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Focus on yield in the new world order

The new Chinese premier Li Keqiang has tempered that nation’s prospects for growth and our hopes for an ongoing mining boom.

How much is enough?

“Seven per cent will be enough to achieve an affluent society by 2020,” the Financial Review reported him as telling a State Council working conference.

He may well be right but the lower growth rates continue to raise concerns in the local economy and the outlook for the Australian sharemarket is not so optimistic.

“The expectations of investors should remain tempered,” John Abernethy, chief investment officer at Clime Asset Management, told shareholders at the group’s annual general meeting on Friday.

“The [outlook] is not looking fabulous, it’s just looking OK.”

But there is some light at the end of the tunnel for investors, he says. “I think we’re in the process where the money that ran out of the market is now coming back.”

What you should do

If the massive capital gains of a few years ago are now a thing of the past, then you should be concentrating on finding investments that have sustainable yield.

Investing for yield should always be a factor when considering adding shares and other investments to your portfolio but this message got lost in the hubris that eventually caused the GFC.

As cash rates fall, shares that offer reasonable (and sustainable) dividends should be a must. Read our blogs on unsustainable dividends and be cautious when something looks too good to be true.

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Price % Chg
SDF STEADFAST $ 1.590 + 14.80%
PBG PACBRANDS $ 0.525 - 9.48%
BDR BEADELL $ 0.500 + 7.53%
VED VEDA GROUP $ 2.200 + 6.28%
CVO COVERMORE $ 2.230 + 5.19%
MSB MESOBLAST $ 4.740 + 4.87%
RSG RESOLUTE $ 0.580 + 4.50%
BLD BORAL LTD $ 5.630 + 4.45%
AWE AWE LTD $ 1.790 + 4.37%
WOR WORLEYPARS $ 17.880 + 4.07%

Commodities

Price Change % Chg
BRENT SPOT (USD/BBL) 100.390 0.000 0.00%
LIGHT CRUDE OCT4 (USD/BBL) 93.840 - 0.020 - 0.02%
NAT GAS SEP14 (USD/MMBTU) 3.974 + 0.046 + 1.18%
Bid Ask Bid Chg Bid % Chg
GOLD (USD/OZ) 1281.85 1282.65 + 1.21 + 0.09%
SILVER (USD/OZ) 19.40 19.47 + 0.06 + 0.31%
PLATINUM (USD/OZ) 1413.25 1423.25 + 2.65 + 0.19%
PALLADIUM (USD/OZ) 889.40 895.40 + 8.20 + 0.93%

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Currencies

AUD USD EUR JPY GBP
AUD AUD 0.9335 0.7074 97.01 0.5631
USD 1.071 USD 0.7578 103.89 0.6031
EUR 1.413 1.3192 EUR 137.10 0.7957
JPY 0.0103 0.0096 0.0073 JPY 0.0058
GBP 1.7754 1.6577 1.2562 172.27 GBP

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