Woolworths Shares – How a “safe” portfolio stock cost investors almost a 40% loss on their investments and they probably don’t even know

Imagine if you blindly held Woolworth shares

Health and wealth can sometimes be closely linked. In fact there are many parallels between the two things most people wish for.
To be on the front foot, health wise, as we get older, regular check ups ensure if there is a problem, it is found early and is able to be treated effectively. Burry your head in the sand, and think “it will go away” is proven to be a quicker way to the cemetery than you would probably want!

The same can be said of your investments

Often, when working with clients that own shares, they have typically held them for many years, and intend to continue doing the same. Words like “Long Term Holding”, “Quality Stock”, “Blue Chip”, “Great Dividends” and “Safe Haven” tend to send a shiver down my spine, particularly in today’s ever changing market place.

If there is something sick in your portfolio, wouldn’t you want to know about it right now?

If you find out something is not right, you can fix it. Investing wise, that may mean reducing the holding or closing out, protecting the position by buying Put Options, or generating cashflow or “repairing” the position by using calls. The point is, better to do something than nothing, right?

Woolworths – the investment catastrophe

One stock held by many investors, is Woolworths. Historically, this has been a steady performer, pretty low risk and paying a nice healthy dividend to investors. What’s more the dividend is fully franking, providing great tax benefits for those holding the stock within their self managed super.
However, things change. Traditionally Woolworths has been a defensive investment, after all, it sells groceries, alcohol, tobacco and fuel, some of which, we buy week in and week out, irrespective of how the economy is going.