Australian (ASX) Stock Market Forum

Dump it Here

@divs4ever, commencing with the new financial year on July 1st, 2024, I’ll be adopting a different strategy. The dividends and franking credits from my portfolio will be channelled towards creating a reliable income stream.
i thought you might ( and agree it is rational, to my mind )

the other logic was adding to your losers , but that would mean an awkward weighting

but July is a month ( and a bit ) away , there is still time for fire-works

cheers
 
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Disclaimer - This is a theoretical investment exercise
In this exercise, we put "Google (AI) Gemini" head-to-head with seasoned fund manager Dr. Don Hamson from Plato Investment Management. Both were tasked with providing their "top five growth and income stocks" for the next 12 months on the ASX.

First Place $117
# Dr. Don Hamson (Expert) - BLUE line on the equity chart (3 winning positions)

Second Place -$630
# Skate - BROWN line on the equity chart (2 winning positions)

Third Place -$2,116
# Google Gemini (AI) - RED line on the equity chart (1 winning position)

2. SummaryResult.jpg


3. WeeklyUpdate.jpg

Skate.
 
Tomorrow.jpg
Investing in the Top 20 Companies - A Strategic Approach
As previously discussed, I've recommended a simple investment strategy - “Buy the ASX20.” This investment approach may not have the adrenaline rush of high-risk, high-return opportunities, but it offers a solid alternative rooted in long-term stability. Investing in the ASX20 provides a thrilling front-row seat to observe how these top 20 market leaders perform collectively.

Simplicity Over Complexity
Instead of pursuing elusive high returns through intricate strategies, this exercise champions simplicity and a more measured approach. Starting from tomorrow, and continuing each Sunday, I’ll track and share the progression of a hypothetical $100,000, 20-position portfolio using the ASX20 strategy. This exercise will offer insights into how a straightforward, large-cap-focused investment strategy performs, without the additional complexity and volatility that more aggressive portfolios might entail. The objective here is to provide a balanced perspective on the potential advantages of a "buy the index" style of investment philosophy.

Skate.
 
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Investing in the Top 20 Companies - A Strategic Approach
As previously discussed, I've recommended a simple investment strategy - “Buy the ASX20.” This investment approach may not have the adrenaline rush of high-risk, high-return opportunities, but it offers a solid alternative rooted in long-term stability. Investing in the ASX20 provides a thrilling front-row seat to observe how these top 20 market leaders perform collectively.

Simplicity Over Complexity
Instead of pursuing elusive high returns through intricate strategies, this exercise champions simplicity and a more measured approach. Starting from tomorrow, and continuing each Sunday, I’ll track and share the progression of a hypothetical $100,000, 20-position portfolio using the ASX20 strategy. This exercise will offer insights into how a straightforward, large-cap-focused investment strategy performs, without the additional complexity and volatility that more aggressive portfolios might entail. The objective here is to provide a balanced perspective on the potential advantages of a "buy the index" style of investment philosophy.

Skate.
now i know it doesn't happen often but it does happen ( AMP comes to mind ) but have you a plan for a stock to be demoted from the TOP 20 and replaced

( say roll over the proceeds from the departing into the new arrival )

cheers
 
now i know it doesn't happen often but it does happen ( AMP comes to mind ) but have you a plan for a stock to be demoted from the TOP 20 and replaced

( say roll over the proceeds from the departing into the new arrival )

cheers


On Tuesdays of this week, I made these remarks about rebalancing

Annual Rebalancing - Keeping your Portfolio Aligned
Maintain the harmony of your portfolio by conducting an annual rebalancing on the 12-month anniversary. This disciplined practice ensures that your investment stays in step with the evolving index composition.

Rebalancing Alternative
The ASX20 (XTL) index comprises the top 20 stocks by float-adjusted market capitalisation. It is highly liquid and accounts for a significant portion (52%) of Australia's equity market. The ASX20 undergoes quarterly rebalancing in March, June, September, and December, with minimal rotation among constituents.

Skate.
 
On Tuesdays of this week, I made these remarks about rebalancing



Rebalancing Alternative
The ASX20 (XTL) index comprises the top 20 stocks by float-adjusted market capitalisation. It is highly liquid and accounts for a significant portion (52%) of Australia's equity market. The ASX20 undergoes quarterly rebalancing in March, June, September, and December, with minimal rotation among constituents.

