Question: I just joined as a new subscriber. Is it too late to buy the shares in your 2 model portfolios, given that they are at their halfway mark of the year? Or should I wait till next January for the new portfolios?
Answer (by Paul Rickard): No, the portfolios are active and it is not too late. We do, however, try to keep changes to a minimum – and major changes occur only at the start of the year.
Obviously, the market has moved since they were constructed – so you will need to consider the timing of your investment.
Importantly, they are models – and based on the assumptions set out. You should check to confirm whether those assumptions are appropriate.
Question: In relation to your article “Will Telstra Cut Its Dividend?” I am now retired, am a trustee in an SMSF, so I fall into the category of an Income Investor, particularly now as the Coalition shot us in the foot with its part-pension changes.
Telstra has fallen 20% to $4.22 today (from when we first purchased it) but we have stuck with it due to the high % dividend and franking credits. My concern with holding on to the stock is that there is a high risk of an even larger drop in price due to increased competition. Is there strong potential for TLS to drop significantly more?
Answer (by Paul Rickard): Thanks for the question.
We might see a bit more downward pressure on Telstra, but I don’t think it is going to be significant.
As I pointed out in the table, even with a dividend of 20c per share, the stock looks ok around the $4.00 mark (yield of 5%, fully franked).
My guess is that there will be a lot of support in this price region.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.