What to do with RCT shares?
I am the emerging market analyst at Port Philip Publishing, Ken Wangdong.
Recently, I uncovered a momentum strategy that is so powerful, you should completely forget about buying companies such as Commowealth Bank of Australia [ASX:CBA].
Don’t get me wrong, I used to run CBA in my own portfolio. But I kicked it off as a result of its persistent underperformance.
My ‘momentum strategy’ locates shares that have the strongest momentums and finds shares with high levels of dividends.
eedless to say, the combined effect is the momentum/dividend ‘fusion engine’, delivering incredible returns.
Reef Casino Trust [ASX:RCT] happened to be one such a stock in my discovery.
However, a number of others also appeared in the list, such as: Beyond International Ltd [ASX:BYI], Industrial REIT [ASX:IDR], Landmark White [ASX:LMW] to name a few.
What were the specifics in my strategy?
For one, you need to find stocks that have relatively consistent medium-term returns.
But that’s not all.
To make sure it is a true momentum stock, you also need to look at the ‘directional movement index’. You want this index to be quite strong if you want to search for short momentums.
Lastly, you have to look for stocks with high dividend yields. This would help you to find those high income stocks that have strong momentums.
My strategy has outperformed the ASX200 by over 300% since 2009. It has outperformed the ASX200 by more than 20% since May this year.
My advice to you is to stop looking at large caps as a defensive strategy or as an income play when their share prices have clearly suffered.
It is time for you to look at the emerging trend world that I operate in!
But should you be getting back into banking shares now? My own trading model on CBA has been ‘flashing green’ in the last three weeks. This gave a tiny 2% return over the three weeks. Cyclically, it is hard to say if the banking stocks have bottomed.
Emerging Market Analyst, New Frontier Investor