# Retirees - what are your top 5 long term stocks?



## Muschu (30 March 2008)

Hi
I hold about 15 stocks in my SMSF.
I'm looking at making a few changes to those stocks which are below my top 5 [by investment amount].  I buy for the long term but review as the situation requires. Dividends are a factor but by no means rule.
I'm not sure where to head if I make some changes and would be interested to know where fellow retirees see value for those of us in 'retirement mode'.
If you're interested in "sharing" then please respond.  I'm always willing to learn - and take responsibility for my own decisions.
For my part my top 5 holds, in order of investment value, are
BHP
WOW
NVT
WBC and
QBE.
My current thinking on changes is to seriously consider
TOL or AIO -- and 
TLC.
I'd be very grateful to learn what others in [or near] my situation are doig.
With thanks
Rick


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## Julia (30 March 2008)

Muschu said:


> Hi
> I hold about 15 stocks in my SMSF.
> I'm looking at making a few changes to those stocks which are below my top 5 [by investment amount].  I buy for the long term but review as the situation requires. Dividends are a factor but by no means rule.
> I'm not sure where to head if I make some changes and would be interested to know where fellow retirees see value for those of us in 'retirement mode'.
> ...



Hi Rick,

Can you say why you necessarily associate long term holds with retirement?
I'm not too far away from that phase myself but won't necessarily be managing my SMSF any differently, in that I intend to hold something as long as it's doing well, but drop it if it's not.

Re your top five, I also have BHP, WOW and QBE.  Next two are LEI and WOR.
I don't know anything about NVT.  What can you tell us about this and why it's in your top five?

I look at AIO from time to time but will give it more time before seriously thinking about adding it.
What is TLC?  Search says no such stock!

Another couple I have had but am temporarily out of given the current chaos are MON and OKN.  Will probably be back into both when confidence returns.


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## Muschu (31 March 2008)

Julia said:


> Hi Rick,
> 
> Can you say why you necessarily associate long term holds with retirement?
> I'm not too far away from that phase myself but won't necessarily be managing my SMSF any differently, in that I intend to hold something as long as it's doing well, but drop it if it's not.
> ...




Thanks for the response Julia.
Sorry, I meant TCL.... old age setting in? [TLC = tender loving care?]
Why does retirement make a difference for me?
I guess it's a very individual thing.
Initially I invested largely in managed funds which did quite well during the boom. 
However as I became more aware of "fee issues", which were often non-transparent, I decided to go largely the direct share route.  [Apart from a minor foray into platinum asia which I still hold].
I am working to establish, as best I can, a direct share portfolio that needs minimum change over significant periods.
I choose not to sit at my PC each day and trade / worry / hope.
I would prefer to fish, see my grandchildren and have a blue chip portfolio that, I am aware, will need to be re-visited from time to time but do not want portfolio monitoring to be consuming or, worse still, obsessive. I don't mind it being an "interest".
I've just bought and started to read an interesting book "How much is enough?" which appears to be largely in tune with what I know of my own philosophies.
One thing I do know is that I am not into maximum monetary profit at the expense of family, life-style and health.  
Ok
NVT - I believe the long term prospects for international educational programs are grossly underestimated in our "global village".  NVT has become the world leader since floating and are now in most Aussie states, the UK, Africa, Canada and soon - Singapore. FF dividends and dedicated proven management.  They have pretty much locked themselves into pole position in a mammoth market and will, IMO, keep expanding from a well-researched base.  
AIO - seems cheap [risky?] but would add diversification to my portfolio.  
TOL - seems much safer, less debt-laden and under-valued.
TCL - dividend proved and able to carry debt.
The rest of our major portfolio [which is not huge so please don't consider me a major player] is in other banks, WES, WPL and [to a tiny extent] resource stocks such as OXR, SMY, TTY and AXO.
My understanding of LEI and WOR is that they're very "solid" although I am not a holder at this time.
MON and OKN I will research - thanks Julia.
Regards
Rick


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## Bill M (31 March 2008)

Hello Muschu, I have been retired for 7 years and live off my investment portfolio.

For me my top 5 are:

CBA and NAB: I have held banks for many years, they always pay increasing dividends and regardless of their present slump on the market they will always stay in my portfolio. As opposed to many others on the forum I was buying the banks again in this current slump as they are always a good long term investments.

TAH: No matter how hard times get Australians always like to drink, gamble and eat out. Every casino I ever go to is always busy, restaurants full and many gamblers on the floor, I doubt they will never go broke. TAH has always paid good dividends, even with horse flu last year the dividends kept on coming. 

WES: As long as the world needs coal, locals go to Bunnings and we all need groceries WES will always be around. A well managed company and again very good fully franked dividends.

WDC: A top well managed Property Trust. Frank Lowey is the 2nd richest person in Australia, came to Australia with nothing and now has set up a multi billion $$ property Portfolio. Every Westfield store I go into is choc a block, there is a queue to lease a bit of area in those stores. With his assets around the globe and hardly any available leasing left this company is doing very well. Dividends are unfranked but this is one company I will never sell.

I go overseas sometimes for 6 Months at a time, with the above stocks I hardly ever need to look at them. If I do and the share prices are ridiculously low then I buy more providing everything is in order. Since owning them not once has any of the above companies ever defaulted on a dividend payment, hope that helps.


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## josjes (31 March 2008)

Although I am not a retiree, I have a SMSF. I might add that holding a well managed, proven performer of LIC likes ARG and AFI can be a part of your portfolio. Or an index fund like STW (ASX Top 50), there is study, can't remember it (but if you google it you'll find it), but there was one done in the US some time ago that clearly indicated that index funds over the longer term significantly outperform actively managed funds. 
Also, ishares have International Index fund (ETF) covering diversified range of international markets and regions, I have them as well. (www.ishares.com.au).

Cheers


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## Julia (31 March 2008)

Correction to my earlier post:  
Rick, you're not the only one getting the code wrong:
I mentioned MON.  Should have been MND - Monadelphous.

Thanks for clarifying on TCL, Rick.  Used to have this.  I've just had a look at it - it's held up pretty well, hasn't it, and from memory has a good dividend.


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## Muschu (31 March 2008)

_"Thanks for clarifying on TCL, Rick. Used to have this. I've just had a look at it - it's held up pretty well, hasn't it, and from memory has a good dividend."_

Very good dividend Julia.  [There is or was a TCL thread on ASF] I had this stock for a few years and was disappointed as it's growth was much slower than my other stocks.  I sold last year. Although it's considered defensive TCL could [imo], if picked up again closer to the $6 mark, work it's way back to $8 while rerurning a good dividend stream.   Given the change of market climate it is probably worth a go and not likely to contain the risk element of so many others.  However I think today's price is too high.

The only things I'm really watching right now are QBE and NVT.

Rick


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## rhen (11 April 2008)

Like Julia, I am not quite there yet... Would encourage others to subscribe to this thread because it does make interesting reading and it does make one (iff me) look more closely at the portfolio. Glad you've only requested five...
CSL: head and shoulders above the rest
MQG: more risk than I'd like
CST: the result of a previous buy and hold philosophy which I have been selling down over the past few years.
NAB: 
GDY: one for the future (one hopes)

In no way would I suggest this five as a retiree's recommended portfolio. I suggest there is no one size fits all solution. However, I do like Bill's selection.
I encourage others in a similar position to add to this thread.


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## Julia (11 April 2008)

rhen said:


> CSL: head and shoulders above the rest



Rhen, what was the reason for the massive drop here from over $100 to under $40 in November?  Certainly the whole market dropped, but that is astonishing.



> MQG: more risk than I'd like



Yes, me too.  Sold this when it was obvious it was going to be badly affected in the downturn.



> CST: the result of a previous buy and hold philosophy which I have been selling down over the past few years.



I wasn't familiar with this one.  Just had a look.  Not surprised you're selling it down!



> NAB:
> GDY: one for the future (one hopes)



Another I don't know.    It has done reasonably well until recent times, hasn't it.

Anyone else?  We can all learn from this sort of exchange of views.



> In no way would I suggest this five as a retiree's recommended portfolio. I suggest there is no one size fits all solution. However, I do like Bill's selection.
> I encourage others in a similar position to add to this thread.


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## Nick Radge (11 April 2008)

A core holding in my portfolio is Invocare (IVC). People gotta die regardless of the economy. Harsh but true.

I'm about to add QBE. Apparently they are the only insurer that is willing to underwrite the new PI laws that ASIC have made as law for all financial services businesses as at July 1. Can't beat 'em, so buy their shares!

_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information._


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## Gurgler (11 April 2008)

Julia said:


> Rhen, what was the reason for the massive drop here from over $100 to under $40 in November?  Certainly the whole market dropped, but that is astonishing.





Julia re CSL they split 1 into 3 thus the $40 represents $120 on pre-split basis


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## agro (11 April 2008)

Bill M said:


> Hello Muschu, I have been retired for 7 years and live off my investment portfolio.
> 
> For me my top 5 are:
> 
> ...




would have been burnt on that today -20%


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## Bill M (11 April 2008)

agro said:


> would have been burnt on that today -20%



Correct, it is what I call a "black swan" event, no one saw it coming. It is unfortunate and such an event can happen to anybody and with any stock. It is important to remember that none of new rules come into effect until mid 2012, a lot can happen in the 4 years to come. I would think they will manage their business accordingly. For now I will continue to hold this stock, however it is fair to say that it would not be one of my top 5 picks anymore.


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## rhen (11 April 2008)

Bill M said:


> Correct, it is what I call a "black swan" event, no one saw it coming. It is unfortunate and such an event can happen to anybody and with any stock. It is important to remember that none of new rules come into effect until mid 2012, a lot can happen in the 4 years to come. I would think they will manage their business accordingly. For now I will continue to hold this stock, however it is fair to say that it would not be one of my top 5 picks anymore.




Yes, Bill, an X factor where the factor should know better (I guess).
Does the Victorian Government understand the ramifications of their actions?
We really do need such events to occur to our market at this point in time?
http://www.bloomberg.com/apps/news?pid=20601081&sid=aPoaNVgV8sTE&refer=australia


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## davo8 (14 April 2008)

Bill M said:


> CBA and NAB: I have held banks for many years, they always pay increasing dividends...




Past tense: have paid. They may survive the credit crunch, but the days of growth are over. Be grateful if the dividends aren't cut too.

TAH: Enough said. Hard luck!

WES: No growth for years, loaded with debt and a consumer downturn yet to come. Enjoy your dividends, if they last.

WDC: 20%+ below its top, another mountain of debt, and shopping centres very vulnerable to recession.

The entire finance/insurance/real estate sector is built on credit and leverage. It was fun while it was going up, but it isn't doing that any more. You can't really believe we've seen the bottom yet. Can you?


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## Julia (16 April 2008)

I'd have to agree with Dave08 on this.  

WES is constantly mentioned as a "core stock".  Why?  Dunno, except that it's one of Australia's largest companies.  But as Dave has pointed out, the SP has gone nowhere in two years.  

Ditto the outlook for WDC.  If the US is in recession - and there's no reason at this stage to imagine the outlook there is going to get better any time soon - then the level of investment WDC has in that country's shopping centres is unlikely to be very profitable.


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## Muschu (4 May 2008)

Hi
A personal review:
Long term holds do not necessarily equal forever.  For me I hope it means at least reduced time spent in monitoring my portfolio.
Since this thread began I have sold nothing but bought a little.  I am working towards my top holds being:
BHP
WOW
QBE
LEI [new]
TOL [new]
------------------
I "may", or not, add one or more of WOR, IPL, IVC, BBI.
I may also reduce my bank holdings -- not sure.

Thought I'd update as to where I am.  Comments always welcome.  I have found previous comments in this thread useful.  Thanks.


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## davo8 (5 May 2008)

Muschu said:


> Hi
> BHP WOW QBE LEI [new] TOL [new]
> I "may", or not, add one or more of WOR, IPL, IVC, BBI.
> I may also reduce my bank holdings -- not sure.




The credit crunch is far from over. The USA is getting worse and worse; UK is following. Europe, Asia and Australia will at least get caught in the fallout.

It's called deleveraging -- resolution of excess credit, eventually by defaulting on debt. It is highly unlikely that banks and financials will prosper through this process and some may get hit hard, so they should form a smaller part of a long term portfolio. QBE and BBI could be affected.

We are likely to get some degree of economic downturn, and it could be quite severe. Defensive, low P/E, resource/energy/health are suggested.

These are scary times, quite unlike anything else the world has seen in many decades.


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## YELNATS (5 May 2008)

davo8 said:


> The credit crunch is far from over. The USA is getting worse and worse; UK is following. Europe, Asia and Australia will at least get caught in the fallout.
> 
> It's called deleveraging -- resolution of excess credit, eventually by defaulting on debt. It is highly unlikely that banks and financials will prosper through this process and some may get hit hard, so they should form a smaller part of a long term portfolio. QBE and BBI could be affected.
> 
> ...




I see this as unduly morbid. Although we're not out of the woods yet, we're all still breathing aren't we?


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## davo8 (6 May 2008)

YELNATS said:


> I see this as unduly morbid. Although we're not out of the woods yet, we're all still breathing aren't we?




Prudent, not morbid. The US banking system is insolvent, and running out of short term funds. The UK is following. Our RBA has already lent about $10 billion to stressed banks stuck with illiquid RMBOs and other paper. It will lend more.

Something very bad is going to happen in the USA within months, it will hurt the global economy and our major defences are housing and Chindia buying our rocks. A prudent long-term view would reduce exposure to all stocks, especially financials, and increase cash for at least the next 3-6 months. If China folds after the Olympics, head for the lifeboats.


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## Nicks (7 May 2008)

Rick - i'd go TOL over AIO. AIO too risky with its debt at the moment. TOL has next to bugger all debt and has stong growth strategies that it has proven in the past it is good at.

TCL - well you know my thoughts on this. People need to drive. They have a very predicatable cash flow down to the point where they virtually know how many cars are going to use the Toll booth each day.


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## Muschu (9 May 2008)

Nicks said:


> Rick - i'd go TOL over AIO. AIO too risky with its debt at the moment. TOL has next to bugger all debt and has stong growth strategies that it has proven in the past it is good at.
> 
> TCL - well you know my thoughts on this. People need to drive. They have a very predicatable cash flow down to the point where they virtually know how many cars are going to use the Toll booth each day.




Thanks Nicks.  These past 2 weeks or so I added TOL, LEI and WOR [not in large quantities] to my portfolio.  To date, over a very short period of course, TOL [where I bought at $8.05 and $7.55] has been good value.


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## vciscato (11 May 2008)

Muschu said:


> Hi
> I hold about 15 stocks in my SMSF.
> I'm looking at making a few changes to those stocks which are below my top 5 [by investment amount].  I buy for the long term but review as the situation requires. Dividends are a factor but by no means rule.
> I'm not sure where to head if I make some changes and would be interested to know where fellow retirees see value for those of us in 'retirement mode'.
> ...