Skate.
just thinking , sometimes a LARGE cap does a face-plant maybe a long wait ( say six months ) to rebalance may drag on gains elsewhere ( or not )


but then again this is a paper experiment ( i believe ) maybe observation of such anomalies if they occur and may be educational if you decide to do it 'live' ( real money ) next year

cheers

this equal weight strategy should do well after a market retrace ( as some stocks will be oversold )
 
just thinking , sometimes a LARGE cap does a face-plant maybe a long wait ( say six months ) to rebalance may drag on gains elsewhere ( or not )


but then again this is a paper experiment ( i believe ) maybe observation of such anomalies if they occur and may be educational if you decide to do it 'live' ( real money ) next year

cheers

this equal weight strategy should do well after a market retrace ( as some stocks will be oversold )

@divs4ever, the constituents of the ASX20 generally exhibit a mix of diversified, stable, and robust business models that require minimal rotation. The aim is to present a balanced perspective on the merits of a "buy the index" type of investment philosophy.

Skate.
 
1. ASX20 LOGO.jpg

Investing - Buy the ASX20
This investment approach involves spreading your capital across a range of sectors and industries, rather than concentrating all your eggs in one basket. For those just starting out and unsure of where to begin, this strategy offers a simple and accessible investment option to consider.

ASX20 Sector Breakdown
Financial Services: 38.6%
Basic Materials: 26.6%
Healthcare: 9.2%
Consumer Cyclical: 7.2%
Real Estate: 4.4%
Consumer Defensive: 4.1%
Industrials: 4.0%
Communication Services: 2.7%
Energy: 1.9%
Technology: 1.4%

4. ASX20.jpg

Skate.
 
If you're not trying to beat the index by doing something different to improve performance then you may as well buy an index fund or ETF. Saves on brokerage costs and less paperwork.

If I was doing something like this then I'd buy those going up and not those going down. Funds not used for any constituent stay in cash until the stock price starts to go up.
 
If I was doing something like this then I'd buy those going up and not those going down. Funds not used for any constituent stay in cash until the stock price starts to go up.

@peter2, you raise a fair point about the potential benefits of index funds or ETFs. If the goal is to avoid the complexities and costs of attempting to beat the market, then those passive vehicles can certainly be an attractive option.

Of course, your suggestion of "buying those going up and not those going down" is an intriguing market timing strategy. However this approach demands a high degree of discipline and can be quite challenging to execute successfully over the long term.

Skate.
 
@peter2, it's also been suggested - "Why not time the market" instead of a blanket start date"?

Adopting a "time in the markets" approach can serve as a viable alternative to the more challenging task of "timing the markets." Entering the markets at the optimal time can certainly be more profitable than not, as it allows investors to capitalise on market upswings and potentially avoid significant downturns.

Timing the markets
After all, waiting for the perfect time means never investing at all.

But to address your point about index funds or ETFs, the "time in the markets" approach I'm suggesting champions simplicity and gives you control over the investment decisions you want to make.

Skate.
 
@peter2, it's also been suggested - "Why not time the market" instead of a blanket start date"?

Adopting a "time in the markets" approach can serve as a viable alternative to the more challenging task of "timing the markets." Entering the markets at the optimal time can certainly be more profitable than not, as it allows investors to capitalise on market upswings and potentially avoid significant downturns.

Timing the markets
After all, waiting for the perfect time means never investing at all.

But to address your point about index funds or ETFs, the "time in the markets" approach I'm suggesting champions simplicity and gives you control over the investment decisions you want to make.

Skate.
am more interested to see how your TOP 20 E/W goes against a passive Market Cap. ETF ( like ILC or VLC ) ( and against your current live experiment )

' perfect time' is fairly rare , but ' good enough ' ( say the XJO under 7000 ) is not so rare

there is much to consider on market entry .. investor age , investor goals , risk tolerance and funds availability . 6 months in a term deposit MIGHT be a great strategy at the time
 
am more interested to see how your TOP 20 E/W goes against a passive Market Cap. ETF ( like ILC or VLC ) ( and against your current live experiment )

' perfect time' is fairly rare , but ' good enough ' ( say the XJO under 7000 ) is not so rare

there is much to consider on market entry .. investor age , investor goals , risk tolerance and funds availability . 6 months in a term deposit MIGHT be a great strategy at the time
@divs4ever, sometimes "Good Enough is Good Enough"

My suggestion is 'Simplicity Over Complexity' and the ongoing results of this exercise will be a deciding factor if this idea resonates with others. I started trading when 'Term Deposits' were decreasing. A return of 6% meant I would never run out of money and not consume the principal. The ASX20 investment strategy returns double that figure.

