New share investors left out of pocket

Many “mum-and-dad” investors drawn to the sharemarket in recent times have been left out of pocket as popular blue-chip stocks have slumped in value – some by more than 40 per cent – over the past three years.

Shaw Stockbroking's Scott Marshall says that if you're planning to retire within the next couple of years you have a problem, as the share markets “haven't been kind”. He said that many first-time investors were attracted to the sharemarket due to the public floats of organisations such as Telstra, as they felt comfortable with a familiar company. But many just parked their money in one stock and left it there. A lot of people have poorly structured investment portfolios. This is fine in a bull market, Mr Marshall said, but if there's a slide these portfolios are always exposed to a high level of risk.

Matthew Boase from Hartleys agreed that investors who have Telstra or AMP shares from floats have experienced a negative return over the past three years. However, investors with diversified portfolios have fared better, he added, especially if they've had stocks like Billabong, Harvey Norman and Flight Centre.
Some of the most popular stocks amongst general investors are Qantas, AMP, Telstra, the Commonwealth Bank, Coles Myer and Woolworths. The share prices of four of these have fallen over the past three years, with Telstra dropping more than 43 per cent. AMP has fallen more than 17 per cent and Coles Myer almost 28 per cent. Woolworths was the only positive stock, more than doubling over the three-year period.