Is it time to sell the big Australian?

Founder and Publisher of the Switzer Report
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Iron ore stocks such as BHP were drawn into an intriguing story when we learnt on Friday that some of China’s biggest steel mills have called for an investigation into why the price of iron ore has spiked to unexpected levels. And not surprisingly, BHP’s and Rio’s share price copped it on Wall Street and in London over our weekend.

BHP is a stock that a lot of us hold and I have to admit I do have a big holding in my portfolio ever since I started pondering on my TV programme — SWITZER — if it was a good idea to buy the miner in 2016 when its share price was in the low $14 region. I didn’t have the courage of my convictions until it was in the $15 area but that’s my investing way, where I wait for clues that my assessment of a beaten-up, quality company is agreed to by the market. And then I buy.

That said, BHP isn’t my typical company as it’s not a renowned dividend payer but it has beaten its poor dividend history in recent years, which has been a nice happenstance for me. However, I know I have to lighten off with the company, to buy better dividend payers, especially as I migrate my SMSF portfolio to a more defensive income stance, in case a black swan event comes along to negatively affect my still positive view for stocks.

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