our bank shares, and with these sales, purchase Lend Lease, Transurban (which we currently have), Sydney Airport, Spark Infrastructure and Magellan Infrastructure. My husband’s question is: should we sell some bank shares now or wait it out for a little while?
Answer: I can understand where your broker is coming from as you are considerably overweight. Bank shares are underperforming at the moment (on a relative basis) as the market follows the momentum of material stocks (based on higher iron ore prices) and technology stocks. I am not sure that this is going to change in the short term, but I don’t see any urgency to exit bank shares. The stocks he has suggested are quite defensive and arguably, pretty fully priced. I am, for example, a huge fan of Transurban but around $13.30, it is starting to look quite expensive. I think you should be looking to reduce exposure, but time is on your side. Three of the major banks report in May and declare dividends – “seasonally”, this is usually a positive for bank shares.
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