2015 is pretty well done and dusted now.
We’ve got a few more trading sessions, but don’t expect too much action on the markets.
By now, there’s a good chance you’ve broken away from work for the year as well.
Many businesses around the country have slammed their doors shut with executives taking time off – hopefully after a busy year of making you, their shareholders, some cold hard cash.
Some are probably planning on spending more time with their kids and family.
Others might be prepping their private yachts for a New Year’s Eve voyage – or whatever it is that rich people get up to when the clock strikes midnight.
Whatever the case, Christmas is a great time to catch up with the family and cherish the time spent with those nearest and dearest to you.
The lack of news on the corporate front makes that easier to do, and I hope you plan to take advantage somewhat.
In saying that, the break could also be a good time to review your holdings, and their performances over the last 12 months.
Now, I’ll note that here at The Motley Fool, we’re all about the long-term.
One 12-month period is generally not enough time to judge whether an investment was or will become a success or not, but sometimes there are questions that need to be asked.
Take Slater & Gordon Limited (ASX: SGH), as an example.
This time last year, the legal eagle was flying high and would eventually go on to record its all-time peak at roughly $8 a share.
Now, the law firm’s share price is languishing around 88% lower at just 98 cents as at yesterday’s close.
A controversial acquisition and two separate investigations into your accounting practices will do that to you, not to mention the most recent proposed changes of personal injury laws in the UK that could seriously dent your future prospects.
Throw in a potential earnings downgrade for the current financial year and investors have a tough choice on their hands…
Investors will likely also take another look at BHP Billiton Limited (ASX: BHP).
Oh how the mighty hath fallen…
The ‘Big Australian’ probably looked like a solid buying opportunity to many as the year got started.
Alas, the shares have fallen to just $16.83 yesterday. They recently hit a 10-year low and their ‘progressive dividend’ policy is in jeopardy.
Is it worth holding on? Or will commodity prices continue to crash, dragging BHP’s share price deeper into despair?
I’ll leave that up to you to decide…
But while some companies have produced catastrophic results, others have generated outstanding returns.
Look no further than Bellamy’s Australia Ltd (ASX: BAL), which has benefited from the soaring global demand for infant formula.
In fact, the trio have risen a remarkable 767%, 497% and 173% this year, respectively!
Source: Google Finance
Then there’s Adacel Technologies Limited (ASX: ADA), the small-cap dynamo whose shares have surged 700% since the beginning of the calendar year.
As Philip Baker from The Australian Financial Review recently noted, “For sure in any year there will be hot stocks that get all the attention.”
This year it was those companies mentioned above. Maybe it’ll be the same in 2016, or maybe it’ll be a new breed of shares…
Whether you find the time (or the will) to do much research or reading this Christmas break, these are some of the questions you should be asking yourself…
- Am I still confident in the company whose shares I own?
- Have the shares run too far or too hard?
- Am I happy with the amount of Company X’s shares that I own, or its size within my portfolio?
- Has my investment thesis changed?
If you’re heavily exposed to one sector or another, you might also look to diversify your holdings or consider new investments with strong growth potential.
Perhaps you could look at companies with exposure to the United States economy – will they benefit from a weak Australian dollar and thus, further interest rate hikes in the US?
Or how about companies that are focused on a ‘greener’ future, set to benefit from the outcomes from the COP21 climate talks in Paris?
Then maybe you’ll look at small technology start-ups, some of which could even change the world as we know it with the help of Malcolm Turnbull’s innovation tax breaks, where $1.1 billion will be devoted to drive an ‘ideas boom’ over four years.
All in all, 2015 was a pretty disappointing year for local investors. The S&P/ASX 200 (ASX: XJO) is currently sitting 5.5% lower since the beginning and recently hit its lowest level in two-and-a-half-years.
But there are already signs of a turnaround brewing…
The ASX has risen for five sessions in a row, lifting 4.2% in that time.
Then there are the optimistic outlooks provided by some of the country’s best and brightest economists.
For instance, Shane Oliver, Chief Economist for AMP Capital recently said “Expect the ASX 200 to rise to around 5700 by end 2016″…
The Australian Financial Review noted that Credit Suisse is targeting 6,000 points by December next year…
And The Sydney Morning Herald cited Randal Jenneke, head of Australian equities at T. Rowe Price as saying “The Australian market also looks more attractively valued compared with global equities” (emphasis my own).
Their targets and optimism all suggest one thing: shares are cheap.
By all accounts, 2016 could be a bumper year for Aussie share market investors.
The ASX is still hovering well below its highs from earlier this year and, for many companies, that means their dividend yields are looking even more compelling today.
Especially with leading fund manager BlackRock recently predicting the RBA will cut interest rates even further in 2016…
And with analysts from ANZ Bank (ASX: ANZ) suggesting a cash rate of just 1.5% by August 2016!
In other words, there could be plenty of ways for you to make a healthy profit in the New Year.
In between playing Santa Claus for your children or kicking your feet up for a much needed rest, I hope you’ll also take some time to think about your share portfolio, and which ASX companies most deserve to be in it.
Wishing you a Happy Christmas break.
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*Returns as of February 15th 2021
Motley Fool employee Ryan Newman owns shares of Bellamy's Australia Limited. The Motley Fool Australia owns shares of Bellamy's Australia Limited.
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