I recently inherited a bit of money and am looking at investing in bank shares. I have heard all sorts of things - buy CBA because they're big, buy Suncorp because they're cheap.
Does anyone have any recommendations?
Thanks in advance.
Bank shares - which ones should I buy?
Ljoeyjoe on 12/09/2014 - 19:57
Comments
The fact that you're asking this on a forum says that you should probably look into the risk V gains a bit more. Chuck the money in a high interest savings account, ING Savings Maximiser, CBA Goalsaver, UBank Saver or equivalent in the mean time. Always do your research when investing with risk involved, consider how soon you'll use the money, the market goes up and down and you don't want to need the money when you're down 4% or 5% which on a $20,000 investment is $1,000. Also look at diversifying your investments to minimise risk.
And then get taxed almost half of what you make in interest depending on your situation. You can minimise risk by putting stop losses and things into place. Cash is always good to have some lying around in a bank. Shares are liquid but not as liquid if you need it asap.
If you read up on the companies and take your time you can do well to keep some safe stocks.
Keep in mind that banks are doing quite well and not sure how much more capital growth you can get..but having said that..dividends are what you want and these have tax benefits associated with the profits you make.Telstra is another option you should consider if your starting out. It's been very good and stable and always pays good dividends.
Depending on how much you have..yes, you should diversify.You should also have a strategy on when you want to get sell up or if something starts going down when you want to pull out.
Remember that even if it goes down you'll roughly get similar dividends with these banks.Personally, I'd look at ANZ and WBC if looking at banks..
Buy shares at Bank of Zollinger. Very good investment if i should say so myself
Lol, you couldn't even get the spelling right.
Well to be fair, autocorrect doesn't like Zolinger much
Buy? OzBargain turned into a hot stock tips forum now. Like the shoe shine kid and taxi driver giving Wall Streeters stock tips and asking what to buy. That's a sell signal for me. Thanks!
Seriously though, far better off just paying off any debts first. Invest in education. That has highest returns.
Teach yourself about business and economics etc.
If you going down the path of investing in Bank's, maybe have a look of what the Bank offers its shareholders as benefits, really handy if you are an existing customer or looking at new banking products.
Like for example, before GFC, Westpac had a large range of offers, this is the Westpac 2008 Shareholder Benefits. They offered a range of discounts, cash bonus and extra points on their credit cards just for holding 500 ordinary shares. Today, unfortunately Westpac don't offer as much, but I did receive a letter in the mail six months again offering me a bonus 0.10% interest on my eligible eSaver account, and my parents who have a loan with them received a rate reduction. So looks like its more a targeted offer at Shareholders who are currently customers.
A quick look over the other major 4 banks:
- CBA and it doesn't appear that they offer any benefits any more;
- NAB looks like they waive annual fees on Credit Cards and 'occasion benefits'; and
- ANZ have completely withdrawn any benefits.
Hope that helps a little with your decision. But I guess at the end, it depends on what you are wanting to achieve, regular dividend, or strong performance, or additional benefits.
Don't they have a minimum number of shares? I think it might have been 1000, which can be nearly 20 to 50% of most Australians 'portfolio'. It may have been $1000.
Buying shares just to get CC fees waived just isn't worth it. Wish it was though.
Personally I see the current reward vs risk for investing in the main banks as highly unappealing.
The improved earnings per share is largely attributed to their reduced provisions for bad debts… Where is the growth going to come from? Consider the housing market & their respective exposure to any downturn?
Considerably better low risk investments around IMO & would not classify banks in that category anyway..
You make some great points.
Invest in The Iron Bank, they have big plans next year.
Consider Exchange Traded Funds (ETF) if you're a new or small investor. You'll spread your risk and they can have very low fees. Something like VAS or ishares have a ASX200 etf too.
Food for thought.
Hope the OP didn't buy the banks… They have now lost over 10% of late.
Perhaps it is good time to buy now?
Don't kid yourself. People have been asking that question for decades.
Leiiv - Is the price only determining indictaor? If so, then I would politely suggest to do more research & refrain from buying.
Too many people buy stocks on merely a retrace & end up catching a falling knife. Happened to a friend of mine recently with regards to Atlas Iron.
You can't gauge the best time to buy into shares, if you are not a regular trader you just have to put your feet into the water and hope that there is nothing there that is going to sting you.
I was lucky enough to have money aside to invest into shares in 2009 when the markets had started to recover. Most of my shares have at least doubled in price to what I paid for them there, in particular Westpac has done well for me.Check what the dividend history is like with the banks if they pay one, see how they have performed over the last year and make your own choice from there.
Failing that if you want to lower your risk go to a bank and invest in their share products or a financial planner and see what they recommend (They will recommend the product they work for)
cba and anz
size is big
Risk is small
Decent returns