If you had bought $30,000 worth of shares in Afterpay five years ago, you would have made $1.2 million this week.
But not everyone wants to hold and sell. So here are some ideas in the current market for investors with different timeframes.
The Quick Flip
At one time, for a good quick flip you’d got to the property market. You’d grab a bargain, give it a lick of paint and then get it back on the market again to make your profit and get out. Depending on how long the reno took, you might hold on for 12 months so that your capital gains tax on the profit would be halved.
But with property going gangbusters all over Australia, bargains are in short supply, particularly in our capital cities but one place you might look is to the regions. According to the latest Domain report, regional house prices increased by 4.5% in the three months to the end of June, and by 12.5% over the last 12 months.
With remote working becoming a permanent thing, and capital city house prices out of reach for many, it’s a fair bet that there is still some growth in regional house prices yet. So why not look to a regional centre which is growing in popularity for both owner occupiers and investors looking for those Airbnb dollars?
One such town could be the NSW town of Orange, which is featuring more prominently on the tourist trail and has become a culinary destination. Prices in Orange are heading higher, but the median price for a two bedroom home there is currently $427,500.
For a quick flip, grabbing a doer-upperer in a town like Orange and selling it into a rising market might be one idea worth considering.
If you prefer shares, how about looking at the list of upcoming floats or Initial Public Offerings (IPOs) on the ASX? Its sometimes hard to get an allocation for shares in a float but if you do your homework and get in early this can be done. Shares often trade at a premium on debut so the idea would be to get shares in the float and sell them the day of the listing.
One stock with a bit of hype is Tambourah Metals, which lists later this month.
Long Term
This week a lot of us have been kicking ourselves that we didn’t buy shares in Afterpay, purchased for a whopping $39 billion by US billionaire Jack Dorsey’s Square payments company.
Afterpay is a classic case of a growth stock, and these are fantastic for long term growth. An alternative is to buy shares in the banks or a blue chip miner like BHP Billiton and enjoy dividends, but long term most of us might be more excited by the prospect of getting aboard the next Afterpay. Those shares could be purchased for $2.95 five years ago and the takeover values them at $126.21.
So, which ASX stock is the next Afterpay I hear you ask. The technology sector is probably the best place to look and a number of names have been bandied about over the last few months as the next big thing. Here’s a few names: Harvest Technology, Vection Technologies, MyFiziq, ELMO Software or even Airtasker.
I’ll say no more and leave it up to you and your research, with the caveat that what goes up can also come down.
Leap of Faith
You might have seen stories recently about famous musicians selling their publishing catalogues. Bob Dylan sold his for US$300 million, proving there’s still money in songs.
You don’t have to be a songwriter to get a share in this. Songwriters often sell shares in royalties on websites such as TheRoyaltyExchangecom or SongVest.com and these are open to anyone.
A few months ago, the theme song to the Monkees TV show was up for sale, and you could have bought a share for US$3000. The song will continue to produce royalties until 2099.
It sounds crazy, but someone’s making money. Why shouldn’t it be you?