August 2016 Review & Comments
Written by Tony Gray   
Tuesday, 27 September 2016 10:03

Portfolio Report – September 2016


Reporting season delivered a handful of positive and negative surprises, but overall continuous disclosure meant the number of true shocks was relatively low. More current financial information is allowing us to firm up opinions on value for individual assets.

There are a few existing assets we will now aim to work out of portfolios and equally a number of worthwhile assets to consider purchasing. This is critical when actively managing portfolios and culling under-performers results in better portfolio quality and returns – even if taking a loss or reduced profit when selling is uncomfortable.

We note the very large share price premiums for the top growth stocks. It’s normal for well-regarded growth stocks to trade at a premium to the broader market – but the degree of that premium is now extreme and we suspect will result in some major losses – paying top dollar for ‘quality’ stocks will not protect value when the next correction strikes.

We have been cautious on listed property for some time (too early in hindsight), but after 6 years of positive returns, the price behavior in recent weeks does look to be signaling a reversal of trend – which would make sense as it seems to be a matter of when and not if the US lift interest rates. The GFC taught us that holding onto some assets simply for diversification was the wrong strategy.

We note with interest that some international managers with strong track records of handling negative markets are now running large short positions on the US sharemarket.

In summary, we are prepared to exit some excessively priced growth stocks, sell assets where results disappointed and further lighten listed property exposure. Individual purchases need a discussion as to what suits your position and portfolio.

Best wishes,


A.W. (Tony) Gray BCom, LLB, Dip FP, GDipAppFin, CFP, FFin

Principal, TG Financial


Please treat the above comments as General Advice or general information, with no action to occur until we have considered with reference to your financial position, needs and goals.

Last Updated on Tuesday, 27 September 2016 10:10
 

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