Hi rick.
I also am a retiree and manage a share fund for over 20 years. I look for undervalued stocks that pay a good dividend. If you intend to go with the heavyweights look at : SUN,AWC, FXJ, FGL, GPT, ZFX otherwise the following are good value: CGF, AHD, ALZ, ASL, CXG, DWS, GMG, HFA, NOD, TIM, APA, SIP.
Good luck,
Vic


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## Muschu (11 May 2008)

vciscato said:


> Hi rick.
> I also am a retiree and manage a share fund for over 20 years. I look for undervalued stocks that pay a good dividend. If you intend to go with the heavyweights look at : SUN,AWC, FXJ, FGL, GPT, ZFX otherwise the following are good value: CGF, AHD, ALZ, ASL, CXG, DWS, GMG, HFA, NOD, TIM, APA, SIP.
> Good luck,
> Vic




Thanks for sharing all this info Pat -- it all helps.  May I ask how many stocks, roughly, you hold at any one time.  I just checked and have 14 supposed blue chips and 3 small specs.  These are not all held in the same proportion of course.  BHP and WOW are my largest.  In the mix are also [????] WBC, ANZ, CBA and MQG.  The first of these I've held the longest [2005] and am still marginally in front.  The others are losers - at this time anyway.  In my view it seems not too late to shed them and move elsewhere.
Good luck may be needed!
Thanks 
Rick


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## Julia (11 May 2008)

vciscato said:


> Hi rick.
> I also am a retiree and manage a share fund for over 20 years. I look for undervalued stocks that pay a good dividend. If you intend to go with the heavyweights look at : SUN,AWC, FXJ, FGL, GPT, ZFX otherwise the following are good value: CGF, AHD, ALZ, ASL, CXG, DWS, GMG, HFA, NOD, TIM, APA, SIP.
> Good luck,
> Vic



Vic, you describe these as 'undervalued'.   Do you have a reason for thinking their 'true value' will soon be recognised and they will begin showing some growth, or are you picking them purely on the basis of their yield?


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## vciscato (11 May 2008)

Hi Rick,
I select stocks on the basis of technical analysis but also consider the fundamentals as well. Sure the yield must be around or above market average, it must not have too much debt, a history of increasing dividends and growth are all factors that are considered when deciding whether the stock should be purchased.

For example you mentioned TCL, I had this stock and sold it last year when it started to break support on weekly charts. I am still looking at it for purchase when the chart pattern looks more likely to rise than fall. The fuel price will cause people to use toll roads less and TCL will more than likely reduce its profit forecast in the future. the chart is certainly not bullish at the moment.

Cheers, vic


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## Muschu (29 May 2008)

An update:

Since this thread started I have learned a little, just a little, about how to read charts.  I have to thank, but won't name, a few ASF members for their support in this.

I bought TOL, for example, after this discussion began and before I had a basic understanding of charts - and I bought at an average price of $7.97. They went up to about $8.60 or so and I thought this was pretty good.  At the time I knew nothing of moving averages.  Then I watched them come down - and down - and down to as low as $7.26 or thereabouts.  So I sold them - at a loss.  Could have been a mistake but there seemed a greater risk here than elsewhere.

Meantime I was trying to find stocks that looked good, over a long period, in terms of fundamental and technical analysis.

The only stocks that I have had for some time that I am happy with are BHP, WOW and RIO.  Not many.  Maybe QBE as well. [Interested to read that Nick Radge was considering QBE].

Over 3 years these shares have gone from [approx]

BHP $17 - $46
WOW $17 - $28
RIO $45 - $144
QBE $15 - $24.

The other shares I have, which include the banks, have done quite poorly.

I have recently added

LEI $10 - $50 in 3 years
CSL $10 - $39 [May be incorrect. I "think" there was a 3:1 split in the period]
WOR $8  - $39. [Don't feel as confident about this choice in the short term]

I am now considering, in lieu of my poor stocks, [can't just keep adding unless the $$ are limitless], and I don't have any of these at this time:

IPL $20 - $170 [staggering - can it continue?]
AAX $2 - $16
SGM $17 - 36
ORI $5 - $30
FLX $5 - $20
GCL $3 - $12.

Please note that these are approximate SPs only and are subject to correction.

I don't think any of the companies above are minor ones.  Not sure re GCL.
There may also be an over-emphasis on resource or resource-related stocks here.  Maybe the above list is too narrow in scope - lacks sufficient diversity?

Any comments from ASF-land?  Suggestions? Criticisms?  Other stocks to investigate?

Rick


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## nioka (29 May 2008)

Long term stocks for retirees seems the wrong way to go. Long term stocks are for those looking towards retirment and preferably looking a long way ahead. Today I hold over 20 individual stocks, none are long term. I'm retired (tired yesterday, tired again today so that makes me retired) so it is short term for me. So much so that the only reason I get the reduced capital gains tax is if a share keeps me on hold while I wait for the fundamentals to be understood by the masses so the price will rise. Even then I often trade the bumps so I still miss out on the reduced tax.

 I hold some stocks eg, MCR (which I consider to be a great long termer) but when the price is right it will get cashed. At my age it is a sport as much as anything and to have to hold long term would be dull.


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## Julia (29 May 2008)

nioka said:


> At my age it is a sport as much as anything and to have to hold long term would be dull.



This is where it comes down to the personality and preference of the individual, I guess.  Nioka you find it 'a sport', whereas maybe Rick wants to set up a fairly 'safe' portfolio so he can then go off and do other things, only feeling obliged to check the shares when he feels like it.  (Apologies if I'm being presumptuous here, Rick).

Personally, I like having a core bunch of long term stocks.  However, if any of them suffer a life-threatening event, then they are out.

e.g. you have sold TOL, Rick.  I'd have done the same.  You can always buy it back if it does take off.


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## Muschu (29 May 2008)

Julia said:


> This is where it comes down to the personality and preference of the individual, I guess.  Nioka you find it 'a sport', whereas maybe Rick wants to set up a fairly 'safe' portfolio so he can then go off and do other things, only feeling obliged to check the shares when he feels like it.  (Apologies if I'm being presumptuous here, Rick).
> 
> Personally, I like having a core bunch of long term stocks.  However, if any of them suffer a life-threatening event, then they are out.
> 
> e.g. you have sold TOL, Rick.  I'd have done the same.  You can always buy it back if it does take off.




Quite right Julia.  I want to go fishing, play with the grandkids, walk on the beach, watch the sunset -- and tinker occasionally with my portfolio.  I'm trying to establish, as you know, the kind of p/f you describe.  Nioka may wish to spend more time monitoring than I do.  Personal preferences which we all respect.


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## nioka (29 May 2008)

Muschu said:


> Quite right Julia.  I want to go fishing, play with the grandkids, walk on the beach, watch the sunset -- and tinker occasionally with my portfolio.  I'm trying to establish, as you know, the kind of p/f you describe.  Nioka may wish to spend more time monitoring than I do.  Personal preferences which we all respect.




 In between checking the shares and the forum I did go fishing ( no fish but a daddy of a mud crab) All you need is a lap top, a good boat and live at the waterside. The grandkids come for the fishing and the boat and when all else fails there is always the garden. A very wet day here ' hence the extra posts.
 Fishing comes first and gardening second, the shares do come after both.


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## brianwh (5 June 2009)

Would be very interested to hear an update on these comments especially in light what has happened to equities over the last 12 months.

In my own case I bailed out from my FP in September last year and went SMSF. I have made some good priced acquisitions eg TOL $5.10, WES $16.90, WPL $28.00 and some not so good eg TLS $3.85. But I am also worried I may have missed some good prices particularly with the banks. I'm going to hang on a bit longer and hope to buy in the dips.

At this stage I only have stocks in the ASX Top 50 - typically the ones mentioned in this thread - and am aiming for 30-40% Australian equities in my Fund.

Love to hear what others are doing

Cheers


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## Bill M (5 June 2009)

Hello Brian, I held CBA and NAB and topped up on both through their share purchase plans. CBA at $26 and NAB at $19.99.

WES and TAH, also held all the way through and again topped up on the share purchase plans. The best SPP was WES at $13.50, total bargain that was.

The only one of my 5 picks I cut was WDC at $17.50. I have replaced WDC with STW an Index Fund that tracks the ASX 200. I am very happy with what I am holding now, cheers.


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## brianwh (5 June 2009)

Bill M said:


> The only one of my 5 picks I cut was WDC at $17.50. I have replaced WDC with STW an Index Fund that tracks the ASX 200. I am very happy with what I am holding now, cheers.




WDC looks like a good decision now Bill. I'm not too familiar with STW are they a general index fund?

Big question for me at the moment is how long to wait before I top up with banks - long term I would definitely want a bank in my top 5, probably WBC.


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## ROE (5 June 2009)

brianwh said:


> WDC looks like a good decision now Bill. I'm not too familiar with STW are they a general index fund?
> 
> Big question for me at the moment is how long to wait before I top up with banks - long term I would definitely want a bank in my top 5, probably WBC.




I would buy CBA over WBC  I know all analyst said CBA reward ratio is not there and WBC offer better value ..my head are not wire the same as them....but one thing I know about banks is

NO ONE knows any of their books, Those who claim to know a lot about it either 

A. They know something of the unknown
B. They know they don't know 

it's complex web of derivatives, Credit Default Swap, Interbank lending, different type of loan books....my head spins just to think of it..

All it left is management and I buy banks based on management rather than the numbers and CBA management is tops.

Gail Kelly a bit of a crazy liers  or she doesn't know what she is doing...
Just go back and watch some of the dividend questions people put on to her sometimes ago ...hmmm...
and I got some 25 years till retirement  ..DOHHH


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## So_Cynical (5 June 2009)

brianwh said:


> WDC looks like a good decision now Bill. I'm not too familiar with STW are they a general index fund?
> 
> Big question for me at the moment is how long to wait before I top up with banks - long term I would definitely want a bank in my top 5, probably WBC.




The STW ETF (exchange traded fund) tracks the ASX200 so is made up of approximately 25% banks/financials.

Have a look at the latest holdings list http://www.spdrs.com.au/etf/fund/fund_holdings_STW.html


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## nathanblack (5 June 2009)

i think its a lifestyle choice. most retirees are looking for less volatility in earnings(divs) and SP, also a retirees timeframe is less than that of someone just starting out. so a portfolio tends to be more defensive, there needs to be cash on call for living expenses and holidays, term deposits for future living expenses, and a mix of dividend and growth stocks.

growth is more important than some realise, especially the young starting out trying to save for retirement. so many advisors try telling people hpw they can have $1mil for retirement if they follow certain steps.

they dont tell you that with inflation over a 20 or 30 year timeframe that your $1mil is worth closer to 300k in todays money.

you need the growth to outstrip inflation. me, im only young but i have a dream to retire within 5years and live a modest life in SE asia. by living there my expenses are lower and my portfolio needs to earn less.

a portfolio that can earns less, can either take less risks or have a lower capital(my case). but as i will be retired alot longer than most i need a portfolio with strong growth to allow for many years of inflation. after all i may be able to live of $20k earnings/year today but what about in 20years?

im taking some punts atm, because worst case it prolongs my early retirement by a year or so. best case it gives me an even earlier or luxurious retirement


----------



## nulla nulla (5 June 2009)

BBP
CNP
QTM
INT
VBA

Be prepared for sudden rises and falls, try to buy low and sell high. And be ready to cut and run at any moment.


----------



## RayG (5 June 2009)

At the risk of being branded a heretic,  I think you should forget share price movements for all intents and purposes, the gain is only realized when you sell.

For long term, I would look at dividend returns more closely, and stick with blue chip that have a long term reliable record of good dividend returns.  

Medium to long term, I would go with banks and resources.  BHP, NAB, CBA, WPL.  Don't forget TLS for % dividend returns,  as I am reminded every time I get a phone bill.... !

Think in terms of being an part owner of the business you are investing in. 


Regards
Ray


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## Julia (5 June 2009)

I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.

That anyone will happily accept a loss of capital as the SP falls just because they're getting around 7% or 8% in yield is beyond me.

Nathan has very well described the need for continuing growth shares in any portfolio, even retirees'.


----------



## nulla nulla (5 June 2009)

Julia said:


> I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.
> 
> That anyone will happily accept a loss of capital as the SP falls just because they're getting around 7% or 8% in yield is beyond me.
> 
> Nathan has very well described the need for continuing growth shares in any portfolio, even retirees'.




Anyone doing their homework atm would realise the the much maligned REIT sector shares are paying in excess of 10% yield on current price levels. This is after the dividend cuts and capital raisings. Go figure


----------



## Bill M (5 June 2009)

Julia said:


> I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.



It isn't rocket science Julia. Case study now. ANZ bank are now $16.30. ANZ Shareholders have now been offered new ANZ shares through the share purchase plan at $14.50, this represents a fully franked yield of 7%, grossed up 10%. (and that is after the dividend cuts)

So if you can buy 15K worth of ANZ and pull a 10% grossed up yield plus pick up $1 or $2 capital gain in the mean time then don't you think that's a good idea? I will certainly be taking up my share purchase plan offer, it sure beats getting 4% in a bank deposit. Also I have an ultra long term view, all the banks will prosper again in the future just like they have always in the past, the capital gains will eventually come.


----------



## Iggy_Pop (5 June 2009)

CBA

BHP

WOW

TLS

WDC

and just bought some ANZ to be part of the capital raising

Not a retiree yet though planning for it


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## Julia (5 June 2009)

Bill M said:


> It isn't rocket science Julia. Case study now. ANZ bank are now $16.30. ANZ Shareholders have now been offered new ANZ shares through the share purchase plan at $14.50, this represents a fully franked yield of 7%, grossed up 10%. (and that is after the dividend cuts)
> 
> So if you can buy 15K worth of ANZ and pull a 10% grossed up yield plus pick up $1 or $2 capital gain in the mean time then don't you think that's a good idea? I will certainly be taking up my share purchase plan offer, it sure beats getting 4% in a bank deposit. Also I have an ultra long term view, all the banks will prosper again in the future just like they have always in the past, the capital gains will eventually come.



I wasn't aware we were discussing share purchase plans, Bill.  Thought the comparison was between buying for yield versus buying for capital growth.

And just looking at ANZ during the peak of the bull market, i.e. beginning of 2006 to end 2007 it only went from around $24 to about $30.

But each to his own.  Good luck with it.


----------



## Muschu (5 June 2009)

It's a hazardous market isn't it? I have made a cautious, measured re-entry since the uptrend was reasonably clear.  However I am sticking with major and/or very defensive stocks and an index [STW] for the moment - but the investment level is not huge.  Most are 100% FF and pay reasonable dividends.  
Of course the market could turn sour at any time.  At that point I could hold and weather the storm [which is probably what I would do at this stage] - but I could also sell and, unless a downturn is exceptionally rapid, come out OK in most instances.
There are bound to be better "retirement strategies" than mine but the balance I have at the moment has me sleeping well.
I'd forgotten about this thread and the title is probably questionable now.
Regards to all
Rick


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## So_Cynical (5 June 2009)

Muschu said:


> It's a hazardous market isn't it? I have made a cautious, measured re-entry since the uptrend was reasonably clear.




