Now that the investment books for the 2007-08 financial year are closed it is worth having a look at some of the forecasts and predictions made at the beginning of the financial year to see how they turned out. The Sunday Mail ran a piece over the weekend - "Redemption time - Stock experts shrug off a painful year of investing".
The article looked at the 5 stock picks made by four experts at the beginning of the 2007-08 year:
|
Tony Dennis |
Tim Lincoln |
Joel Palmer |
Joseph Kingsley |
|
Director, equities
ABN Amro Morgans |
MD, Lincoln Intelligent Sharemarket Solutions |
Principal Palmer Portfolios |
Client adviser
Wilson HTM |
|
Code |
Change |
Code |
Change |
Code |
Change |
Code |
Change |
|
BHP |
+24.8% |
BHP |
+24.8% |
MND |
-8.2% |
MQG |
-42.6% |
|
TOL |
-58.2% |
MND |
-8.2% |
WTP |
-66.6% |
BHP |
+24.8% |
|
ORG |
+64.3% |
CSL |
-59.1% |
SUL |
-44.7% |
SDM |
-17.3% |
|
DOW |
-6.3% |
TOX |
-35.7% |
MLI |
-60.9% |
NWS |
-39.2% |
|
MQG |
-42.6% |
MRM |
-18.4% |
MCR |
-28.4% |
PXS |
-54.1% |
|
Average |
-3.6% |
-19.32% |
-41.76% |
-25.68% |
|
Out-performance |
12.94% |
-2.78% |
-25.22% |
-9.14% |
To put these results in context, the ASX200 Index returned -16.54% over the year. The average performance across the 4 experts was -22.59% or 6.05% below the ASX200. Well done to Tony Dennis for beating the market but based on pure chance you would expect two of the four to have out-performed and two to have underperformed so basically the group as a whole did worse than pure chance.
An index fund would have to have had fees and costs of 6.05% to have matched the performance. (Vanguard's Australian Share Index Fund has a fee of 0.75% on the first $50,000 or 0.34% for wholesale investors)
I know where I would have preferred to have my hard earned money invested.
Regards,
Scott Keefer
