Money
Issue No. 39 - February/March 2008
Ten Best Investment Ideas for 2008
by Pamela Brombal
1.Take some profit from Australian shares (stock watch: overheated miners and mining support companies)
“We have a split market with some stocks seeming to be expensive but with good value exhibited elsewhere,” says Prescott Adviser David Middleton. “It’s time to reconsider your exposure to different sectors, to take profits from low yielding stocks on high earnings multiples and cut back overall exposure with an emphasis on retaining value.
“We’re not advocating a complete retreat, we suspect it is far too early for that, but a measured process of taking some of the gains off the table and putting them aside is a sensible thing to do.”
2.Buy bad news (stock watch: AFG, BBG)
“The market is especially sensitive to profit downgrade announcements. Recently, a number of companies with significant international operations have announced profit growth downgrades due to the high value of the currency. Prices have been marked down substantially on what is likely to be a shorter-term problem.
“There is considerable price weaknesses in sectors we quite like from a longer term perspective and this provides the opportunity for entry at what will eventually be seen as very attractive prices.”
3.Invest where the money is likely to go (stock watch: funds with European exposure)
“For those investing internationally, it will be best to avoid index funds that track the world index and managers who maintain country allocations on the basis of market capitalisation. By definition these funds will have large exposure to US stocks and the US is likely to under-perform. Use managers seeking value investments with a large exposure to Europe.”
4.Commercial property rents to rise (stock watch: LLC, selected property trusts)
“If you are prepared to be selective there are still some listed property trusts trading on attractive yields of above 7% and these should perform well as r...