Since October ive brought and sold


SUN
ENE
MDL
TRY
VRL
ALL
ILU

Made money on all of them....100% winning ratio, hazardous market....no not really.


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## nunthewiser (6 June 2009)

i cant believe no one has mentioned MTS

worth a read for all you warchest holders


i hold


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## RayG (6 June 2009)

Julia said:


> I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.
> 
> That anyone will happily accept a loss of capital as the SP falls just because they're getting around 7% or 8% in yield is beyond me.
> 
> Nathan has very well described the need for continuing growth shares in any portfolio, even retirees'.





Julia, it's just a different mindset...  the time for accumulation and saving has past, it's time to enjoy life, grandkids, hobbies, travel... now are you going to buy TLS (with 8% dividend) or something else with 2% dividend.... 

Nathan pointed out the need to take inflation into account, that isn't always going to be compensated for by capital growth,  take the last 12 months as proof of this.

My point, in it's simplest form is, you can't eat increases in SP without selling!   

Dividends will pay for the plane tickets. (and put food on the table)  

Regards
Ray


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## Julia (6 June 2009)

RayG said:


> Julia, it's just a different mindset...  the time for accumulation and saving has past, it's time to enjoy life, grandkids, hobbies, travel... now are you going to buy TLS (with 8% dividend) or something else with 2% dividend....



Hello Ray:  yes, I get the different mindset thing.  Presumably you consider you have more than enough capital and it doesn't matter if it's eroded somewhat.

TLS  - am I going to buy that?   No.  Because the 8% dividend doesn't equate to the loss in capital.   I regard capital preservation as the first focus.

Back to ANZ as discussed with Bill:   if you sold this at or around $30 when the market started to fall away, you could re-enter with twice as many shares, therefore double the dividend income now.
To me this makes more sense over both the short and longer term.

As you say, it's all about different mindsets and we all do what is most comfortable.


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## Bill M (6 June 2009)

Julia said:


> Back to ANZ as discussed with Bill:   if you sold this at or around $30 when the market started to fall away, you could re-enter with twice as many shares, therefore double the dividend income now.
> To me this makes more sense over both the short and longer term.



I know from other posts that you got out of the market at pretty much the top, that is truly an outstanding effort, well done. Were you equally as astute to get back in when the market hit 3111 when it was down some 55%? Unfortunately I am neither good at picking tops or bottoms so tend to buy when stocks are beaten down, I managed to slip in a small buy on March 9th but that was just pure luck. Since hitting that low point the market has already jumped 30%. CBA hit $24 2 Months ago, it has jumped a whopping 50% since then. Accumulating good stocks that pay good divies for the long term when prices are really beaten down is my real game. This strategy has worked quite well for me over the years and still funds my current retirement.


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## kincella (6 June 2009)

this sounds like a 'must have'  for some of you to consider in the future 

GPS shoes for Alzheimer's patientsJune 6, 2009 - 9:50AM 
A shoe-maker and a technology company are teaming up to develop footwear with a built-in GPS device that could help track down "wandering" seniors suffering from Alzheimer's Disease.

"The technology will provide the location of the individual wearing the shoes within 30 feet, anywhere on the planet," said Andrew Carle, an assistant professor at George Mason University who served as an advisor on the project.

"Sixty percent of individuals afflicted with Alzheimer's Disease will be involved in a 'critical wandering incident' at least once during the progression of the disease -- many more than once," he said Friday.

The shoes are being developed by GTX Corp., which makes miniaturized 
Global Positioning Satellite tracking and location-transmitting technology, and Aetrex Worldwide, a footwear manufacturer.

Carle said embedding a GPS device in a shoe was important because Alzheimer's victims tend to remove unfamiliar objects placed on them but getting dressed is one of the last types of memory they retain.
ps thank goodness for that.... 

He said a "geo-fence" could be placed around a person's home and a "Google Map" alert sent to a mobile phone, home or office computer when a programmed boundary is crossed.

"The shoe we intend on developing with Aetrex should help authorized family members, friends, or caretakers reduce their stress and anguish by enabling them to locate their loved ones instantly with the click of a mouse," said Chris Walsh, chief operating officer of GTX Corp.

The companies said they plan to begin testing the product by the fourth quarter of the year.


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## Ferret (6 June 2009)

A lot has been said about protecting your capital and I wouldn't argue that that its not worthwhile to sacrifice some yield to maintain capital.  But achieving the most out of a capital protection/growth strategy requires greater skill and time than many of us have.

I think what Bill is saying is that he doesn't have the skill to time movements in and out of stocks, so he is willing to chase a little more yield and loose a little on long term capital gain.  

That's my thinking too.  I've held my portfolio right through this current mess because, having sold shares before only to see them higher a little later on, I realise I'm not good at judging what the market is going to do.  I certainly didn't expect the market to drop 50%, so at 20%, 30%, 40% & 50% I just held on not wanting to sell out at the bottom.

The other thing is that I don't have the time or inclination to be constantly checking on the performance of my individual stocks.  I like to be invested in stocks that don't need constantall  watching.  I keep a few stocks in the portfolio that are aimed at capital growth, and those are the ones I keep a closer watch on.  I don't get the total returns of some others, but I'm happy with what I get for the time and skill I put in.

For what its worth, the main stocks in my portfolio are:
AFI 23%
WPL 10%
NAB 8%
BHP 8%
SLX 7%
AWE 7%
WOW 4%
TLS 4%

Surprised LICs haven't had a mention in this thread yet.  I think they are a great investment for retirees or anyone willing to sit it out for the long term.


----------



## Julia (6 June 2009)

Bill M said:


> I know from other posts that you got out of the market at pretty much the top, that is truly an outstanding effort, well done.



Hi Bill, No my timing wasn't that good at all.  I didn't sell until beginning of 2008 (peak of market was November) so gave back some profits by January.
I could still have been wrong and the loss to that date could have been reversed in a further upswing.

But I guess we all make what we consider are the best decisions at the time.
In the past I have watched a stock fall in the hope (yes, hope!) that it would reverse, and lost money.

I don't want to have to work again.  I've established a level of capital where even if interest rates fall further I can still live on the interest.
If I'd let that invested capital fall 50% that wouldn't have been the case and I simply didn't have complete confidence dividends would not be cut anyway.
Many of my stocks were bought for growth rather than yield.
I would have been very unhappy to have watched my p/f lose 50%.



> Were you equally as astute to get back in when the market hit 3111 when it was down some 55%?



No.   When I reinvested the capital I did so in the knowledge that I would almost certainly miss the bottom.  Well, that is if we have indeed seen the bottom.  Again I'm not necessarily sure that's the case.

I've bought three stocks so far and am content to sit aside from anything else for now.



> Unfortunately I am neither good at picking tops or bottoms so tend to buy when stocks are beaten down, I managed to slip in a small buy on March 9th but that was just pure luck. Since hitting that low point the market has already jumped 30%. CBA hit $24 2 Months ago, it has jumped a whopping 50% since then. Accumulating good stocks that pay good divies for the long term when prices are really beaten down is my real game. This strategy has worked quite well for me over the years and still funds my current retirement.



And that makes a lot of sense.   
So it sounds as though you always have cash reserves with which to buy the beaten down bargains?


----------



## Bill M (6 June 2009)

Ferret said:


> Surprised LICs haven't had a mention in this thread yet.  I think they are a great investment for retirees or anyone willing to sit it out for the long term.



Hello Ferret, I watch AFI, ARG and MLT quite often but I have a slight problem with them. Their basket of shares are calculated only once a Month, usually at the end of the Month. From that point you got to make rough calculations yourself to try value the stock. Most of the time these 3 are trading at a premium, people are willing to pay more for the stock than it's NTA. That is why I haven't taken on a LIC, they nearly always trade at a premium so you are actually paying more than what it's worth. In the case of an index fund, they are valued everyday, you know exactly what the basket is worth. STW for example gives a daily fund update to the market.

LIC's seem ok, I am very keen on them but right now I am building up my 2 index funds. I don't like throwing too much capital towards one fund manager or stock so eventually I might end up investing in a LIC anyway. Out of the 3 mentioned I like MILTON (MLT) and monitor all 3.



Julia said:


> > I don't want to have to work again.  I've established a level of capital where even if interest rates fall further I can still live on the interest.
> 
> 
> 
> ...


----------



## Muschu (6 June 2009)

Julia said:


> I don't want to have to work again.  I've established a level of capital where even if interest rates fall further I can still live on the interest....
> 
> I've bought three stocks so far and am content to sit aside from anything else for now.




Seems a pretty sound strategy to me Julia.  And the comments made by others also make sense.  I guess it is a case of each of us finding the best balance for our circumstances. We'd struggle to cope on bank interest alone - but that will go up in time, unless history decides never to repeat itself. 

Rick


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## Julia (6 June 2009)

Just want to say how good it is that we can have different approaches, discuss the advantages and disadvantages of these with one another, and do it in an atmosphere of respect for different points of view.

Thanks, fellas.  Much appreciated.


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## brianwh (7 June 2009)

Have enjoyed reading your posts and relate very much a number of them - I could almost have written your post myself Ferret except for a few different stocks and I hold all 3 LIC's mentioned by Bill

Here's an issue that I'm guessing applies to many who have posted on this thread.

When you are considering investing in a stock you are like to do considerable homework and spend considerable time trying to get it at a good price based on the parameters you set. For example I don't currently hold a stock in the Health sector and am trying to buy SHL. But if I have a stock which is not performing, I tend to avoid thinking too much about it - just leave it in the "too hard basket". In my case I hold IAG which may be an example.

Maybe this doesn't matter much? Thoughts?


----------



## nathanblack (7 June 2009)

if you read articles about the average return of the share market, they often have a comparison with the average return of an investor. an investors return over time is usually considerable less than the overall market. obviously one reason is because your portfolio doesnt track the SP50/200 and doesnt have exposure to all areas that may average out the gain.

but the primary reason for descrepancy is timing and time in the market. people by nature tend to buy in a rising market(influenced by media and confidence). some people sell out way too early, missing further gains. others hold, then panic as the market falls. basically buying high and selling low.

time is your friend. but perform regular assessment of your portfolio, is the reason you originally bought the stock still valid? is your money better off elsewhere(oportunity/risk).

its similar to averaging down, if used correct i like the idea myself. but you need to review the reason for the fall, is it stock specific or general bear market. 

eg. averaging down on babcock and brown. by the time it went into administratiion your average price was low but you still lost everything; OR

RIO. if you averaged down from $100+ to $30+, you would maybe have an average of $50 and be in profit now, BUT how much money did it consume? how overweight in RIO is your portfolio now? were your pockets deep enough?

in summary, eveluate underperformers, if the reason you bought them still applies perhaps use averaging down to your advantage. if the fundamentals has changed consider selling and finding an alternate investment.


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## Trevor_S (7 June 2009)

Julia said:


> Anyone else?  We can all learn from this sort of exchange of views.




I am semi retired, at 42, I sold 1/2 my business last year, the other 1/2 runs with about 5 hours a week input from me (on a busy week, 10 hours) I will sell the other 1/2 when I get around to it.  I love the outdoors, (and why I want to move to Tas. or NZ) so I am often hiking, mountain biking,  snorkelling and about to buy a sea kayak, so I understand not wanting to be consumed by investments.

I have been scrip since 1989 or there abouts.

If I was to hold a top 5 now, it would be:

WBC - I am well over weight WBC but mainly because I was a big fan of the CEO before Kelly, she makes me nervous and I have stopped buying WBC.

ANZ - because they are the biggest risk taker, expansion into Asia etc.  I agree with the risks, eg Asia expansion so I am happy to hopefully ride on their hope tails.

I don't like NAB, those bastards simply lumbered from one **** up to another for years. ie fourex trader scandals, homeside mortgage debacle etc, they have suffered for it, going from the pre-eminent bank in Aus to an also ran, it's the only big 4 bank I don't own.

WES - for the reasons espoused by Bill

BHP- diversified miner with oil gas (why I preferred them over RIO from the get go)

WPL- oil 'n gas, though I wax and wane on these guys, they don't really meet my criteria on payout ratios etc


Others I like (and hold) are WDC, (for many the same reason as Bill), ASX,  CBA, WOW & ARG.

Shares I have been buying since December include LEI (though there debt level is a worry), GPT (at 31c and then the rights at 35c), BHP (in large amounts below $28), WES rights and STW.

I haven't bought any banks for some time (I know Bill has) but I think they hold a little too much risk to accumulate, I just hold)

I trust nothing except dividend payouts, the rest of it is suspect.

As to the OP, maybe something like STW might be of interest ? as you get Index exposure and no need to re weight your portfolio from time to time 

Some I look at and scratch my head are eg CSL (PE of nearly 30 ! not for me) though other are obviously big fans and I have a moral objection to gambling, so I don't invest there.

As to dividends, many scoff at them, to me they are why I invest: 



> “Earnings are only a means to an end, and the means should not be mistaken for the end. *Therefore we must say that a stock derives its value from its dividends, not its earnings*. In short, a stock is only worth what you can get out of it."



 John Burr Williams' - The Theory of Investment Value

I don't have an SMSF as there is only a few $100K in it, my shares are held/managed outside.

70% of my portfolio (outside of my business's) is in cash.

My goals are probably different to most though.  I live quite frugally and hope to have amassed enough of a investment portfolio that I can pass it to a trustee when I die and have it managed , using the income to grow the portfolio at CPI and divest the rest of the income to worthwhile charities.


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## Muschu (7 June 2009)

Is there any merit in extending this "conversation" into sharing thoughts on stocks that may be worthy of a longer term hold for retirees who wish to be in the market?  [Given that "holding", for me anyway, is now a more _flexible_ term -- in that some level of ongoing review is required]. My point in suggesting this sharing is that someone may suggest stocks that others of us may care to look into.   
Three months ago I had only one stock so all bar one of these have been entered since March.  Most of them I had back in 2008 and have bought back in at lower prices than I previously paid.

Present holds [none speculative in my view but then nothing comes with a definite guarantee does it...?]

BHP
WPL
QBE [will probably let go]
AXA [almost certain to let go]
TLS [as with AXA - not happy but not losing - yet - probably on its way soon]
SUN
IVC
WOW
WES
WBC
CBA
NVT  [I disclose a family association here but definitely no inappropriate    knowledge (most of my career has been in the education field)].
STW
GOLD

I also had, but sold, BKL and AGK - and now [hindsight is wonderful] feel I would have been better off to have kept them.

