Don’t be a downgrade victim this May

Few feelings are worse for an investor than seeing a holding sink on the back of an unexpected profit downgrade. As holders of Surfstich (down ~72% YTD) or Murray Goulburn (down ~60% YTD) are no doubt aware, these downgrades can be devastating to performance. Common wisdom holds that avoiding the portfolio bombs can contribute more to relative performance than trying to pick the big winners. So as May ‘confession season’ rolls on, what can investors look out for in their own portfolios to try to identify the potential downgrades? In this Collection, we asked three of our regular contributors how they go about identifying and avoiding potential downgrades. Responses come from Chris Prunty at Ausbil Investment Management, Tim Kelley at Montgomery Investment Management, and Sean Fenton at Tribeca Investment Partners. (VIEW LINK)