In his next article for the Switzer Super Report, Woodhall Investment Research director Ron Bewley is going to start to tell us how to build a yield portfolio.
After just hitting 65, Ron, like many semi-retirees, is after a portfolio that also offers a bit of growth.
In a sneak preview from Switzer TV last week he outlined his selection process and some of the companies he has already bought.
“I do a clever little combination of yield forecasts and consensus recommendations,” he says.
He doesn’t own the big banks because he doesn’t believe they have the growth potential, however he has just bought Telstra.
“There is only one discretionary which is Tatts which went up lovely today…thankfully I bought it yesterday,” he said last week.
Tatts Group went up on the back of a compensation win, which Greg Fraser from Kimber Capital writes about in his article today
Ron’s portfolio has a target yield of between 7 and 8%, with franking credits, and he is also hoping for 6 to 7% capital growth.
Read more about the stocks in his portfolio in SSR on Thursday.
The resources view
Another Fundie’s Favourite regular, Ben Griffiths of small cap manager Eley Griffiths Group, has a somewhat contrarian view on resources. He says that the commodity cycle is a long way from bust and that we could be at the beginning of the recovery.
“It’s now becoming rather dangerous as professional manager of money to bet against the resources in favour of the industrials. It’s now time to moderate that pretty aggressive stance that we had,” he said on Switzer TV.
Companies he likes, which are outside the ASX 100 as he is a small cap manager, include PanAust, Independence Group and Sundance Resources.
“The big tilt that we’ve been invoking has really been that pro-resources stance,” Griffith says.
They sold down some of their retail stock holdings – such as Kathmandu, The Reject Shop and Super Retail Group – to free up cash for resources companies.
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.
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Also in the Switzer Super Report:
- Peter Switzer: Uncomfortable market optimism
- Paul Rickard: Why your LIC could be a cashbox in disguise
- James Dunn: The best discounted DRPs
- Rudi Filapek-Vandyck: Buy, Sell, Hold – what the brokers say
- Gary Stone: NYSE Composite Index breaks out
- Greg Fraser: Tatts Group comes out winner
- Staff Reporter: Property powers on
