Question: What domestic fixed income ETFs would you recommend and is now the right time to be looking at bond type investments?
Answer (by Paul Rickard): I can’t get excited about investing in long-term bonds at the moment and am very reluctant to suggest a fixed income ETF.
If you want to lock your money away, have a look at some of the bank term deposit rates. To quote two examples – Westpac and ING Direct are offering 3.0% for 12 months, the Commonwealth Bank is paying 3.2% for 3 years.
Charlie Aitken’s article the other day (see here [1]) presented a pretty gloomy outlook for bonds, and while I don’t see this happening that quickly, I can’t see the risk/reward trade of investing in long term fixed interest.
Question: I own 726 shares in Primary Health Care (PRY). I was thinking of selling these shares and buying Sonic Healthcare (SHL) shares. What do you think of this proposal?
Answer (by Paul Rickard): I am pretty indifferent to the idea – probably prefer Sonic Healthcare as a better long term proposition – couldn’t rule out a takeover offer for Primary in the short term.
As for the brokers, they see both stocks as fully valued and are neutral. According to FNArena:
Primary (PRY): Sentiment is +0.1 (scale is -1.0 as most negative, to +1.0 as most positive); consensus target price is $3.96 (very marginally higher than current price);
Sonic (SHL): Sentiment is -0.1; consensus target price is $21.86 (again, just a few cents above the current price)
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