3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. Turns out the days of easy profits may have disappeared and investors could risk getting caught owning the wrong shares at exactly the wrong time.

Truth is, even renowned companies could soon deliver capital losses to investors buying at these levels, and rock-bottom RBA interest rates leave few other options for income investors wanting to grow their wealth.

But which shares are some of the riskiest and where should investors be hunting for profits instead?

You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low."

Rio Tinto Limited (RIO)
The iron ore miner posted a strong rise in its share price in 2016 as iron ore prices recovered. Despite the miner's interests in numerous other commodities like aluminium, copper, coal, uranium, diamonds, titanium and even salt, iron ore generates more than three-quarters of the company's underlying earnings. Signs suggest the rally in the iron ore price is over, and that could see Rio's shares underperform the market over the next few years.

ANZ Banking Group (ANZ)
If recent history is any indication, shareholders of Australia's fourth largest bank may continue seeing red. ANZ shares have plunged 20% since 2015 highs as former CEO Mike Smith's "Super Regional" strategy to generate 30% of revenue outside of Australia and New Zealand started falling apart. It could take the bank several years to extricate itself from those unprofitable Asian businesses. Combined with its recent dividend cut, it's hard to imagine ANZ shares delivering serious shareholder returns in coming years.

AMP Limited (AMP)
Investors have clearly soured on AMP Limited shares, after the $16 billion wealth management behemoth recently spooked the market when delivering poor results. The group's insurance division arguably recorded the worst result of all after extending a long-history of losses and underperformance. While a partly franked dividend yield of 5.9% appears attractive, AMP has a history of inconsistent dividend growth and investors stand to rack up more profits investing in companies with better prospects.

1 gangbuster fully-franked dividend share to buy now

By comparison to these 3 behemoths of yesteryear, one under-the-radar share pick could soon deliver a boatload of profits for investors. Not only are the shares dirt cheap, but they are trading on a juicy fully-franked dividend yield of 4.2%. Since it started paying dividends in 2007, it has managed to increase the payment to shareholders every year.

Just click here to get your hands on The Motley Fool's 100% FREE investing report for the top dividend share to buy today. If you're a little behind on your retirement goals, I think this is a company you'll want to discover now.

That's why I hope you take a few minutes to uncover the name of this dirt cheap fully-franked dividend paying share. Click here to get all of the jargon-free details.

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Returns as of 11/29/16

This report contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Please refer to our Financial Services Guide (FSG) for more information. The Motley Fool has a clear and concise disclosure policy. Staff may own shares in the companies listed above, and those positions may change at any time.

All returns cited are hypothetical and based on the percentage change between the stock price at the time of recommendation and the current or sell price (if the position has been closed) at the time of publication. Brokerage, taxes and any other associated costs are not taken into account. Please remember that investments can go up and down. Past performance is not necessarily indicative of future returns. Performance figures are not intended to be a forecast and The Motley Fool does not guarantee the performance of, or returns on any investment. Any money back guarantee is strictly limited to the subscription price paid for the product. Any and all advice contained in the above content is general advice that has not taken into account your personal circumstances. Please refer to our Financial Services Guide for more information or email us at [email protected] to request a copy.

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