Cost-conscious investors can tweak their overall returns by watching investing costs. Keeping brokerage commission fees to a minimum is one of the first things to do, but don't forget about tax time when it comes getting all the deductions you're entitled to.
For example, frequent trading will cost you some of your gains if you hold stocks for less than 12 months.
This can be avoided by buying good stocks at cheap prices so that there's no urgency to sell. Investing is for the long term, so plan your stock purchases for a similar time frame.
Here are three stocks that are cheap right now for patient investors.
Suncorp Group Ltd (ASX: SUN) offers good value to investors for three reasons- a huge 5.9% fully franked yield, attractive projected growth over the next two years and good prospects for near-term dividend growth. The general insurance company and Australia's fifth largest bank is making itself a leaner, more profitable company through its current simplification program to streamline the array of different insurance products if offers. At the same time Suncorp is upgrading its computer systems to take advantage of easier, more efficient cloud computing applications.
Air N.Z. FPO NZ (ASX: AIZ), otherwise known as Air New Zealand, has shown steady growth in passenger numbers and revenue per passenger kilometres during December, especially in its domestic flights. The airline is benefiting from the lower fuel prices thanks to the fall in crude oil prices. If oil stays this low or goes even lower, the cost savings would be a strong tailwind for earnings. The stock is trading at about 9 times earnings, in the middle of the company's past PE range. Its healthy 4.3% dividend yield fully franked would be a better income earner than a bank term deposit. Altogether, that makes Air New Zealand a cheap stock to hold for the long term.
Finally, Perpetual Limited (ASX: PPT) performed very well in financial year 2014, bringing in over 30% more earnings than in the previous year. The investment fund manager clearly showed its high quality investing skill in domestic stocks. In 2015, Perpetual has new funds that will focus more on international equities since overseas markets like the US are expected to return more than the ASX. With forecast earnings growth of about 14% annually over the next two years and an attractive 4.2% dividend yield, the stock is cheap trading at around 18 times earnings.
