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As a fledgling investor, would be interested to know if anyone has been following this strategy based on Australian stocks?
Forgive my ignorance but is our All Ords the equiv to the DJIA?
Alternatively is it cost effecient to buy DOW stocks from Oz?
Can you invest in the Foolish Four using a DRP fund?
Tried to search for these questions but cannot seem to restrict search to Aust Board.
Would really appreciate any help.
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Don't know why you can't restrict search to Aus board.
Some people on this site got quite indepth with their calculations trying to come up with a good system for an Oz foolish 4. Back about post 300 I think.
The problem is that the Dow doesn't really have a counterpart in Oz.The stocks in the Dow hardly ever change. The Dow is 30? very very large stocks on the NYSE with different sectors represented,ie transport,oil,technology etc. The closest thing on the Oz market is probably 20 or 50 leaders, but it is not quite the same. The Dow stays the same but the Oz 20 & 50 can be different every week depending on market cap/share price fluctuations.
Therefore the very circumstances which signal a buy with the Dow foolish 4, make a share drop off the radar with an Oz foolish 4 (unless you just pick 30 Oz stocks and stick with them no matter what).
Another problem was that different sectors of the Oz market tradionally have different yield levels. This means that any Oz foolish 4 will be skewed to high yielding sectors - ie banks, listed property trusts, chemicals.
Really it appears any Oz foolish 4 is pretty hard to work out which also goes against the grain of the foolish 4 approach ie 15 minutes work a year on your portfolio. But this does not mean it is not a worthwhile pursuit, depends on the gain.
It is cost efficient to purchase shares in America, the tax differences and the exchange rate are much more relevant than the actual transaction costs. I have seen some brokers in the states advertise US$8 trades, actually I probably saw these ads on this site.
Probably the best place to research an Oz "Dogs" is in "Personal Investor" magazine/website "Dogs downunder"
Don't know the exact criteria but it is based along the same lines.
Happy learning and happy investing and remember Einstein said "Compounding interest is the 8th wonder of the world".
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Hi Seamus

I've haven't tried the FF4 approach myself as I only found out about it recently but it sounds interesting. I have done some investigating myself re Aussie FF4 shares. Barcoo has basically answered your question about where there is some info re Foolish 4 investing ie in Personal Investor mag.

Here is the exact address in case you couldn't find it. http://www.personalinvestor.com.au/

Also check out this article which gives some of the contrary views and some would say balance to the question. http://www.aspectfinancial.com.au/main.html

good investing


hal
4/5/00
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Yes. Check the Aspectfinancial message board (www.aspectfinancial.com.au).
Our All Ords isn't exactly the same as the DJIA. Our companies are generally smaller! Analysis of the Dogs of Dow or Foolish four strategy on the Australian market has been done...interestingly, the returns are not comparable to the US market. In addition, the returns on the US market by those strategies are also not comparable to what the strategies claim to give if compared from different time periods or commencing investments in the companies at a different time of the year...
As the Fools themselves say, it's a good thing to do your own research!
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