Bell Potter's Charlie Aitken has gone out on a limb, with The Sydney Morning Herald reporting he has forecast…
— An Australian dollar at US68 cents.
— Interest rates below 2%.
— A stock market at 6,000.
Aitken has a good track record making big bold calls, so when he makes forecasts like this, it pays to stand up and take notice.
That said, directionally at least, none of the above should surprise regular readers of our Motley Fool Take Stock email.
I've long been suggesting the Aussie dollar can only fall, that interest rates can only go down, and that by comparison, the stock market is the only game in town.
The only exception might be property. Fuelled by low interest rates, Aitken has forecast a 10% rise in residential property prices in 2015.
It's a property bubble that keeps Glenn Stevens and his merry band of the Reserve Bankers awake at night. The broader economy needs still lower interest rates — witness the unemployment rate jumping today to 6.4% — but needs higher property prices like a hole in the head.
In response to the higher unemployment rate, The Sydney Morning Herald is today quoting ANZ economist Riki Polygenis as saying he expects a further interest rate cut as soon as next month. Hold on to your term deposits…
My advice? Stick to the share market.
There's nothing Aussie punters like more than property, and buying the latest hot asset. It's an irresistible cocktail, but one that's almost guaranteed to end in tears for people paying top dollar in today's already over-heated property market.
And that's before you have to deal with rates, repairs, body corporates, unruly tenants, late payments, vacancy periods and real estate agents.
Seriously, life is too short.
It's no secret I'm an equities man. We all are here at The Motley Fool. It's our passion. It's our ticket to wealth.
Best of all, when you buy shares in a company, thousands of people are working for you, generating profits, which are ultimately returned to you in the form of dividends and rising share prices.
Take Telstra Corporation Ltd (ASX: TLS), for example. The "dividend darling" of the SMSF Army today reported a sharp jump in profits and an increased fully franked interim dividend, up from 14.5 cents to 15 cents per share.
Over the past 12 months, Telstra shares have jumped 27%. In addition, shareholders have received 29.5 cents per share of fully franked dividends.
As a shareholder, it all comes at no cost to you. Next time one of those pesky Telstra salespeople calls you just as you're sitting down for dinner, know they are working for you, not against you.
It gets better. In the form of fully franked dividends, you get a nice break from the taxman. Plus, if you do need to sell your shares, you can do it instantly, at little expense. Try doing that with an investment property.
Add it all up, and share market investing beats property investing hands down. And the returns are better too. And you don't have to borrow huge chunks of money to play the share market game.
Plus, it's fun, especially when the market is going up, and especially more so when the shares you own are going up.
Speaking of which, today is a momentous day in the history of Motley Fool Share Advisor, the flagship subscription-only stock tipping service of The Motley Fool, headed by our own Scott Phillips.
You've probably seen Scott on Sky Business News, or on the ABC.
This afternoon, after the market close, Scott will release his brand new 3 ASX Best Buys Now stocks, exclusively to Motley Fool Share Advisor members. Click here to get the names of Scott's top stocks, hot off the presses, and grab a TWO year subscription for just $299. I'm biased, but I think it's the best deal going in the share market advisory business.
Scott's the fastest talker on television. Put your TV on slow motion and you'll catch every word, at normal speed.
The good news is you don't have to catch every single word to understand what Scott's saying. Like all of us here at The Motley Fool, when you boil it all down, we keep investing simple….
1) Buy good companies.
2) Pay fair prices.
3) Regularly add money to the share market, particularly to your best ideas.
4) Hold companies for the long-term.
5) Retire wealthy.
If you need evidence of how stunningly effective this simple strategy can be, consider this…
Today, almost simultaneously, not one but TWO of the share tips we made for Motley Fool Share Advisor subscribers tipped over to be 400% winners.
No wonder one poster to our popular and lively Motley Fool Share Advisor subscription-only discussion boards said just a few hours ago…
"Life is wonderful! Nice day to be a Fool."
Many investors go through a lifetime without ever quintupling (5 times) their money on just one position, let alone two, or more.
They sell out too early, going by the flawed theory of "never going broke taking a profit." They are only kidding themselves.
They sell out when markets get choppy, convincing themselves they'll buy back in when the market is lower. They never do
They chase highly speculative penny stocks — like oil minnow Central Petroleum Limited (ASX: CTP) and medical cannabis hopeful Phytotech Medical Ltd (ASX: PYL) — in the hope of getting rich quick. The odds are totally stacked against them. Head to the casino instead.
They do everything but Invest Foolishly. And in the process, shoot themselves in the foot, again, and again and again.
It's important to buy the right company at the right price. But the BIG money is made in the holding, the longer the better.
Albert Einstein called this deceptively simple concept the "greatest mathematical discovery of all time." We call it a path to financial independence.
Welcome to the miracle of compound returns. Or, money making money.
Out of respect to the paying members of Motley Fool Share Advisor, I can't reveal the names of the two 400% winners, especially as Scott Phillips still rates one of them as a buy today.
What I can tell you is both Scott and I have some serious money of our own on the line behind this company. We sleep well at night.
At the start of this year, I made it my financial new year's resolution to add more money to my winners.
Too often investors water their weeds — adding to their losers — when the way to generate serious share market wealth is by adding more money to their best ideas. I'm talking about adding to your winners.
Here at The Motley Fool, we eat our own cooking. We buy shares, with our own personal money, in a good number of the companies we recommend to subscribers of our newsletter services.
A case in point is one of our freshly minted Motley Fool Share Advisor 400% winners.
Both Scott Phillips and myself bought shares in the company with our own money — some time after we'd recommended the stock to our subscribers, in line with our strict internal ethical rules, it should be noted.
We also added to our position, not once, but twice, at increasingly higher share prices, in the process putting more firepower behind one of our top investment ideas, and one of our favourite companies.
The result today is very significant personal holdings, ones we both think can keep growing long into the future.
Heck, Scott was so confident about the future prospects of this big winner that he had the guts to recommend Motley Fool Share Advisor subscribers buy the stock even though, at the time, it had already risen over 180% from the share price he'd initially tipped the shares.
Add to your winners. Water your flowers…
Just yesterday I told you about how I was tempted to add to my personal holding in K2 Asset Management Holdings Ltd (ASX: KAM). Seems I'm not the only one interested, K2 shares jumping another 5% today. C'est la vie.
On the bright side, at the rate things are going for the K2 share price, I'll soon be back in positive territory, enabling me to fulfil my new year's investing resolution of adding to a winner.
Above I mentioned how Scott Phillips is releasing his brand new 3 ASX Best Buys Now Stocks, exclusively to Motley Fool Share Advisor subscribers, today at 4.30pm AEDST.
Looking back at last month's list of companies, at the time, I already held two, and subsequently I took out a new position in the third, Flight Centre Travel Group Ltd (ASX: FLT).
In double-quick time, Flight Centre shares are up more than 10%. Plus, they trade on a fully franked dividend yield of around 4%. No wonder Scott's 3 ASX Best Buys Now feature is Motley Fool Share Advisor's most eagerly awaited feature.
Like you, I can't wait.