Rick


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## badger41 (7 June 2009)

Interesting thread, and a lot of posters seem to have similar ideas to mine.

I have been seriously investing since retiring in 1995, and like others above, basically rely on dividends for income, although after the market collapse of late 2008, I did find I was entitled to a small (repeat small), age pension.

A lot of stocks I purchased back in 1995 I still hold (CSL at an adjusted for split price of $1.17 worked out okay - now $28.98).

My top 10 holdings are 

BHP (13% of portfolio - held since 1995, but early purchases since sold, and current holdings start at 2003, average ingoing price $12.48, current $38.18.

CSL, since 1995, average ingoing $2.80, now $28.98. Pity no Swine Flu vaccine as yet, I'm currently in house quarantine pending test results - that'll teach me to visit Melbourne!

STO. Held since 1995. Av. cost $6.42. Now $15. Have just taken up rights entitlement, so it will be around 9% of total portfolio. I also hold ORG (at profit), and AWE (small loss). I rather like oil producers for the long term.

WES. Since 1995. Av cost $9.15, now $22.16. Participated in recent issue, and added some on top @12.50.

LEI. A bit nervous about this one. First purchased 2000, now averaging $6.73 cost, current price $24.57. Have they bitten off more than is chewable?

WPL. Another oiler owned since 2000. Av cost $4.00, now $42.62

WBC. Got these via Advance Bank, then St George takeovers. Cost $6.43, now $19.23. I also have smaller holdings in NAB and ANZ - unlikely to add in the current bad debt climate.

WOW. Bought 2006 @ $23.02. Now $26.30. Defensive food/booze/pokies (pity about the pokies).

ASB. Our WA ferry builder. Almost worth holding for the great pictures in the annual report. Cost $1.30 (2004), now $2.54..

There are a few other smaller holdings (even some OZL - how could I?).

Reading the above, it does make a bit of a nonsense of Marcus Padley's "buy-and-hold is dead", and "trade, trade, trade" sermons

Incidentally, all holdings direct, outside Super. I came to the conclusion in March 2008 that being charged $2.5K a year to manage a small ($140K) super portfolio, which was falling rapidly in value, was a dog of an idea. 

I loved the idea that I could take out every cent, tax free (thanks P. Costello), would no longer be subject to the legislative risk of future changes to the rules, and NO MORE FEES. At a rough guess, the $140K (which simply went into the bank, is now $150K. Doubt if it would be $100K if I'd left it untouched. Just love the feeling of not having my money controlled at the whim of the Government. And I no longer have to read all the learned articles about superannuation that litter the financial press! 

Cheers, badger


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## brianwh (8 June 2009)

Muschu said:


> Is there any merit in extending this "conversation" into sharing thoughts on stocks that may be worthy of a longer term hold for retirees who wish to be in the market?  [Given that "holding", for me anyway, is now a more _flexible_ term -- in that some level of ongoing review is required]. My point in suggesting this sharing is that someone may suggest stocks that others of us may care to look into.





Rick - I for one would be very keen to see what others thought. Several posters have done this in the sense that they have listed their main holdings and added a comment. I found this very interesting.

A further question that I would be interested in hearing comments on relates to the proportion of stocks in the different sectors.


----------



## Muschu (8 June 2009)

brianwh said:


> Rick - I for one would be very keen to see what others thought. Several posters have done this in the sense that they have listed their main holdings and added a comment. I found this very interesting.
> 
> A further question that I would be interested in hearing comments on relates to the proportion of stocks in the different sectors.




Good thought Brian - I will do this for my own portfolio later today and post it to ASF.
Cheers
Rick


----------



## Julia (8 June 2009)

brianwh said:


> When you are considering investing in a stock you are like to do considerable homework and spend considerable time trying to get it at a good price based on the parameters you set. For example I don't currently hold a stock in the Health sector and am trying to buy SHL. But if I have a stock which is not performing, I tend to avoid thinking too much about it - just leave it in the "too hard basket". In my case I hold IAG which may be an example.
> 
> Maybe this doesn't matter much? Thoughts?



Doesn't this come down to what you think is the potential for that stock?
I don't know anything about IAG.  Just had a glance at a chart.  I've seen worse (and better).

I don't particularly subscribe to the necessity of holding across all sectors.
Some sectors perform well at one stage, and another at a different stage.
Would never buy a stock just to satisfy the 'diversification' philosophy.
Ditto being overweight something that's running up really well.  Will hold it until it starts to fall.

Same philosophy is what sent me to cash 18 months or so ago.  If the market in general goes down, then I'm out until it shows signs of definite recovery.

Any losing stocks are out.  Never hold on to dogs.






Muschu said:


> Is there any merit in extending this "conversation" into sharing thoughts on stocks that may be worthy of a longer term hold for retirees who wish to be in the market?  [Given that "holding", for me anyway, is now a more _flexible_ term -- in that some level of ongoing review is required]. My point in suggesting this sharing is that someone may suggest stocks that others of us may care to look into.
> Three months ago I had only one stock so all bar one of these have been entered since March.  Most of them I had back in 2008 and have bought back in at lower prices than I previously paid.



Well done, Rick.  And good idea to share considerations of suitable stocks as long as no one stuffs it up by ramping their pets.

Then Joe will get cross.





> Present holds [none speculative in my view but then nothing comes with a definite guarantee does it...?]
> 
> BHP
> WPL
> ...



I agree on these two.  I like your NVT.  I'd have held on to AGK and let SUN go, but if there's a decent take over offer on SUN then it could take off.

All I have bought back into are WBC, MND and WOR.
Like CPB and LEI but am nervous about both.


----------



## Muschu (8 June 2009)

brianwh said:


> .....A further question that I would be interested in hearing comments on relates to the proportion of stocks in the different sectors.




Hi Brian and others

Rough maths are that we are presently about 50% in cash and 50% in the market. 

An approximate proportioning of our holds is:

NVT 37%  [please see note in previous post]
BHP, STW, SUN, WBC, WOW all 7-8%
AXA, CBA, GOLD,IVC, QBE, TLS, WES, WPL all 2-5%.

Bear in mind that I sold out of the market [except NVT] and re-entered in March.  SUN has been my most profitable share [on a pro-rata basis] in that I have bought and sold at least 4 times at a good profit in that short period.

As mentioned above I may well shed AXA and QBE.  May also increase WPL, BHP and IVC.  May also get back into BKL.  

I consider mine a pretty conservative set-up.  I'm not expecting sudden growth from any of them and hope to avoid sudden losses....

I plan to study the stocks others have mentioned to see if I am missing something of value - MTS for example. 

Rick


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## makingmoney (9 June 2009)

Julia said:


> I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.
> 
> That anyone will happily accept a loss of capital as the SP falls just because they're getting around 7% or 8% in yield is beyond me.
> 
> Nathan has very well described the need for continuing growth shares in any portfolio, even retirees'.




I cant understand why people are not buying bank dividends even if they are roughly 25% down at the moment,Still the four banks are great shares in any portfolio..


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## Julia (9 June 2009)

Muschu said:


> SUN has been my most profitable share [on a pro-rata basis] in that I have bought and sold at least 4 times at a good profit in that short period.



Given the title of the thread, Rick, I assumed your posted stock holdings were long term.   On the contrary, it seems you are using SUN as a trading stock.

Are you similarly frequently trading your other stocks?

I regard long term hold stocks as quite different from those purely used for trading, so maybe if people are trading, as distinct from the title of the thread, might be good to make this clear.


----------



## Trevor_S (9 June 2009)

makingmoney said:


> I cant understand why people are not buying bank dividends even if they are roughly 25% down at the moment




Some people are of the opinion that banks are risky, particularly now.   As the commercial markets softens, and banks lower their LVRs, their exposure to the property market can tip them into trouble IF they suffer the double whammy of a fall in the residential property market, they will be in SERIOUS trouble.  Witness, UK, USA etc etc for evidence of that, having the Government nationalise them will save the depositors but not the shareholders. 

Not to say of course that it will happen but perceived risk seems different to many but unless your questions is rhetorical, that is one reason.


----------



## Julia (9 June 2009)

That's the reason I only have very small holding in WBC at present.   

I suspect the question was rhetorical, though.

Btw, Trevor, you beat me to retirement by two years!


----------



## Trevor_S (9 June 2009)

Julia said:


> I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.




I don't know anyone that buys purely for yield, I guess there might be some ... but ... yield plays a huge part in the buying decision for me, the only way I can price a share is with the dividend, earnings are often mostly bullsh_it 



Julia said:


> That anyone will happily accept a loss of capital as the SP falls just because they're getting around 7% or 8% in yield is beyond me.




Why sell, ? (unless you made a mistake with the buy, which happens)  unless you planned to do something else with the money, I have no idea what makes a better business then the stocks I already own, so what the hell else would I buy ?  I guess some subscribe that they sell at $40, watch the share tank (feel justified) and then buy again on the trend up, at say $38 2 years later after holding as cash for example.... but that doesn't make any sense to me (after tax I am betting there holding is less but they feel richer).  I guess there may be people in the world that can trade successfully over several decades, I am just not one of them, I recognise that and use my other strengths, identifying good companies with reasonable dividend yields and buying them in times when they are down eg my biggest buys in the last 10 years where the world trade centre attack, the Iraq invasion and since Dec. last year



Julia said:


> Nathan has very well described the need for continuing growth shares in any portfolio, even retirees'.




Indeed, my dividends grow my portfolio I have never used them to do anything else (accumulate dividends as cash, research as the market grows to levels I feel uncomfortable with and buy when the prices retreat) but then I plan my portfolio to hopefully long survive me and I live a fairly frugal life.  My dividend stream is more then the wage I pay myself from my business.



Julia said:


> That's the reason I only have very small holding in WBC at present.




I hold a fair bit of WBC but that's from decades of buying.  I was a huge fan until Gail's arrival.  A agree with ROE on this, I think Gail Kelly is not the right person for the job. I just hope WBC is bigger then Gail Kelly.  I have not sold any bank shares but have not bought any either.


----------



## Muschu (10 June 2009)

Julia said:


> Given the title of the thread, Rick, I assumed your posted stock holdings were long term.   On the contrary, it seems you are using SUN as a trading stock.
> 
> Are you similarly frequently trading your other stocks?
> 
> I regard long term hold stocks as quite different from those purely used for trading, so maybe if people are trading, as distinct from the title of the thread, might be good to make this clear.




Julia I made a recent comment above that the thread title may no longer be appropriate.  I am prepared to decrease, increase or sell out [won't hold anything that turns into a "dog" for example] of a stock if there is underlying info that points towards such a strategy.
I'll also sell the lot if a clear downtrend emerges - but probably re-enter the same stocks [or most of the same] when they turn again. ie:  I am not saying I will buy and hold forever.  Maybe _flexible_ fits. Circumstances can alter intentions.
However - SUN is the only one of these stocks that I have entered - left [sold the lot] - and reentered regularly  [although I have done something simliar with small parcels of NVT - and have since the float] ----However my current intention, on today's data, is to hold SUN for a longer term.  I simply took what I thought were profit opportunities when I saw them.  I actually haven't been SUNless for more than a few days since March.
So SUN still shines.


----------



## Uncle Barry (10 June 2009)

Good morning,
This is to me just about the most interesting read on ASF, ever.

And I now ask, why retire ?

Because if your looking to retire, it would suggest you are working or doing something you don't enjoy.

'This' is my income producer and has been for sometime and I pray I will never retire.
As I love every minute of the adventure and the never ending learning.
From this background, I feel kind of sorry, in the nicest way, for those souls that are looking to escape, retire. 

I don't hold retirement stocks, I hold long term stocks.
I hold a number of stocks in my long term 'bag'.
These include NAB, first bought for ...cannot rember, honestly, held for over 20years, with a top up at every chance, including.
STO @ 3.07 or 4,, cannot remember...... and now, today the percentage div, on my 3.07 is fantastic, as are the other long term stocks.

And the Franking Credits, which really help at tax time.

And a few others 

Kindest regards,
UB


----------



## Muschu (10 June 2009)

Uncle Barry said:


> Good morning,
> ...And I now ask, why retire ?...UB




No thoughts on retiring from life UB - onless I get _taken out_. Too much to learn, enjoy and, hopefully, contribute.  But I don't want the market or my PC to rule my day....


----------



## Uncle Barry (10 June 2009)

Good morning Rick,
"don't want the market or my PC to rule my day....'

It, the Market, doesn't rule my day, its just a great part of my day that I look forward to, each and every day.

Kind regards,
UB


----------



## Julia (10 June 2009)

Trevor_S said:


> I don't know anyone that buys purely for yield, I guess there might be some ... but ... yield plays a huge part in the buying decision for me, the only way I can price a share is with the dividend, earnings are often mostly bullsh_it



Perhaps I should have added in my original comment "can't understand why anyone will buy a share for yield and hold when the SP enters a sustained downtrend ."
 I thought the last phrase would be implicit, but perhaps it wasn't.





> Why sell, ? (unless you made a mistake with the buy, which happens)  unless you planned to do something else with the money, I have no idea what makes a better business then the stocks I already own, so what the hell else would I buy ?



OK, you have one view.  I have another.  I'm not talking about selling when a stock has a pullback.  I'm talking about a downtrend such as we have seen since November 2007.  If a stock falls 50%, I would rather sell as near the top as I can, sit out in cash until there is some sign of recovery, then be able to buy twice as many shares when I get back in.

This appears to be along the lines of what Rick has been doing.

Then not only do you have more shares to enjoy the coming growth, you get more dividend/franking income.



> I guess some subscribe that they sell at $40, watch the share tank (feel justified) and then buy again on the trend up, at say $38 2 years later after holding as cash for example.... but that doesn't make any sense to me (after tax I am betting there holding is less but they feel richer).



Perhaps you're using a pretty silly example to make your point?   Quite obviously to have a differential of only $2 after staying out for two years would be pretty pointless!




> I guess there may be people in the world that can trade successfully over several decades, I am just not one of them, I recognise that and use my other strengths, identifying good companies with reasonable dividend yields and buying them in times when they are down eg my biggest buys in the last 10 years where the world trade centre attack, the Iraq invasion and since Dec. last year



OK, fine.   But can you see my point above?






> Indeed, my dividends grow my portfolio I have never used them to do anything else (accumulate dividends as cash, research as the market grows to levels I feel uncomfortable with and buy when the prices retreat) but then I plan my portfolio to hopefully long survive me and I live a fairly frugal life.  My dividend stream is more then the wage I pay myself from my business.



Your situation is different from mine, isn't it.  I don't have a business or any other source of income (other than very small annuity) than my capital base.
Hence my determination to (a) protect the capital, and (b) grow it when that's possible.


----------



## awg (10 June 2009)

nunthewiser said:


> i cant believe no one has mentioned MTS
> 
> worth a read for all you warchest holders
> 
> ...





I recently replied, but my answer is gone?

did i get moderated??

