Replies to post #29464 on A.I.M. Users Bulletin Board (AIMUSERS)

[AIMster]

Re: Bank ETF's/Funds

I've got a position going in BTO, the John Hancock Bank and Thrift Opportunity Fund, currently with a modest 2.9% dividend but trading at a -20.43% discount to NAV. Expense ratio is 1.34%, about the high end of what I'll use, but better than some.

Their chart has mirrored the market:



So buying now decreases average cost. Looking at a 5 year chart shows a rather steady decline after being somewhat range bound.



So unless we go for broke, if you don't have to average down an existing position as I'm doing, starting one now would seemingly offer room to the upside with somewhat less to the down. Pure index funds might offer a play with less fees, being more cost effective, but I suppose the larger question being framed is "is the financial sector oversold?" To which I don't have a truly good answer. If you've got some sidelines capital waiting to get back in, a modest entry might be made now. Just don't bet the farm.

Best,

AIMster

[The Grabber]

Well as long as we're all sitting in the confessional...

I admit to adding 21% today to my position in Citibank.

I'm still playing the 'too big to fail' card in spite of today's dilution of my previous holding in C.

PS: I'm not feeling very 'stimulated' yet.

Any of you?

[karw]

Admission

I have to admit that i started a machine in PGF and VFH.

At the same time I am not buying in certain bank machines, all based in the euro. I think/hope that the US$ will rise vs the Euro, based on my excel charts, so i am rotating some into the US$ area.

Kind Regards, K

[ls7550]

Hi glennpj

I did what Toofuzzy is always advocating against and changed things at the worse possible time.

Attracted by high income I bought far too heavily into banks when they intially appeared relatively cheap (worse possible time).

If I hadn't, in total I'd be down only around 5% across the year. As it is I'm around 30% down at the present time, of which 25% of that is attributable to bank holdings.

I'd mainly bought into Lloyds TSB - which was conservatively/well managed, good yield, low exposure to bad debts etc and which alone has just reported a 0.9B profit across the year. But in their 'choice' to buy HBOS - which has just reported a 10B bad loans based loss has ...!!!!!

So whilst previously overweight banks, the price declines (-85%) have brought current weightings back in line with where I should have kept things back at the start.

If only I'd taken TF's advice more to heart!!!

Lesson learnt - put 90% of effort into downside loss protection (10% into price appreciation potential).

Best. Clive.