Thanks for sharing your view mate.
I can't find 13 N.Z. stocks in different industries trading on realistic PE's with a solid outlook.
And that's a great point. It is a low beta stock with very low volatility so tight stops can be set and the lower volatility is supportive of a higher than usual allocation.
That's the $64,000 question that's also got me stumped. Unless you take on more risk like a stock such as AIR I can't see anything better.Quote:
SCOTTY;503077]I am definitely overweight with HNZ at around 40% of my portfolio. Frankly I just can not see any other stocks which are showing a gross 10% yield with good growth potential in a relatively stable investment sector that temp me to look elsewhere at present.
I would be most interested to hear of better alternatives to HNZ as other high yielding stocks such as the power companies and some retailers in particular tend to have either limited/riskier growth potential or in the case of PGW fluctuating seasonal earnings?
Please tell me. What are the better long term buys than HNZ at present?
Good to see you've taken on board the lessons from the school of hard knocks, (arguably the best school).
As most all of us know, portfolio theory has it that a well diversified portfolio of stocks, bonds, property and other assets classes gives the optimum return with the least risk...the trouble I have with this is a couple of factors.
1. Its very hard to get a broadly diversified portfolio of quality companies across a range of sectors in N.Z. without buying some stocks which are at present on really stupidly high PE ratio's and bond yields are artificially low all around the world as a result of quantitative easing.
2. What we saw with the GFC was that portfolio theory might be fine in theory but it simply didn't work all that well in practice with virtually all asset classes getting a proper belting.
I think there are however a couple of fundamentally good reason to have some sort of set limit on exposure to any one stock.
1. You might believe that you are absolutely right but what if you're wrong ? and haven't seen something that comes back to bite you, (loss mitigation and risk management strategies suggest some reasonable limit is appropriate)
2. I think portfolio theory works to some extent.
I'll stick with 20% max for any one moderate risk well managed company, less where there's specific identifiable risk's involved. Bond's look like a losing strategy to me at the current prevailing yields.
My silver holding is in the toilet and I won't add to that.