Just to check, I will say the same thing again.
***********************************************

glad you mentioned Metcash, 

i recently added a  chunk, as they are safer than the Banks or Telsta, and pay more Div than WOW, has gone up a few % since, with room for more..goes ex-div soon.

fully franked MTS pays 8.25% 

Also added RIO at $43, and have topped up BHP at below present prices.

I hold some stocks long-term, but the only one I have never traded is WOW.

Fully franked div are good for me, as I pay low tax, but Capital gains are just as good.

hold 20 stocks atm,

added FMG at open today


----------



## Julia (10 June 2009)

Muschu said:


> Julia I made a recent comment above that the thread title may no longer be appropriate.  I am prepared to decrease, increase or sell out [won't hold anything that turns into a "dog" for example] of a stock if there is underlying info that points towards such a strategy.
> I'll also sell the lot if a clear downtrend emerges - but probably re-enter the same stocks [or most of the same] when they turn again. ie:  I am not saying I will buy and hold forever.  Maybe _flexible_ fits. Circumstances can alter intentions.
> However - SUN is the only one of these stocks that I have entered - left [sold the lot] - and reentered regularly  [although I have done something simliar with small parcels of NVT - and have since the float] ----However my current intention, on today's data, is to hold SUN for a longer term.  I simply took what I thought were profit opportunities when I saw them.  I actually haven't been SUNless for more than a few days since March.
> So SUN still shines.



Thanks for explanation, Rick.  You've certainly changed how you do things!
Can you say what the attraction is with SUN?




Uncle Barry said:


> Good morning,
> This is to me just about the most interesting read on ASF, ever.
> 
> And I now ask, why retire ?
> ...






,
[/QUOTE]



Uncle Barry said:


> Good morning Rick,
> "don't want the market or my PC to rule my day....'
> 
> It, the Market, doesn't rule my day, its just a great part of my day that I look forward to, each and every day.
> ...



UB, that's a really good and novel way of looking at withdrawing from the workforce.  Sums up how I feel too.  Thanks for such a bright suggestion.





awg said:


> glad you mentioned Metcash,
> 
> i recently added a  chunk, as they are safer than the Banks or Telsta, and pay more Div than WOW, has gone up a few % since, with room for more..goes ex-div soon.



Hi awg, that's a good point about the dividend versus WOW.
But just looking at a three year chart of both of these, from $18 ish three years ago, WOW went to around $34, a 90% gain, before falling with the market in the general downturn.

This compares with a gain over a similar period with MTS of around 40%.

Would the dividend difference over that period have made up for the lower capital gain?


----------



## Bill M (10 June 2009)

nunthewiser said:


> i cant believe no one has mentioned MTS
> 
> worth a read for all you warchest holders
> 
> ...




Thanks for the lead, I can't believe I haven't looked at it yet.



awg said:


> fully franked MTS pays 8.25%



I think that is the grossed up yield, the fully franked yield is about 5.6% according to news.com.au. Still not bad though.

Edit: It is going ex dividend on 19 June with a 14c payment to come, I will be keeping an eye on this one.


----------



## Uncle Barry (10 June 2009)

Good evening Julia.
Some mistake ?
"UB, that's a really good and novel way of looking at withdrawing from the workforce"

I have no plans at withdrawing from the workforce, now or in the future as far as I know.

I enjoy what I do, this is fun, like a sport or hobby that never ends, with a new adventure every day, well for 5 out of 7, so why stop?

Thats why I kind of feel sorry for some people, as they are still looking, exploring or thinking for something, they haven't found yet, the something being what they will do in the future.

Guess a lot of people will never understand my thinking 

Kindest regards,
UB


----------



## awg (10 June 2009)

Bill M said:


> Thanks for the lead, I can't believe I haven't looked at it yet.
> 
> 
> I think that is the grossed up yield, the fully franked yield is about 5.6% according to news.com.au. Still not bad though.
> ...





yes, the 8.25% includes the franking credit, and as I pay no tax in pension, that is my return.



Julia said:


> Hi awg, that's a good point about the dividend versus WOW.
> But just looking at a three year chart of both of these, from $18 ish three years ago, WOW went to around $34, a 90% gain, before falling with the market in the general downturn.
> 
> This compares with a gain over a similar period with MTS of around 40%.
> ...





Hi Julia, that is why I have held WOW very long term, and never sold.

Also why I have now added MTS, as I believe they have a strong prospect of growth, apart from the div



awg said:


> added FMG at open today


----------



## nulla nulla (10 June 2009)

badger41 said:


> Interesting thread, and a lot of posters seem to have similar ideas to mine.
> 
> I have been seriously investing since retiring in 1995, and like others above, basically rely on dividends for income, although after the market collapse of late 2008, I did find I was entitled to a small (repeat small), age pension.
> 
> ...





For a moment I thought you meant your whole portfolio was $140k, then i realised you meant this was the component tied up in your super account with the balance outside your super fund. 
Way to go. With the statutory costs, Accountants fees etc even self managed super funds are hard to justify against the merits of building up an investment portfolio outside of super.


----------



## Muschu (10 June 2009)

Uncle Barry said:


> Good morning Rick,
> "don't want the market or my PC to rule my day....'
> 
> It, the Market, doesn't rule my day, its just a great part of my day that I look forward to, each and every day.
> ...




Sorry UB -- I didn't have your day in any corner of my mind.  Sincere apologies if you thought there may have been some oblique reference to you.  
The market has taken too much of my own day -- so it was strictly a personal reference.

Best wishes

Rick


----------



## Uncle Barry (10 June 2009)

Good evening Rick,
Not a problem.
I did not take your comment personally, just thought it was a general kind of statement.  

Kind regards,
UB


----------



## vincent191 (10 June 2009)

nulla nulla

Have you consider transferring your shares to your DIY superfund? There is a big tax advantage. Don't forget holding shares in your own name can attract capital gains tax. The tax rate for Superfunds much less.

Do think about selling any shares that are currently making a loss or breaking even to your Superfund. This will work if you intend to hold those shares with a longer term in mind and you are confident that they will come good one day. A lot of REIT units/shares will come under this category.

As always if your headache persist consult your accountant.


----------



## Muschu (10 June 2009)

Julia said:


> Thanks for explanation, Rick.  You've certainly changed how you do things!
> Can you say what the attraction is with SUN?....





Hi Julia

Yes I have made changes  thanks to you and others. That doesn't mean I have entered a perfect investing world by any means..... I remain a definite novice.

SUN appealed to me largely on fundamental grounds, although I have great respect also for TA and the early March chart was _pretty good_ [that's technical talk....] in my opinion.


It is also an ASX50 stock, almost in the ASX20.  The dividend is 100% franked and the SP, in my layman's view, had dropped well below fair value - even given the market plunge.

As I said somewhere above [or I think I did] I entered SUN with no guarantee but perhaps with enough indicators for me to consider it a reasonable venture.  Then I noted each time the SP went down it seemed to recover.  So far I have done OK in just following the swings.  There's been some luck in there I acknowledge.  But I figure there's no way of ever reducing the risk factor to zero.

Hope that helps.

Regards

R


----------



## Julia (10 June 2009)

Uncle Barry said:


> Good evening Julia.
> Some mistake ?
> "UB, that's a really good and novel way of looking at withdrawing from the workforce"
> 
> ...



Uncle Barry,  sorry for making an assumption on the basis of the thread title that you were out of the work force.

I still like the idea, though, for those of us who have chosen to stop working.


----------



## Julia (10 June 2009)

awg said:


> Hi Julia, that is why I have held WOW very long term, and never sold.
> 
> Also why I have now added MTS, as I believe they have a strong prospect of growth, apart from the div



OK, goodonya, awg.   When I sold all my stocks, in retrospect I probably should have held on to WOW because it didn't fall too badly.  Reinforces the theory of basic defensive stocks.


----------



## Calliope (11 June 2009)

This from the Intelligent Investor. You will notice they have avoided banks and resources. Being retired, I confine myself to stocks that pass the "sleep test", with an occasional punt on a roughie to take the boredom out of it.



> Blue chips for your consideration
> Stock (ASX code)	Weight	Sector	Reco.	Trailing div.
> yield (12-mth)
> Westfield (WDC)	8%	Property	LT Buy	9.4%*
> ...


----------



## Julia (21 June 2009)

CPB, Campbell Bros Ltd., SP has almost doubled in last three months.
Dividend of 4.7%.

Ditto OKN, Oakton Ltd., more than doubled.  Dividend of 7%.


----------



## Muschu (21 June 2009)

Julia said:


> CPB, Campbell Bros Ltd., SP has almost doubled in last three months.
> Dividend of 4.7%.
> 
> Ditto OKN, Oakton Ltd., more than doubled.  Dividend of 7%.




Interesting finds Julia - both worth a good look.  Thanks.


----------



## rhen (22 June 2009)

Julia said:


> CPB, Campbell Bros Ltd., SP has almost doubled in last three months.
> Dividend of 4.7%.
> 
> Ditto OKN, Oakton Ltd., more than doubled.  Dividend of 7%.




I'm a long (long) term holder of CPB...actually worked a year for them...plus a grandfather who was their chief soapmaker most of his working life. They have moved on from those days...


----------



## Muschu (22 June 2009)

rhen said:


> I'm a long (long) term holder of CPB...actually worked a year for them...plus a grandfather who was their chief soapmaker most of his working life. They have moved on from those days...




Got time to interpet that chart for us please rhen?
Thanks
R


----------



## Trevor_S (22 June 2009)

badger41 said:


> Reading the above, it does make a bit of a nonsense of Marcus Padley's "buy-and-hold is dead", and "trade, trade, trade" sermons




Marcus is a stock broker, his money is made selling stocks, I guess make of that what you will.  As a "trader" (exchanging bits of paper with other people in the hope  they will pay more for it) I can see why averaging down doesn't work for him, it would and could be financial doom.  For me, if I have identified a business, paid $12 for it, the market corrects and it's selling for $8, I will snap it up if the fundamentals haven't changed and I have spare cash not curse that it's gone down but think great, more opportunity.  That aside, I think like many commentators, that's what they do, commentate.  

A buy & hold strategy is seen as staid, slow and boring and not very exciting. I like to keep my money so these concepts appeal, I have seen dozens of traders "acquaintances" fall by they way over the decades, all espousing their strategys as the best way forward, I see the same arguments they made put forward by many in here and assume those same mistakes will be repeated, if history shows us anything it's that most peopel don't learn from it .  

My time is spent identifying companies that are decent to invest in, accumulating cash in times of exuberance and then waiting for weakness in the market before buying but of course I get it wrong very occasionally.   My portfolio is small by comparison to most others (seven figures) but my lifestyle is relatively frugal, so my expenditure is not that great.  That said, I just ordered a new kevlar sea kayak  and have been sucked into upgrading my Ute due to the Governments 50% rebate for small business, (that I qualify for this year but would not have last year, serendipity ?) but then my kayak costs about the same as 3 tyres on a BMW X5 

It is very interesting to read and to see people investing in stocks I would never touch (eg CSL) , I like having my reasoning questioned, interest piqued and maybe go off and reassess.

I have poured more money into this period of weakness (Dec - Mar) then any other "buying spree" I have gone on (I basically stopped buying in March aside from rights) so either I will look back upon this as a "wise" time to buy or I will be regarded as a bigger fool by my partner   I do still have reasonable cash reserves though in case further opportunity presents. 

Thanks to everyone posting, great reading


----------



## Uncle Barry (22 June 2009)

Good morning,
Julia, 
"sorry for making an assumption on the basis of the thread title that you were out of the work force"

I am out of the so called 'work force' and have been for years,
what most people think as the 'work force',

However if your idea of 'work force' is making a dollar or three, Monday to Friday, then I am still in that 'work force'.

However no one forces me to work, I just enjoy the excitment, adverture and the never ending learning curve of the Market and it's ways.

AND cannot see any reason to stop.
As its not about money, its ALL about enjoyment to me 
(I bet this statement will confuse a few  )

Kindest regards,
UB


----------



## Trevor_S (22 June 2009)

vincent191 said:


> Don't forget holding shares in your own name can attract capital gains tax.




Can I ask how ?  I have only ever been taxed CG upon sale, not holding ?


----------



## Julia (22 June 2009)

Muschu said:


> Got time to interpet that chart for us please rhen?
> Thanks
> R



Hello Rick, I held CPB and OKN until the downturn, sold them to protect profits, and have now bought back in.

I'm sure it's possible to make all sorts of fancy interpretation of the CPB chart but all I take much notice of is how it demonstrates the sharp fall from the peak in November 08, and a strong return of uptrend now.


----------



## rhen (22 June 2009)

Muschu said:


> Got time to interpet that chart for us please rhen?
> Thanks
> R



Thanks Rick for your interest.
I have just returned home from work. 
Firstly, rereading what I wrote early this morning, I had a chuckle...the grandfather I refer to was/is mine not me (though ...)
My charts are relatively simple and so are their interpretation.
I copy this from the CFU site:
_I'll put my charts up with the understanding:
1. On the charts the 1 is a first stage (for me) buy and the 3 is a warning of a buy on the horizon. The 2 and 4 turn off the buy call...they are not a sell.
2. These are my programmed indicators so I treat them as such, as reason to watch for other signs that the share is ready to rise.
3. My second stage analysis is necessary before I decide to buy. My indicators have been reasonably accurate...just wish I could follow more, or have fewer to follow. They are not infallible (goes w/o saying).
_
regards
rhen


----------



## Muschu (22 June 2009)

rhen said:


> .........My charts are relatively simple and so are their interpretation....................
> 
> rhen




Simple but interesting.  Thanks rhen.


----------



## Muschu (22 June 2009)

Julia said:


> Hello Rick, I held CPB and OKN until the downturn, sold them to protect profits, and have now bought back in.
> 
> I'm sure it's possible to make all sorts of fancy interpretation of the CPB chart but all I take much notice of is how it demonstrates the sharp fall from the peak in November 08, and a strong return of uptrend now.




Always good to see a nice uptrend Julia.


----------



## Julia (23 June 2009)

rhen said:


> Thanks Rick for your interest.
> I have just returned home from work.
> Firstly, rereading what I wrote early this morning, I had a chuckle...the grandfather I refer to was/is mine not me (though ...)
> My charts are relatively simple and so are their interpretation.
> ...




Rhen, thanks for your comments.  So in that whole chart you don't see any reason to sell?


----------



## Muschu (25 September 2009)

Hi

I'm ignoring the "5" and the "long term" components of thread title because, as mentioned above, times have certainly changed and [in my case at least] I no longer have a buy and hold approach. [Although I'd like to for the sake of ease...]

However I thought other retirees may be interested in sharing their current approaches and some of the stocks they hold.

In our case we have gone from having only 1 hold back in March to now having over 30 -- seeking diversity and looking where the opportunites seem to be.  However some of these 30 are tiny holds.  We have crept back into the market since March and our SF is presently about 20% cash and 80% in the market.

