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Re: A beginners possible portfolio

Here is my 2c

Low risk 90% - incorrect. All these equities have different risk profiles.

ORG origin - retail gas utility. Brownfield infrastructure has lower risk to cashflow due to the demand elaticity of the product being sold, gov't regulation of gas prices, and the exponential growth of the replacement costs currently being witnessed.

WDC westfield - Dec Qrt 08 (to be dislcosed in Jan 09) will be a crunch time for retail cap rates. In Westfield's favour is that they own mostly regional shopping centres and they have relatively low gearing. On the downside is cap rate expansion is evident across all property classes (see CFS recent announcement) and even regionals are blowing out by 25 bp. This is despite the historical divergence between cap rates and treasuries which one day will return to their historical means.

IPL Incitec Pivot - monopolistic supplier of fertiliser product. Good outlook for soft commodities given drough breaking in Aus and the outlook for inflation.

CBA Commbank - loan book looking a tad sick. Farcical equity raising means instos might prefer other banks next time once tier 1 is further eroded by as yet undisclosed provisions for bad debts (we are heading into a recession and a big plunge in commercial property -  a 'no brainer'). Positive is a fully franked divvie in the region of 8%, a reasonably robust regulatory framework and an ever strengthening oligopoly.

BHP - diversified miner. Look at commodity prices (oil, coal, iron ore, nickel etc) - it has been a historic 'up with the stairs, down by the elevator' as Lehmans has precipated a deleveraging event the likes of which has not been witnessed for many a moon. Plusses is a strong, strong balance sheet and many a struggling, tasty morsel to acquire. Also oil will not remain in the doldrums and base metals will recover over time (copper is the one to watch).

STO santos - what is your forecast for the oil price?

So my 2c.

If you truely want 'low risk' then treasuries and cash are at the bottom of the risk spectrum.

Next level is traditionally corporate bonds, though remember that sub-prime has spooked investors and thus default risk is being 'exaggerated' by the market. Where there is smoke, there is fire a la Ford, GM, GE and the like.

PS: 'Risk', while a hydra-type measure, is primarily the risk to your capital in this market. What the market did wrong in 2006-2007 was misprice risk (eg yields on securitised subprime mortgages) and, in effect, leverage off an illusion re asset prices. Hence the nasty capital destruction we are witnessing.