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Is CBA a good buy?

Discussion in 'ASX Stock Chat' started by Tl9998, Jul 25, 2018.

  1. Tl9998


    Likes Received:
    Jun 21, 2014
    Just interested to hear some perspectives for CBA at the present time?

    I recently bought 100 shares at $74.30 and was attracted by the dividend growth. But since buying it, I am concerned with headwinds such as the possible mortgage crisis with a potential rates increase. Further, their future capital growth increases.

    I have a long hold strategy with my shares, but this is my first bank purchase.

  2. greggles

    greggles I'll be back!

    Likes Received:
    Jul 28, 2004
    How long do you intend to hold? One month? One year? Ten years?

    It's a difficult question to answer. If you are looking at a long term hold then you'll probably be fine.

    Short term is a different story. Your concerns about headwinds are well placed and there is still quite a bit of downside risk, especially in the wake of the banking royal commission.

    explod likes this.
  3. aus_trader


    Likes Received:
    May 30, 2017
    It's a tough question to answer, I can only offer my perspective.

    I would have considered a non banking stock that still pays dividends, such as those in Medium/Longer Term Stock Portfolio given the possible negative sentiment to the banks at the moment due to Royal Commission/Money laundering claims especially aimed at CBA.

    If it had to be a bank I'd consider one of the others especially since you are aiming to hold for the longer term. This is the reason: I know that CBA holds the largest quantity of residential mortgages and if there is a crisis(as you've mentioned) or even a few defaults here and there due to an economic downturn, then which bank has the higher probability of write downs ? Something to think about.

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