The larger holds [in order of portfolio value] are presently:
NVT [please see comments in earler posts]
SUN
WBC
WPL
BHP
IVC
CBA
LYL
CNX
WOW
WES
DJS
JBH
SMX
SAI

Obviously in the rally all of these have been pretty OK.  Dividends have not rules my decisions but are factored in.

I'd be interested in what other "mature investors" are up to these days.

Best wishes

Rick


----------



## nioka (25 September 2009)

CER, CNP,VPG,LYC, BUL,


----------



## Muschu (25 September 2009)

nioka said:


> CER, CNP,VPG,LYC, BUL,




Thanks Nioka - will have a good look at these.  The smiles suggest you are pleased...


----------



## Sean K (25 September 2009)

nioka said:


> CER, CNP,VPG,LYC, BUL,



The smiles mean he's ramping.

Long term stock for retirees? LOL


----------



## brianwh (27 September 2009)

Hi Rick - is this list the equities component of your SMSF? In my own case I have approx 40% of my SMSF in equities with the major holdings:

LIC's: AFI ARG MLT (1/3)

Direct Shares: ASX LEI ORG QBE SHL TAH TLS TOL WES WPL plus small holdings in NHC and TFC

As you can see - no banks (except in LIC's) which is thanks to taking advice from Intelligent Investor! and no property.

The questions exercising my mind at the moment:

1. I have been waiting for a pull-back in the banks which to this point in time has been a bad decision (nearly as bad as listening to Intelligent Investor!!) - should I resign myself to buying at market highs or accept a portfolio without them.
2. I am comfortable at the moment without property but there are signs that this sector is moving. What do others think?
3. I have an uneasy feeling about the market at the moment - should I lighten up on some stocks and get back into cash?

Would be very interested in the thoughts of others on these issues.


----------



## MrBurns (27 September 2009)

brianwh said:


> Hi Rick - is this list the equities component of your SMSF? In my own case I have approx 40% of my SMSF in equities with the major holdings:
> 
> LIC's: AFI ARG MLT (1/3)
> 
> ...




I don't subscribe to any of those any more since taking advice from Charlie Aitken in Alan Kohler's newsletter to sell Telstra, that little gem cost me $40,000......

Not big on shares but recently decided to buy the big 4 banks, didn't put a lot in but enough to make it interesting and I'll leave it there, I figured this way - 

The big 4 are a virtual monopoly, it may not always be rosy for them but they cant fail over time.

They are still down considerably on their highs so might as well get in now.

Also bought Fairfax on a punt that the removal of Ron Walker will give them a boost, I'm told by an insider though that it will be a long time before they go anywhere, another insider told me they would be finished in 5 years, they still rely too much on print.

And bought some BHP as once again I don't see them going under, I don't trust the Chinese Govt to always be there buying from them so didn't get too many.


----------



## whereu (27 September 2009)

I have shares in 37 companies listed on the ASX

The percentage holding based on 25/09/2009 closing prices are
MEO 11.8% 
BUL 7.11%
AQP 6.85%
LNG 5.77%
IPL 5.21%
BDG 5.21%

The rest fall below 5%.

Obviously some shares do better than others, but I am too new to the game to know what diversity in holdings really means. To old hands this probably sounds like an admission that profoundly displays my ignorance. What I don't yet understand is the extent to which the whole market moves in one direction or other in unison versus some moving against the trend.

Half of my top 6 are in the energy sector, so may be overexposed here. Please don't regard this as anything more than a disclosure of what I hold. Advice is neither intended nor implied.


----------



## So_Cynical (27 September 2009)

whereu said:


> I have shares in 37 companies listed on the ASX
> 
> The percentage holding based on 25/09/2009 closing prices are
> MEO 11.8%
> ...




So your not to keen on dividends? or not gona hold longer term? seems a strange bunch of stocks to hold as the top end of your portfolio.


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## awg (27 September 2009)

whereu said:


> I have shares in 37 companies listed on the ASX
> 
> The percentage holding based on 25/09/2009 closing prices are
> MEO 11.8%
> ...






So_Cynical said:


> So your not to keen on dividends? or not gona hold longer term? seems a strange bunch of stocks to hold as the top end of your portfolio.





Depends, So-cynical..most of the stocks shown are up over 100% recently.

that can send them to the top overnight in a diversified portfolio.

At one point BEPPA was my No1 holding when it went up 250%.( sold it after a bad ann, and missed most of the profits)

My present top 12 are (held in SMSF) 

CBA, BHP, STW, FLX, MTS, MCW, WOW, RIO, GXY, NCM, ANZ, CNX

cash 30% 

I completely re-stuctured my holdings during GFC, selling all MINs and most stocks, and have been rebuilding my portfolio..some I sold and didnt re-buy am kicking myself, such as MQG.

hold about 20 others, under constant re-evaluation, many investors dont worry about dividends, including Warren Buffet, and much prefer ROE as being a better measure of investment potential. 

I am of this view, although I do prefer some dividend and high franking credit for most of my portfolio.

see a good article by Nick Radge ( in the day trade to be a Trader thread, I think)


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## nioka (27 September 2009)

kennas said:


> The smiles mean he's ramping.
> 
> Long term stock for retirees? LOL




Anyone holding these and buying at tha right time HAS to be smiling.Watch them go from here. Take CER and VPG. Without this GFC I would not have held these in numbers well over 1 million. This GFC has been the best thing since sliced bread as far as I.m concerned. Just need to trade a few each week and it is as good as any super fund can pay out.


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## nioka (27 September 2009)

Muschu said:


> Thanks Nioka - will have a good look at these.  The smiles suggest you are pleased...




Careful now, With some you may have missed the FAST boat and have to get the slow one. I bought most CER at under 5c, with over a million averaging under 8c. My average for VPG under 8c, LYC average under 20c, Even the old ADI are showing a profit in the books now.

There have been great bargains if the fundamentals were examined and the rule "avoid trying to catch a falling knife" was ignored. It has been a time to play "chase the lemmings". In over 50 years I have never seen it a better time to invest than it has been for the last 6 months. The value of the stocks I now hold is up over 400% over that period without adding any new capital and drawing out "living expenses" after a lot of the transactions.


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## MrBurns (27 September 2009)

Good thread, interesting to see what people bought and why.


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## nioka (27 September 2009)

kennas said:


> The smiles mean he's ramping.
> 
> Long term stock for retirees? LOL




I'll expand on the pick of 5 and why they are long term.

CER. is trading well below its NTA even though the assets have been devalued. It is operating profitably and under its constitution must pay out profits to trust holders. The debt has been stabilised with no dilution and there is no immediate debt that has to be repaid. It is reaching/has reached a point where the funds are reinvesting in CER again. I anticipate annual dividends which will not be far below my average cost per unit shortly. That means a 100% PA dividend on the investment.Their assets are in good old bricks and mortar associated with successful shopping centres.

CNP. Similar story to CER. A little more risk than CER as far as share dilution under the terms reached with greedy banks for refinancing. They probably will not pay dividends for some time in an effort to reduce debt. Close to a 600% capital gain so far so dividends may not be an issue.

VPG. Similar story again. A large amoun of debt has been written off. BOS have made a debt for equity swap and a deal with McCabe has seen him reenter VPG as a shareholder and a place on the board. They have debt under control. They have an SPP at19c which will allow me to purchase 1 for 4 at 10c with the SP holding around 14c. Even though buying at 10c will increase my average price I will take up the offer. Once again bricks and mortar, always a sound investment.

LYC. Rare earths are rare and Lynas has lots of it. You will notice, if you chaeck the LYC threads, that I have been following them for a long time. You will also find a post near the peak price that I posted I was exiting to buy back closer to production. A lucky decision as I bought back around 8 times my original holding for less money. They will have ups and downs until refinancing is certain. In the meantime I expect a discounted SPP to increase my holding. They will complete the production facility and will be a great investment in the medium term.

BUL. BUL has large coal seam acreages in the right areas at the right time. They have two important partners that will help then devellop the project in the short term. Their SP has been held back by the uncertainty regarding the bank holdings that could be sold at any time. Once this issue is resolved and the gas starts to flow I expect them to fly in the same manner as others in the same field have done.

There are others I hold with similar stories but the thread was "5". It was hard not to place OZL and MCR as they are just as rewarding as some in the 5. Even some of the specs like TAS,EDE, TEY. GRK are ahead. EDE could be in the top 5 and I believe will be a ten bagger for me. They have moved from being a spec to being a company with accepted technology that is now being marketed.

Of course DYOR. The above is my thoughts on some stocks. I may be right or I may be wrong. However I'll keep up the smiles 

I dont consider a post a ramp if there are facts to back up a statement and if anyone cares to research they should come to the same conclusions. If not then I'm happy to be corrected.(with facts not inuendo)


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## Julia (27 September 2009)

nioka said:


> Anyone holding these and buying at tha right time HAS to be smiling.Watch them go from here. Take CER and VPG. Without this GFC I would not have held these in numbers well over 1 million. This GFC has been the best thing since sliced bread as far as I.m concerned. Just need to trade a few each week and it is as good as any super fund can pay out.



Thanks Nioka for interesting rationale on each of these.
My first reaction was, wow, these are high risk stocks, but you've obviously researched them and have done well by buying at the right time.  Congratulations.


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## nawshus (29 September 2009)

Hi Muschu what made you choose IVC as a long term hold?


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## Bill M (29 September 2009)

Hi Muschu, half my portfolio is still in the big 4 banks. I was buying them madly during their lows and bought into every share purchase plan. They have doubled in price since hitting their lows, the dividends keep on coming in and I continue to hold. At these levels though my buying stopped a long time ago. I have also taken a position in Telstra recently as once again too much doom and gloom has been priced into the stock currently. The Telstra dividend is also very healthy. I also hold some hybrid stocks and convertible shares which were all purchased at under face value. I also put in for 2 lots of PERLS V, one in my name and one in my wife's. I think that interest rates will be going up soon and then that sector might take off too, good luck.


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## Julia (29 September 2009)

nawshus said:


> Hi Muschu what made you choose IVC as a long term hold?



If you know what their business is, I don't think you'd be asking that question!

Rick, they do have a fairly high level of debt.  This doesn't worry you?


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## whereu (30 September 2009)

awg said:


> Depends, So-cynical..most of the stocks shown are up over 100% recently.
> 
> that can send them to the top overnight in a diversified portfolio.
> 
> ...





To answer your questions. My first objective when buying shares is to look for those that I think have the best potential for gains in the share price in the next 1 to 3 years. I don't exclude dividends. For example NCM is seventh on my list. I chose it on the assumption that NCM will hopefully increase gold production and hold costs. An increase in gold price will be a nice bonus!

What made me choose the one that are currently on top of my list?

Generally I try to find companies that have sufficient resources (money and people) to achieve objectives (I don't always make the right call). The following comments are about additional factors that played a part in my decision to buy. 

AQP – I bought these on the assumption that platinum is a very scare precious metal, and that price increases will exceed the mining inflation rate. I understand that AQP has a reasonable reserve.
BDG – I looked for a local steel maker. My logic (or lack of logic) was that Australia exports iron ore. Why not add value locally to this product?
BUL – I looked for a CSG explorer that potentially has a nice resource base. I did have BOW shares but have since sold them, with the intention of buying them back at a lower price. I never did (too greedy!)
LNG – First cab out the rank in Australia for LNG (as far as I know). I nearly gave up on these a few times on a stop loss basis. So far I'm glad I didn't.
MEO – I liked the idea of MEO taking advantage of what appears to be a draw back. They have carbon dioxide in their methane gas reserves. They plan to make methanol from these two components. Smart, I thought!
IPL – I bought into the “world needs food and hence fertiliser” story, and the “Australia needs explosives for its mining industry” story. They have two irons in the fire!
These shares have done well for me, which largely explains their position at the top of my portfolio.

About 13.9% of my portfolio is worth less than I paid for the shares. Why did I buy them? The main culprits are (percentage of my portfolio in brackets) 
MAK (3.19%) - A large resource, close to production. The world needs food and hence fertiliser. 
CTO (3.19%)  - should be ramping up production shortly
GDY (2.39%) - Sounded like a good, clean source of energy. I hope (shouldn't invest on hope, I suppose) they will overcome technical problems.
UXA (2.31%) - speculative (for me). Hope (there's that 4 letter word again) they find lots of uranium.

I do have speculative shares (UXA one of them?), in which I was less fussy on selection criteria.

Please make your own decisions on investments. My postings are NEVER recommendations.


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## brianwh (1 October 2009)

As others have said - a very interesting thread.

An observation. Quite a number of posters have indicated significant holdings of shares that I would put in the "risky" or speculative category (assuming that these are part of an SMSF). My own philosophy is to hold a dozen or so "blue chips" from the top 50 (and good dividends is a factor in choosing here) and around half that number small caps. I am fine with one, or perhaps two, small caps that are somewhat speculative (eg I hold TFC) but I would be unlikely to have more than 1% of my share portfolio in one of these.

As a retiree, totally dependent on my SMSF for my income, I need to have preservation of capital as a high priority. You don't need too many "dogs" to put this under pressure.


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## Muschu (2 October 2009)

brianwh said:


> Hi Rick - is this list the equities component of your SMSF? In my own case I have approx 40% of my SMSF in equities with the major holdings:
> 
> LIC's: AFI ARG MLT (1/3)
> 
> ...




Hi
I was VERY averse about getting back into banks and thought I never would.  However some of my reading and advice suggested that the banks lead us into the crisis and would lead us out.  
The banks have certainly been profitable thes past months. But I suspect there will be limits to their growth potential.

I share your concern about property and tend to avoid such stocks.  A part of me suspects this is a foundless concern.

Cash?  Don't know to be honest.  As of today [not a good ASX day] we are about 20% cash.  This time I think [may be wrong] that we will ride out any downturn.

Best wishes

Rick


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## Muschu (2 October 2009)

nawshus said:


> Hi Muschu what made you choose IVC as a long term hold?




What's the old saying? "There are 2 things you can't avoid "death and taxes".  

I will never become rich via IVC but maybe they're an OK defensive stock.  Hope so.  I am well in front.

Rick


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## Muschu (2 October 2009)

Julia said:


> If you know what their business is, I don't think you'd be asking that question!
> 
> Rick, they do have a fairly high level of debt.  This doesn't worry you?




Hi Julia

Very good question and one I always research.  In my mind the performance [and SP relativities these past few years] has been quite good.  

As I recall I read on the IVC thread, a long time ago, that Nick Radge holds IVC in his SMSF.  And he is far more in tune with the market than I am.

However - you may be right.  

