WW ON THE MONEY
RIDING THE DIPS
investing during volatile times
Despite all the doom and gloom currently circulating, SUSAN RALLINGS and PATRICIA DOYLE outline how stocks and shares should still play a role in the investment mix of accumulating your wealth portfolio. The Australian share market dropped over 11 per cent last financial year. This has obviously been a tough 12 months. In order to overcome some of the difficulties investors have been experiencing since the Global Financial Crisis, we have the following tips:
Be proactive – a lot of investors for many years have had a ‘buy and hold’ approach. In this type of market where we have been going backwards this does not always work. Take opportunities when you can and remember you can always sell and buy back in at a later time.
greedy, and have an exit strategy. Ask yourself, would I be happy with a 20 per cent return? If the answer is yes, trim some profits off the top, as we do not know if it will continue to go up!
Buy quality companies – with strong fundamentals and a healthy balance sheet, the blue chip top 200 stocks have held up well during volatile times because these are companies which investors have relied on in the past and have a proven track record.
Be brave – cash is the number one investment
around at the moment that offer much better yields than current term deposit rates, don’t forget fully franked shares are also helpful at tax time.
choice at present, if you are very conservative and are happy to accept a lower return then stay with what works for you. However, if you really believe in an investment and it is only down due to poor sentiments in the market, don’t be rash and panic; remember you only generate a loss when you sell.
Take profits when possible – try not to be
Looking back over history, the Australian
Look for yield – there are a lot of investments
share market long-term trend is up, try not to be disheartened while the market is volatile. Global economies will eventually work through the issues and the market will turn, you just need to be patient but also proactive in your strategy. n Important Information: The information contained in this article is general information only. It does not take into consideration any specific needs, situations or objectives. Before making any financial decisions you should make sure you are comfortable that the strategy suits your needs and objectives, and your risk profile. If necessary, you should seek professional advice.
Susan Rallings and Patricia Doyle BUSINESS RBS Morgans PHONE +61 (7) 3334 4865 www.rbsmorgans.com CONTACT
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Contact Patricia Doyle from RBS Morgans on 07 3334 4966 patricia.doyle@rbsmorgans.com
Contact Susan Rallings from RBS Morgans on 07 3334 4865 susan.rallings@rbsmorgans.com
RBS Morgans Limited A.B.N. 49 010 669 726 AFSL 235410 AParticipant of ASX Group A Principal Member of the Financial Planning Association of Australia
18 WORKING WOMEN® n Spring 2012