When it comes to investing, a key component is honesty. Certainly, it is all too easy to get carried away with a company which has a product that you love, or dismiss another stock which offers a service that you had a bad experience with.
And, while all of us are human and are inherently biased, it is crucial to leave such preconceived feelings to one side before you decide how to invest your hard-earned cash. Otherwise, you may be leaving your financial future up to one piece of bad customer service, or a rare defective product; neither of which truly paints the full picture of a company's investment potential.
Indeed, emotions may be an important part of life, but it doesn't make much sense to rely on them for your financial future. With that in mind, here are three stocks that, emotions aside, seem to be logical places to invest capital right now.
Commonwealth Bank of Australia
While there are understandable concerns regarding an increase in bad loans that could take hold if the Aussie economy deteriorates further, the likes of Commonwealth Bank of Australia (ASX: CBA) look set to benefit from a falling interest rate. As such, it is likely that demand for new loans will remain buoyant and that, while relatively highly valued at present, further rises in the property market will have a beneficial impact on CBA, since it has a significant exposure to domestic housing.
Furthermore, CBA offers a low volatility shareholder experience, with its beta of just 0.78 indicating that its share price should change by just 0.78% for every 1% move in the wider index. And, with a yield of 5.1% (fully franked), investor sentiment could pick up over the medium term – especially if interest rates sink lower.
Oil Search Limited
A falling interest rate has caused many investors to seek out a wider range of dividend-paying stocks and one company that could provide sound income appeal is Oil Search Limited (ASX: OSH). Although it yields just 2.2% at the present time, earnings growth of 14% per annum over the next couple of years means that it is set to have scope to raise dividends at a brisk pace. And, with them having risen by 6.7% per annum during the last ten years, Oil Search has a good track record of generous shareholder payouts.
Furthermore, Oil Search continues to trade on a price to earnings growth (PEG) ratio of just 1.52, which indicates that its shares offer growth at a reasonable price.
Super Retail Group Ltd
Of course, the major impact of a lower interest rate is likely to be on consumer spending, with credit being cheaper and easier to access. As such, auto, leisure and sports retailer, Super Retail Group Ltd (ASX: SUL), seems to offer superb capital growth potential as a result of it having a price to sales (P/S) ratio of just 0.94, which is lower than the ASX's P/S ratio of 1.58.
In addition, Super Retail's share price is up by 16% in the last year, which shows that investor sentiment is on the up. And, with a beta of 1.24, its share price should outperform a rising ASX that looks set to be stimulated by a loose monetary policy.