Regards

Rick


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## Muschu (2 October 2009)

Bill M said:


> Hi Muschu, half my portfolio is still in the big 4 banks. I was buying them madly during their lows and bought into every share purchase plan. They have doubled in price since hitting their lows, the dividends keep on coming in and I continue to hold. At these levels though my buying stopped a long time ago. I have also taken a position in Telstra recently as once again too much doom and gloom has been priced into the stock currently. The Telstra dividend is also very healthy. I also hold some hybrid stocks and convertible shares which were all purchased at under face value. I also put in for 2 lots of PERLS V, one in my name and one in my wife's. I think that interest rates will be going up soon and then that sector might take off too, good luck.




Hi

As a personal and layman's view I can't see what TLS offers other than a good dividend and a far too volatile SP over a long period.  This is not a stock that suits me.

Tomorrow, or over time, I may be very wrong.

R


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## nunthewiser (2 October 2009)

MTS been mentioned here yet ? 

gotta be one of the most boring stocks on the ASX over the last 2 years ....

great for the pacemakers 

i hold


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## Muschu (2 October 2009)

nunthewiser said:


> MTS been mentioned here yet ?
> 
> gotta be one of the most boring stocks on the ASX over the last 2 years ....
> 
> ...




Not as boring as TLS...............  I have often looked at MTS.  Strikes me as a good defensive stock.  I guess my reservation is whether they can, long term, hold up against the "power" of a WOW - in a duopoly I don't personally like.  Nothing to do with investment.


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## Julia (2 October 2009)

Muschu said:


> Not as boring as TLS...............  I have often looked at MTS.  Strikes me as a good defensive stock.  I guess my reservation is whether they can, long term, hold up against the "power" of a WOW - in a duopoly I don't personally like.  Nothing to do with investment.



That has been my reason for leaving MTS alone too, Rick.
Btw, hasn't your NVT done well in recent months!

I'm waiting for a pullback on ORL to buy.  Have been wary about retail stocks in the recession that we're not actually having, but suspect this end of the market is probably unaffected by such inconveniences as cash shortages.


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## Muschu (3 October 2009)

Julia said:


> That has been my reason for leaving MTS alone too, Rick.
> Btw, hasn't your NVT done well in recent months!
> 
> I'm waiting for a pullback on ORL to buy.  Have been wary about retail stocks in the recession that we're not actually having, but suspect this end of the market is probably unaffected by such inconveniences as cash shortages.




NVT has been outstanding Julia -- I've heard it said that there may be merit in trading in fields you figure you have some understanding of - and education is a big part of my background.  NVT has done nothing but grow [fundamentally] since floating and the SP [in my view] had to come to recognise this.  If they can crack further overseas markets [as the CEO has said they intend to do] I believe they will keep growing.

I agree with you about most aspects of retail and don't quite get how WOW has got to its present SP.  I don't have many and don't plan to increase.  You'll note however that I also hold JBH and DJS -- these seem better.  Also bought a tiny quantity of TRS -- not so confident here but will hang on.

Hope all is good young lady.

Rick


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## Muschu (3 October 2009)

Julia said:


> .....
> I'm waiting for a pullback on ORL to buy.... QUOTE]
> 
> 
> ...


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## awg (3 October 2009)

Morning folks,

ORL and NVT both came high on the list of stocks I have been examining for my Franking credit strategy.

In fact ORL was No1 ( use several criteria, FF credit only one scan criteria)

I just couldnt come at buying a handbag company, especially as it seems so discretionary in times of possible economic turmoil.

Went up 19% the following day

NVT, the thing that worried me a little is the trashing of Oz reputation that is going on, especially in India, not sure what effect that may have on earnings, as I have not yet done any in-depth research on this company 


MTS do own, is very defensive, also high on scan criteria, like WOW

I would not be too concerned about WOW out competing them , as they have a different strategy, that is a franchised niche market.

Have observed how well they have done with start-ups in my area.

ACCC keeps a good eye on WOW, and I imagine any overt moves to crush competitors would draw a complaint.

"GUY" over 9%, I'll take that, have had, and expect a few % growth here and there.
Never will set the world on fire, but look at their track record

Hybrids have been doing OK for the defensive sector of my portfolio, 10 to 20% ROI, over the last 6 months, expect 7 to 10% yield over next 12 months.

cash component is holding my overall performance back.

question, what do other retirees believe is an acceptable average return, year on year?

In my case 10% on entire portfolio, after tax and all other costs is acceptable, dont need too much risk overall


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## nioka (3 October 2009)

awg said:


> question, what do other retirees believe is an acceptable average return, year on year?
> 
> In my case 10% on entire portfolio, after tax and all other costs is acceptable, dont need too much risk overall




By taking advantage of the GFC i suggest that anything under 100% this year is failure.

I suggest that in normal years a 10% is well below par. The average fund will achieve this most years and that is after they take out ENORMOUS charges, pay themselves more than they are worth and have proven not to be all that good. I expect that a 25% return for a properly researched investment fund is par for the course.


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## awg (3 October 2009)

nioka said:


> By taking advantage of the GFC i suggest that anything under 100% this year is failure.




Thanks for the response 

For retirees in a moderate growth pension phase on their entire investment?

congrats if u get 100%, dont do what the herd do,
I suspect I wont be lonely with the other failers, if thats the benchmark!




nioka said:


> I suggest that in normal years a 10% is well below par. The average fund will achieve this most years and that is after they take out ENORMOUS charges, pay themselves more than they are worth and have proven not to be all that good. I expect that a 25% return for a properly researched investment fund is par for the course.




as above, 25% yr on yr for any sort of fund would outrank Warren Buffet.

checking todays Fin Review,Super Pension funds majority negative for 3 yrs... dont know if many claiming 10%+ over 10yrs?

take yr point about well researched funds, as they say though, especially for the mug, last yrs best can often be next yrs worst


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## Muschu (3 October 2009)

nioka said:


> CER, CNP,VPG,LYC, BUL,




Very interesting indeed.  Are you retired Nioka?

Regards

Rick


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## Garpal Gumnut (3 October 2009)

RIO saved my bacon during the crash.

I sold everything at some loss and switched into RIO.

Getting back up to three again as a result.

RIO is a little beauty. I prefer it to BHP.

I'd also mention ANZ, MOS, CVN and WOW.for those retired or just old and tired.

The middle two are speccies.

gg


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## Julia (3 October 2009)

awg said:


> In fact ORL was No1 ( use several criteria, FF credit only one scan criteria)
> 
> I just couldnt come at buying a handbag company, especially as it seems so discretionary in times of possible economic turmoil.



Oh you chauvinist.  Who cares what they produce?  I made the point earlier that ORL is probably directed at that socio economic group which are happily unaffected by the downturns.  There are always going to be plenty of people with plenty of money.




> Went up 19% the following day



See what you get for your bias, awg?



> NVT, the thing that worried me a little is the trashing of Oz reputation that is going on, especially in India, not sure what effect that may have on earnings, as I have not yet done any in-depth research on this company



Doubt it will have any appreciable effect.  The international waters will be smoothed and NVT will continue happily.  If you just respond to the price action on the chart you don't need to worry about the background too much imo.  I understand, though, that many people feel better if they do a lot of fundamental research.



> Have observed how well they have done with start-ups in my area.



Again, that doesn't necessarily translate into increased SP.



> "GUY" over 9%, I'll take that, have had, and expect a few % growth here and there.
> Never will set the world on fire, but look at their track record



Is "GUY" a stock code?  Etrade say not.



> question, what do other retirees believe is an acceptable average return, year on year?
> 
> In my case 10% on entire portfolio, after tax and all other costs is acceptable, dont need too much risk overall




Doesn't what you're looking for here depend on your capital base?
i.e. a substantial capital base reduces the need for high % returns, allows one to be more relaxed, take fewer risks, whereas a smaller capital base means you have to make that money work harder.

So this raises another question of deciding how much is enough.  When we look at the Storm thread, there were people there with already more than enough to generate a decent living until they died, but they still joined up with Storm and paid 7% commission for a shonky system which ultimately lost them everything.   So it seems there are people for whom enough will never be enough, and they will always want more.


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## nioka (4 October 2009)

Muschu said:


> Very interesting indeed.  Are you retired Nioka?
> 
> Regards
> 
> Rick




Yes, Tired yesterday and tired again today, that's retired.Been doing that for many years.
 But seriously, yes.
Retired is doing what you want to do, so in that sense I have been retired for most of my life. The body has now crashed with age so I am now more retired than ever. This however gives me more time than ever to follow the stock market and laptop computers allow me to follow the market (along with ASF and HC etc) when I'm fit enough to go fishing. I treat each day as the first day of the rest of my life. I don't have many quality years left and I hate to waste a minute of them.

I start the day checking my many stocks, one by one. I decide if they are still on track fundamentally. I look to see if I still consider them value at the current price. The only reason I use charts is to decide a possible price if I decide to sell some or buy more. I break many of the "rules". 

Over the years I have noticed a change from "investing" in a company to "trading and speculating" in the share market. There is a "casino" atmosphere. There has developed a culture where charts that really only reflect the past are used by traders to predict the future. This type of activity creates a situation where fundamentally sound companies are oversold. Companies that have corrected problems which created past "charts" are oversold on past performance but are underpriced for their current performance.

Take CER for example. A fundamental analysis tells me they are worth at least 50c and have a potential of possibly $1 yet I was able to buy them as low as 2.3c ( I missed the low of 1.6c). There are many others like CER.

Even a stock like ADI is a multi bagger for me while some people are calling them a dog. I have traded them and turned an initial investment in them from a few thousand shares to a few hundred thousand shares. It was simple and this can be verified by a check on the ADI past threads. ADI was in partnership (still is) with AUT and EKA in oil exploration. The relative prices of the three continually change and it is possible to switch from one to the other and increase your interest in the activity. eg. I recently traded 150,0000 ADI for 300,000 EKA followed up by selling the EKA and buying back 300,00 ADI with the proceeds. A gain of another 150,000 "freebie" ADI.

I am serious when I say that this GFC and the lemming factor GFC combination have been responsible for creating the best investment opportunities I have ever seen. All one needs to do is research and think outside the square.


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## Muschu (4 October 2009)

nioka said:


> Yes, Tired yesterday and tired again today, that's retired.Been doing that for many years. But seriously, yes....
> ......This however gives me more time than ever to follow the stock market and laptop computers allow me to follow the market (along with ASF and HC etc) when I'm fit enough to go fishing. .......





It sounds as though you very much enjoy what you are doing Noika and good on you for that.  You seem to give the market a lot more time than I do but, again, if that gives you pleasure then great!!!  
However I can't imagine taking my laptop fishing.  My mates would rib the hell out of me...
Regards

Rick

PS_ Feel free to PM me next time you find a grossly undervalued stock.


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## Muschu (4 October 2009)

awg said:


> Morning folks,
> 
> ORL and NVT both came high on the list of stocks I have been examining for my Franking credit strategy.
> 
> ...




Strange creatures we men, yes?  The second strangest gender perhaps..  I admit that my first reaction to ORL was along the lines of your own.  But when I had a look at it I could see Julia's reasoning... So I am keeping it in the radar.
As for NVT:  Every annual report [to my knowledge] has been better than the one before.  The SP held up superbly during the worst of the downturn and following the Indian uproar.  At that time I found no mention of this education company in the press - just small-time shonky players.  Could student unrest be a factor in the future?  I imagine this is possible but I can't see it having an enduring effect unless parents cease seeking quality overseas education for their children.  And Asian parents, in particular, place enormous emphasis on their kids' education.
Recall also that Australia is only one sphere of influence for NVT.  [ am pretty confident that all colleges are on Uni campuses].  They began with one college in Perth and now have several in Australia.  However they have added Africa, Sri Lanka, the UK.  And they have announced that they are investigating in-roads into other countries including the USA.
Their website www.navitasworld.com will tell you just how many colleges they presently have.  I think it is around 12-15.  
This is, in my opinion, an exceptionally professional outfit, with great prospects ahead.
I could be wrong!!
Regards

Rick

PS - Again I refer you to comments I have made previously in this thread about NVT.


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## awg (4 October 2009)

Julia said:


> Is "GUY" a stock code?  Etrade say not.




"GUY" refers to "Grossed up yield"..ie DIV + franking credit, in reference to Metcash



Julia said:


> Doesn't what you're looking for here depend on your capital base?
> i.e. a substantial capital base reduces the need for high % returns, allows one to be more relaxed, take fewer risks, whereas a smaller capital base means you have to make that money work harder.
> 
> So this raises another question of deciding how much is enough.  When we look at the Storm thread, there were people there with already more than enough to generate a decent living until they died, but they still joined up with Storm and paid 7% commission for a shonky system which ultimately lost them everything.   So it seems there are people for whom enough will never be enough, and they will always want more.




Very true, also depends on whether you want to leave assets to children, which probably contributes to many, including Stormers, over-reaching... seems a common selling point by financial planning companies, not just to live free of penury in old age.

Just interested in what benchmark return, if any, other retirees use.

My figure was based on my expenses, plus inflation, and to continue to build asset base. I live a modest lifestyle


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## Julia (4 October 2009)

The other question which I think is important and worth discussing is the value we place (or don't) on capital preservation.

I always have in mind a base level of capital where I know that - even with very low interest rates - if I convert completely to cash, I can still generate more than enough to live on.

Doing this eliminates that ghastly fear that markets will keep on dropping, more even than the recent 50%.

The fact that so many people didn't consider this has resulted in many delaying their retirement plans or going back to work.

Then when the market resumes an uptrend (and acknowledging that one is very unlikely to buy back in at the bottom, so accept giving back initial potential profits) your capital will buy many more shares than if you'd held through the downturn.

The downside of this strategy is if you're still in the accumulation phase, you have to cop the CGT on the sales.  Not a high percentage at 15% or less if held more than 12 months, but it can still result in a quite high payment to the tax office.

However, once moved into an allocated pension, this is no longer a consideration.

I'm interested in other views about this.


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## Muschu (5 October 2009)

Julia said:


> The other question which I think is important and worth discussing is the value we place (or don't) on capital preservation.
> 
> I always have in mind a base level of capital where I know that - even with very low interest rates - if I convert completely to cash, I can still generate more than enough to live on.
> 
> ...




[Any way of changing the thread title?  My doing!]

Yet again you raise interesting questions Julia and I'll try a brief personal perspective.

In retirement, and in the pension phase, I have what I think is a common concern about capital preservation.  [I still do part time consultancy work however].

Yes, I essentially moved out of the market during the downturn - later than many.  Now I am pretty much back in but always leave enough cash set aside for living purposes for 2-3 years.  [We live quite modestly and my 2002 Commodore will agree].

In re-entering the market I pretty much stuck to the ASX20.  This has now expanded to the ASX300.

An issue for me was how to access quality advice to throw into the mix so that my investment choices could be [a] located by means other than randomness or the odd magazine, article or ASF comment; * have some rationale attached to them; [c] avoid the ineptitude of most [can't say "all" - don't like generalisations] Financial Planners; and [d] avoid Managed Funds.