Skate.
 
No one with certainty can pick the bottom or dip of the market, that is why I think it's important to pick quality stocks that can weather the storms in most markets. EFTs have their place but I think most of them are overpriced and you still have to deal with tax issues. Too many people are trying to be one-hit wonders and instos tend to target this area of trading.
 
No one with certainty can pick the bottom or dip of the market, that is why I think it's important to pick quality stocks that can weather the storms in most markets. EFTs have their place but I think most of them are overpriced and you still have to deal with tax issues. Too many people are trying to be one-hit wonders and instos tend to target this area of trading.

@TimeISmoney you are absolutely correct - market timing demands a high degree of discipline and can be challenging to execute successfully.

Skate.
 
@TimeISmoney you are absolutely correct - market timing demands a high degree of discipline and can be challenging to execute successfully.

Skate.


Market 'timing' does not require buying the bottom selling the top. It simply requires buying low and selling high(er).

An ETF for all the reasons @peter2 has indicated is far easier and more efficient than handling 20 individual stocks, unless you are really going to vary those 20 stocks over time. If you are just buying and holding the same 20 stocks, I see little point...just buy the ETF.

For example:

Screen Shot 2024-05-25 at 3.51.15 PM.pngScreen Shot 2024-05-25 at 3.50.57 PM.pngScreen Shot 2024-05-25 at 3.49.58 PM.pngScreen Shot 2024-05-25 at 3.50.14 PM.pngScreen Shot 2024-05-25 at 3.50.27 PM.pngScreen Shot 2024-05-25 at 3.50.40 PM.png

I will (paper) trade this alongside your selections using a 'timing' approach if you are interested. Currently pays a 3.66% yield.

jog on
duc
 
Market 'timing' does not require buying the bottom selling the top. It simply requires buying low and selling high(er).

@ducati916, as I mentioned earlier, the "time in the markets" approach is not necessarily about trying to outperform the index through active trading. Rather, it's about maintaining a consistent presence in the markets over the long run, and recognising the power of compounding when you stay invested.

The point I was making is that market timing, requires a high degree of discipline and can be quite challenging to execute successfully over the long term. The "time in the markets" philosophy aims to sidestep the difficulties of constant monitoring and decision-making that come with market timing.

Skate.
 
A return of 6% meant I would never run out of money and not consume the principal.
i remember that time , but wasn't particularly well funded to participate , while not living pay-check to pay-check i was living about month to month ( with a small surplus )

however this is now , can i ( and newer investors ) catch up using the hindsight of others ?
i doubt in will be effortless , but maybe not excessively time-consuming either
 
An ETF for all the reasons @peter2 has indicated is far easier and more efficient than handling 20 individual stocks, unless you are really going to vary those 20 stocks over time.

@ducati916, I hear your point about the potential benefits of index funds or ETFs. As @peter2 remarked those passive vehicles can certainly offer simplicity and cost-effectiveness. I thought I had addressed @peter2 point about index funds or ETFs when I said - "I was championing simplicity which gives you control over the investment decisions" any time in the future. ETFs and Index Funds don't allow this flexibility.

However, the "time in the markets" approach I'm suggesting isn't necessarily about trying to outperform the index through active trading. Rather, it's about maintaining a consistent presence in the markets giving freedom to modify your strategy at any time be it individual positions or collectively. It's all about freedom of choice.

The beauty of this philosophy is that it doesn't require the constant monitoring and decision-making that comes with market timing strategies. By avoiding the temptation to jump in and out based on short-term fluctuations, investors can focus on the bigger picture and potentially achieve solid long-term returns.

Where I differ is that the "time in the markets" approach champions simplicity and gives you more control over the investment decisions you want to make, compared to a passive index fund or ETF. With this approach, you have the flexibility to adjust your strategy as your needs and preferences evolve.

Skate.
 
are just buying and holding the same 20 stocks, I see little point...just buy the ETF.

@ducati916, the key advantage of this exercise is its simplicity. Allocating the same dollar amount to each ASX20 constituent avoids the complexities of stock picking or trying to time the market. And as your circumstances evolve, you have the freedom to rebalance or reallocate as needed.

Skate.
 
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