Investment strategy for 2013, what’s going on in Investment Management?

Investment Strategy 2013The investment strategy for 2013 – what’s going on in Investment Management? Quite simply after a couple of years sitting in cash, fixed interest, and bonds. The appetite for the share market is returning.  Based on a recent Investment Management survey conducted by HSBC, 75% of global managers surveyed were holding an overweight view toward equities.  Part of this may be attributable to more positive sentiment toward the global economy.



Interesting statistic, but here’s the thing – what are you going to do?

After a period of time where uncertainty and nervousness have effectively corralled investors into saving, at the expense of both property and shares. Is it time for you to get back in?

The answer, in my opinion, is a resounding yes.  That said, with care and caution as to what stocks to hold as always.

Looking locally at the Australian market, for example, the push up in iron ore prices from $90 USD to $145 USD, saw BHP drift down to around $30.70 – currently sitting at $37.16 (24th Jan close).  That, by the way, is a move equivalent to around 7 years’ interest with the current RBA rate of 3%!

So where else is the opportunity?? Well, the banks – ANZ in particular – are approaching their dividend season. So perhaps some exposure to this. And the associated fully franked dividends may be part of your 2013 Investment Strategy.  And then, of course, we can layer on top of this, value adds by selling calls. Generating options premium.

For those that are a little lighter on funds, perhaps a calendar spread may be a way of getting a “V8” exposure to the market – less cash, some additional risk. and certainly a meatier return.  Let’s take a look at this now…..

Actual Traded figures on BHP Calendar Spread*

Date Note Value Breakeven
30/10/2012 Buy 5 BHP Jun 26.00 Calls @ $8.29 $4,145 $8.29
30/10/2012 Sell 5 BHP Nov 34.00 Calls @ $0.49 $245 $7.80
28/11/2012 Buy Back Nov 34.00 Calls and Sell Jan 34.00 Calls for $0.79 Credit $395 $7.01
17/01/2012 Close Trade for $8.06 $4030


Only $4,145 required to control 500 “units” of BHP

After selling two calls and closing trade, the gross income of $1.05 per share or $525 (12.66% on cash outlay)

*All figures are traded prices before transaction costs

My outlook for 2103 is for solid, above average returns for investors who adopt a stock and options strategy – my goal is to help as many of you as possible make that a reality.

Want to learn more about this strategy and those of other options? CLICK HERE


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