Nick Radge's website has been a great source of information for me.  I know that his strategy and approach may not suit everyone but it has certainly suited us.

I've also found that the downturn we have experienced has actually removed most of the fear I had of the market.  I retired in 2003 when the market became quite bullish.  So it was a bit of a shock when it turned around.  Now I am living reasonably comfortably with volatility and our investments are diverse enough that I hope not to have to run for cover in the near future.

Don't know if any of this makes much sense.

Regards

Rick*


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## nioka (5 October 2009)

Julia said:


> The other question which I think is important and worth discussing is the value we place (or don't) on capital preservation.
> 
> I always have in mind a base level of capital where I know that - even with very low interest rates - if I convert completely to cash, I can still generate more than enough to live on.
> 
> Doing this eliminates that ghastly fear that markets will keep on dropping, more even than the recent 50%..




The problem with total security is ...... BOREDOM. My main investment is in property. It is reliable and profitable but it is almost as boring as bank deposits. The stock market keeps my mind active well past the state of my body. It is a challenge and that is worth as much to me as any profit. I do agree that one should not invest, with risk, more than you are prepared to lose. That is why I trade/invest on fundamentals.


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## MrBurns (5 October 2009)

nioka said:


> The problem with total security is ...... BOREDOM. My main investment is in property. It is reliable and profitable but it is almost as boring as bank deposits. The stock market keeps my mind active well past the state of my body. It is a challenge and that is worth as much to me as any profit. I do agree that one should not invest, with risk, more than you are prepared to lose. That is why I trade/invest on fundamentals.




Stick with property and splash out of tattslotto tickets, thats sort of excitng and cheaper.

Capital preservation ? 

Just hope the kids move out and get jobs.


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## nioka (5 October 2009)

MrBurns said:


> Stick with property and splash out of tattslotto tickets, thats sort of excitng and cheaper.
> 
> Capital preservation ?
> 
> Just hope the kids move out and get jobs.




My grand kids have moved out from my kids home and have jobs. My investment plan does preserve capital. It actually is preserving other peoples capital too.


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## MrBurns (5 October 2009)

nioka said:


> My grand kids have moved out from my kids home and have jobs. My investment plan does preserve capital. It actually is preserving other peoples capital too.




Take some out and do a tour of Europe - 

http://www.insightvacations.costlesstravel.com.au/html/european_classic.html


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## Muschu (12 December 2015)

Muschu said:


> Hi
> A personal review:
> Long term holds do not necessarily equal forever.  For me I hope it means at least reduced time spent in monitoring my portfolio.
> Since this thread began I have sold nothing but bought a little.  I am working towards my top holds being:
> ...




How times change..... I smiled when I found this old post... Haven't had any of the above for a long time....


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## Bill M (13 December 2015)

Mine has changed a lot too. Apart from a portfolio of hybrids and capital notes I now mostly invest in ETF's in my Super fund. 

All are high dividend Australian ETF's and I have them returning me gross 7 to 8% distributions. They cover all of my minimum drawdown of 4% (pension phase) and then some. I have bought ETF's to limit any losses in individual companies and I do not have to manage the funds, the ETF providers do that for a very small fee of between .25 and .35%

My top 5 holdings now are:

1. RDV        (ETF)
2. VHY        (ETF)
3. SYI         (ETF)
4. AYF         (LIC)
5. NAB


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## MrBurns (13 December 2015)

I have VAS which is down at present
Apart from that WES and TLS are the main ones for me
BEN has been disappointing ...
A few people I know are picking up BHP but I'm not so sure about that one.


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## Muschu (13 December 2015)

Bill M said:


> Mine has changed a lot too. Apart from a portfolio of hybrids and capital notes I now mostly invest in ETF's in my Super fund.
> 
> All are high dividend Australian ETF's and I have them returning me gross 7 to 8% distributions. They cover all of my minimum drawdown of 4% (pension phase) and then some. I have bought ETF's to limit any losses in individual companies and I do not have to manage the funds, the ETF providers do that for a very small fee of between .25 and .35%
> 
> ...





Interesting Bill thank you.  I have ARG, AFI and to a smaller extent MLT.  Plus TLS, banks, WES  - and very small holds in TCL, SYD and SGP.
The only "speculative" stock I have is HZR - the smallest of them all and maybe a punt but I've heard good comments / views from people in the sector.


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## Muschu (13 December 2015)

MrBurns said:


> I have VAS which is down at present
> Apart from that WES and TLS are the main ones for me
> BEN has been disappointing ...
> A few people I know are picking up BHP but I'm not so sure about that one.




I got out of BHP a long time ago - thank goodness..... Read an article suggesting iron ore could go to $35 so may BHP has further to fall.  Add in their recent crisis.

Maybe RIO if ore does hit $35, but what will dividends do?  And how far away will capital growth be?

Tempting but risky.... Maybe better held through a fund?


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## Muschu (13 December 2015)

Bill M said:


> Mine has changed a lot too. Apart from a portfolio of hybrids and capital notes I now mostly invest in ETF's in my Super fund.
> 
> All are high dividend Australian ETF's and I have them returning me gross 7 to 8% distributions. They cover all of my minimum drawdown of 4% (pension phase) and then some. I have bought ETF's to limit any losses in individual companies and I do not have to manage the funds, the ETF providers do that for a very small fee of between .25 and .35%
> 
> ...




Bill where can I find info on the distributions please?  I gather these are not ordinary dividends and they don't show as such on the Commsec website.


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## Pager (13 December 2015)

Interesting and scary to an extent seeing specific stocks mentioned as big, safe, steady and conservative a number of years ago and then seeing them now! BHP and WOW have both been well off there highs and crashing down and looking sick, TLS had its time in the sewer but has recovered some but lost its shine, and then the Banks, were are they headed???.

All it does for me is reinforce that using ETF,s and conservative LIC,s is a much less bumpy ride, sure you may be capping the potential huge upside of getting on a stock that goes up 3/4/5 times in a year or so, but you will also suffer less if a stock takes a hit and has a dramatic sell off, last thing you wont to be doing is jumping in and out of the market and trying to time your buys and sells with your retirement investments, Top 5 holdings for my SMSF are IHD, VAP, BKI, AYF, WDIV, all have good dividend yield and although most are down recently, far less than if I had individual holdings i bet, so im happy to hold for the long term.


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## Bill M (13 December 2015)

Muschu said:


> Bill where can I find info on the distributions please?  I gather these are not ordinary dividends and they don't show as such on the Commsec website.




You have to go directly to the ETF's website and they quote the distributions there. Here is the one for VHY: https://www.vanguardinvestments.com.au/retail/ret/investments/etfs.jsp#distributionstab, cheers.


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## shouldaindex (13 December 2015)

My watchlist is:

ASX ETF - VAS, IOZ 
S&P 500 ETF - VTS
LIC - ARG, MLT
Stocks - ANZ, WOW, TLS

and Cash.

I previously had BHP on the list, but Iron Ore fundamentals are basically a no forever.

I've looked at ASX (the stock), and am still considering whether to add it to my watchlist.  But some numbers didn't quite pass the test, 12 ROE, 19 PE, 90% Payout Ratio = 7% FF Dividend and 1% Capital Growth = 8%.  Also qualitatively the ASX margins are extraordinarily high and look to be gaining more competition.  

I love researching and trying to add more stocks to the roster of options, so like hearing from others.  Especially about 'Forward Looking' Blue Chips  (Agriculture or Health as a bonus), as most Blue Chips' reputations are built from the past which can make it difficult to see any changes in the future.


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## Muschu (15 December 2015)

Bill M said:


> You have to go directly to the ETF's website and they quote the distributions there. Here is the one for VHY: https://www.vanguardinvestments.com.au/retail/ret/investments/etfs.jsp#distributionstab, cheers.




Thanks Bill.  

I have never really had a look at ETFs.... I gather most return about 7% in distributions but also there is no franking consideration?

Do you consider them a better investment than LICs such as AFI and ARG?  These pay about 4% in dividends and are also fully franked.

I know most younger investors would consider all of these pretty boring but at my age I "boring" can leave me more time for other pursuits....

Rick


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## Bill M (15 December 2015)

Muschu said:


> Thanks Bill.
> 
> I have never really had a look at ETFs.... I gather most return about 7% in distributions but also there is no franking consideration?
> 
> ...




Yes there is franking consideration as well but before the end of financial year they are only estimations. Most of those ETF's are around 70% franked. So yes you get a bit extra on top. Then around about August they send you a tax statement showing exactly what the figures are. I have a Super Fund where I can buy ETF's directly into my super and they do all the imputation credits. For most FPO shares the imputation credits come immediately, with these ETF's sometimes they come at the end of financial year and my super fund deals with all of that. (They clearly show payments received)

As for LIC's versus ETF's, in my opinion ETF's are better. They buy the sector, in my case high dividend shares. They don't pick and choose and try and beat the market, they basically buy the market and add some extra rules. For example they can't just buy a stock this year because it paid a 10% dividend, it has to show a history of previous dividends and the ability to pay future dividends and in some cases show that they can increase dividends in the future. 

With LIC's you have managers picking and choosing what they think is best. I have read countless articles of how around 70% of fund managers fail to beat the index, so for me I prefer ETF's. As a long term holder for income, I would not like to be picking my own stocks. Just imagine if I had 100K in BHP, I would have suffered massive losses if I didn't sell whereas with the ETF's those losses are nowhere near as severe.

I have this train of thought "why invest in one company to get a secure dividend when I can invest in several companies (via 1 ETF purchase) and get exactly the same or better dividend"? It just limits the risks of investing in individual companies, we have all seen it before. Market closes at 4 PM Friday and at 4:40 PM company *** makes an announcement, massive write downs, no dividends for the next 3 years, CFO terminated etc.. On Monday stock *** opens -50% down, you've done your dough. 

Boring is good, I like it.


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## fraa (15 December 2015)

I am a newb but I have actually look extensively at some of the etfs listed and I am wondering based on the comments I am reading here whether you guys have too.

I am reading here that high div etfs like vhy, ihd, syi and rdv are more safer, are more diversified for a small fee.

But the underlying are all ASX stocks - and as we know the ASX is very top heavy and dominated by a few blue chips mainly in mining and financials. So for all of these etfs, 10 stocks or so (4 banks, BHP/RIO, WOW, TLS and WES  etc) make up around 50-75% of your holdings depending on the etf. If you hold 20 stocks, you can pretty much account for 75 to 90% of these indexes.

This is not the best diversification and owning the different etfs like vhy and IHD will not fix this as the underlying are all the same anyway. You are also paying 0.25% to 0.4% to buy and hold a portfolio of 15 to 20 stock that will not change often. You might as well buy and hold these names yourself. 

Also regarding LICs and active management - some of these LICs buy and hold the same blue chips for long periods. Also, if you look at the LIC costs, some have costs which are actually lower then these div etfs (afi is 0.18% to vanguard's VHY of 0.25%).

Keep in mind that much of the passive index movement (i.e. Bogleheads) literature is written for the US market which has proper cheap indexes that do proper diversification (i.e. look at SnP500 sector breakdown vs ASX300 sector breakdown) at much lower prices (0.3% is regarded as on the expensive end for passive investing for Bogleheads in the US, in fact the vanguard US Total Stock Market is like 0.05%).


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## Boggo (15 December 2015)

fraa said:


> I am a newb but I have actually look extensively at some of the etfs listed and I am wondering based on the comments I am reading here whether you guys have too.
> 
> I am reading here that high div etfs like vhy, ihd, syi and rdv are more safer, are more diversified for a small fee.
> 
> ...




Did a few exercises on ETF's a few years ago when the ASX was conducting roadshows along with some of the ETF providers.
Couldn't see any advantage in holding them, and having to pay for the privilege.
I found that in any of those there was always a few stocks that held progress back, stocks that you would have (should have) sold out of if held individually.
Interesting scenarios developing in the US related to some of these ETF type providers and where they are heading...
http://www.bloomberg.com/news/artic...e-nears-3-year-high-after-third-avenue-freeze
and
http://www.marketwatch.com/story/etfs-suffer-from-a-chessboard-problem-2015-11-05

Weekly chart of VHY below, click to expand.


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## Junior (16 December 2015)

I've been researching these ETFs:  https://www.marketvectors.com.au/Home.aspx

They add another layer of rules which may help performance in turbulent markets.

MVW - Invest in over 60 of the largest and most liquid ASX-listed companies across all sectors.  

This could be a better approach than a traditional Aus Share fund or High yielding fund in the current environment, as you won't be overweight banks, miners, supermarkets etc.

MVS -  most liquid dividend paying listed small cap companies.  This is effectively a high yield, small cap fund.  I like this concept in our current low rate environment.  But this is a relatively new fund, so performance history is limited.

Has anyone else researched these funds?


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## Muschu (12 March 2016)

It's been a while since I posted here... 

ARG, AFI, TLS and the banks have been our major holds... Pretty "boring" I know... There are others, but fewer off them:  WES, RHC, 

TLS has been very good to us but [and I know the banks have been struggling too] but TLS now seems to be just trading sideways in a reasonably good upswing.

Thinking of off loading about half the TLS into strong stocks that are unlikely to "die".. I don't seek maximum dividends and am comfortable with lesser dividends if the prospect [not a guarantee] of greater capital growth than TLS exists.  

Stocks that come to mind include SYD, TCL, ASX, SGP, DMP, TTS, PRY, SHL, IVC  come to mind.

Wondering if any retirees out there would care to share which stocks outside of the banks, TLS and the like  you feel comfortable [at this stage] having as keepers?

Many thanks


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## Toyota Lexcen (12 March 2016)

What about some of the property trusts?

I have boring portfolio as well,

also consider if you have owned these stocks for a while you may well have dividends that have grown rather well, 

I still feel TLS will be a good stock for the future, data is becoming more and more important and feel Telstra will provide this to consumers

Also long on AMP in particular as a turn around stock or takeover target


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## Muschu (12 March 2016)

Toyota Lexcen said:


> What about some of the property trusts?
> 
> I have boring portfolio as well,
> 
> ...




Thanks TL... Good point about property trusts and I'll look into that.  Got any particular ones in mind?

I can't afford to "play" with the market too much but also have very small amounts into HZR, GXY and S32... Gotta through something into the "boring".


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## Toyota Lexcen (13 March 2016)

follow Nulla Nulla's thread on the property trust sector for a good summary of share prices, dividends and the weekly movements

i have the following:

BWP - owner of Bunnings warehouse properties

VCX - shopping centres (used to be cfx), has recently merged with other property trust

IOF - office trust, this is merging with DXS?

CMW - diversified property portfolio (very small speculative holding), i bought this one for the dividend play as its paying a higher dividend than most, looking to see if share price grows a bit more

over the past 10months the sector has held up okay, they not back to the highs but they not down 20-30% either

there has been merger activity  and think this may be what is underpinning the interest in the sector


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