Traditionally, when seeking income, investors have turned to fixed income investments such as term deposits or bonds. However, persistently low-interest rates have seen investing in higher yielding stocks become an increasingly popular strategy for investors seeking to generate an income stream. Show More
Two quick charts looking at the risk and return trade-off between ASX equities and ASX major bank hybrids. The first chart considers the current cash (unfranked) and fully franked dividend yield on the ASX200 index versus a range of major bank hybrid yields in both franked and unfranked terms. The... Show More
Are Australian bond-like proxies going to suffer a bondcano moment? Certainly, stocks that have defensive characteristics have been sold down in recent months. And bond bears would have it that they are collateral damage from rising US yields. However, we believe this is a false narrative. Hence, we need to... Show More
On average, companies in the top 10 per cent of expected dividend yield deliver negative earnings growth, negative dividend growth and underperform the market over time, our analysis suggests. To find the companies with genuinely sustainable dividends, you need to dig much deeper than these simple historical measures. Show More
While it makes sense for individual investors to look to institutions for cues and clues to inform how they invest – or at least how they think about the world they invest in – sometimes it really doesn’t. Show More
Guns N’ Roses released their first debut album titled “Appetite for Destruction” in July 1987. Three months later one of the most violent and unexpected equity market corrections in US history occurred. The Dow lost 22.6% of its value on Black Monday, and the causes behind the dramatic fall are... Show More
High yield bonds are tempting but come with greater chances something could go wrong. This wire gives some tips in getting the balance right between high yield and investment grade, and displays a sample portfolio for both strategies. Show More
There was a time when Telstra was a staple of almost every Australian investor’s portfolio. Stable earnings and a big fully-franked yield meant that it never had problems attracting buyers. Things are different now. After cutting its dividend in August, Telstra is now down >30% year to date. Show More
Want to know the biggest yield trap of 2017? Each year there are dividend plays that turn out to be yield traps. In 2012, it was QBE. During 2012 to 2014, we saw several consumer stocks turn out to be yield traps including Seven West Media, David Jones and Myer.... Show More
High dividends often steal the limelight, but as holders of Telstra have recently learned, a sustainable dividend is every bit as important. This week’s Buy Hold Sell features Vince Pezzullo from Perpetual and Matthew Haupt from Wilson Asset Management. Show More
After eight years of falling interest rates and quantitative easing, most investors are wondering how long before the next great fall and when it will happen, mostly so they can dump their shares and avoid the pain suffered during the GFC. Show More
With both government bonds and bank accounts still returning less than 3%, investors continue to turn to the stock market for yield. In this week’s Buy Hold Sell, Catherine Allfrey from Wavestone and Chad Slater from Morphic share their view on five big-cap stocks with big yields. Show More
Local market was aimless and flip flopped with US futures all day to finish mainly flat. Currency, Commodity and global sentiment remains weak. The historical trend suggests were likely to remain in this up and down trading days till the last week of July. The best performing sectors were IT,... Show More
Last week, Apple CEO Tim Cook told analysts that “India is moving fast. They are moving at a speed that I have not seen in any other country in the world.” Despite this and many other positive endorsements, investors often procrastinate and identify reasons not to invest in India’s growth.... Show More
Today’s rally notwithstanding, gold has had a relatively low profile start to 2017. This is in stark contract to a year ago, when a volatile stock market and the surprise implementation of NIRP in Japan led to range of optimistic forecasts and proclamations of “a new bull market in precious... Show More
The lists of the best performing and worst performing stocks in the ASX200 during 2016 told a dramatic narrative of a reversal of fortunes between growth stocks and resource stocks. One month into 2017, and we have evidence of this continuing. BHP and RIO are up 11.2% and 14.4% year-to-date... Show More
We’ve written that the ‘yield trade’ will struggle in 2017 and we still think that will be a case. However, sentiment will ebb and flow, and we need to be looking in places that might not have been on the radar in the last few years and are therefore still... Show More
The first half of FY2017 has certainly delivered some unexpected outcomes - Donald Trump's election as the 45th President of the United States and the following positive market reaction stunned the world. Amidst the resulting volatility in bond and equity markets lies a wealth of opportunity for those who care... Show More
Generational low interest rates are symptomatic of lower growth and inflation, made acute by central banks reacting to structural factors such as ageing populations, integration of savings rich economies into the world economy, offshoring and more recently deleveraging and excess export capacity. Increasingly, there is mounting evidence that distortions are... Show More
One theme we have explored in the past is the search for stocks that have a good combination of dividend yield and earnings growth, the so called GARY stocks (Growth And Reasonable Yield). We think that continues to be a sensible strategy and have screened the ASX 100 universe for... Show More
