It's been a very volatile start to May for Australian share market investors, with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) falling around 2.4%.
Even investors' favourite blue-chip stocks such as Telstra Corporation Ltd (ASX: TLS), Westpac Banking Corp (ASX: WBC) and Medibank Private Ltd (ASX: MPL) haven't been immune from the selloff.
They're already down 2.45%, 6.6% and 1.8%, respectively, in the past five trading days.
With so much uncertainty, no doubt many investors are asking themselves if now is, or isn't, the right time to sell out of these stocks.
Firstly, Telstra shares have been sold off in recent times although no company specific news has been released. Despite official interest rates falling to just 2% earlier this week and Telstra boasting one of the most reliable dividends on the ASX, investors have heavily discounted the stock.
Whilst its shares do not currently appear priced for buyers, there's a lot to like about Australia's leading telecommunications company. Indeed with the group targeting one third of group revenues from Asia by 2020 and Australians' use of internet-enabled devices growing rapidly, I'd be happy to hold Telstra shares throughout the market cycle.
Westpac, however, is a different story. Shares of Westpac have been discounted over 13% in the past month as investors' expectations of slowing credit growth, tougher bank capital requirements and intense competition took their toll.
Westpac's half year results released earlier this week proved those concerns to be valid and its stock price has continued to slide. Even after falling more than more 10% this month, however, Westpac shares continue to trade at an expensive valuation. Personally, I'd look to take some profits off the table.
Lastly, Medibank Private has underperformed the broader market by around 14% in 2015 despite delivering on much of the forecasts it set out in last year's initial public offering (IPO) prospectus. Whilst it may be Australia's leading private health insurer by market share, its valuation appears quite rich considering its growth prospects over the next three to five years.
Therefore, unless investors are looking to have their money tied up in Medibank for at least the next three years, I'd advise them to reduce their exposure and look for other, more compelling, opportunities on the market.
