Dona Ferentes
Pengurus pengatur
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Called a barbell approach, I do something similar.
Called a barbell approach, I do something similar.I have found a few “Multi-baggers”, and had the conviction to be quite heavily weighted in them. But I still believe in index investing too, My super and an investment bond I hold are both 100% indexed into VAS, VGS and a property index.
I 100% believe it’s possible to beat the market average return, there are 3 main ways.
1, Applying more skill and emotional stability to the task than the average market participant.
2, Applying leverage.
3, Being Lucky.
Sometimes, people that benefit from number 3, make the mistake of thinking they used number 1, and can we really ever be sure? And number 2 can increase your returns, but also increases your risk, and if pushed beyond modest amounts can cause you to blow up.
The Market average return general proves to be a decent return over time, so even though I dedicate a decent portion of my capital to trying to beat that average, I see no problem with also holding quite a bit of indexed investments, if anything it’s insurance against me one day blowing up my direct portfolio.
Plus, I kind of like the idea of holding a broad cross section of the global economy, with the index I make money off almost every transaction that happens right across the world.
Yep, and quite a few of the internationals generate income here in Australia.Hello me.
Rough as guts calculation is my split is 60% OZ (LICs & VAS) / 40% International (VGS). I think some of the Oz holdings also have a smattering of international income.
oGood morning
No it wasn't rcw1 ha ha ha ha ha
Kind regards
No it wasn't you rcw but you know who it was, though.rcw1
am not so big on the high-conviction' bit , maybe because i am retired and can't guarantee a regular injection of new funds ( March 2020 taught me that when divs where trimmed and even cancelled on the payment date ( for one ) ( just because they are trickling today , there is no certainty in six months time )I have found a few “Multi-baggers”, and had the conviction to be quite heavily weighted in them. But I still believe in index investing too, My super and an investment bond I hold are both 100% indexed into VAS, VGS and a property index.
I 100% believe it’s possible to beat the market average return, there are 3 main ways.
1, Applying more skill and emotional stability to the task than the average market participant.
2, Applying leverage.
3, Being Lucky.
Sometimes, people that benefit from number 3, make the mistake of thinking they used number 1, and can we really ever be sure? And number 2 can increase your returns, but also increases your risk, and if pushed beyond modest amounts can cause you to blow up.
The Market average return general proves to be a decent return over time, so even though I dedicate a decent portion of my capital to trying to beat that average, I see no problem with also holding quite a bit of indexed investments, if anything it’s insurance against me one day blowing up my direct portfolio.
Plus, I kind of like the idea of holding a broad cross section of the global economy, with the index I make money off almost every transaction that happens right across the world.
The way I get around fluctuations in dividends with out having to make adjustments to my home life, is by having 5 years worth of “wages” in what I call my “wage fund” that pay out over five years. (I understand not everyone can be set up like that though).am not so big on the high-conviction' bit , maybe because i am retired and can't guarantee a regular injection of new funds ( March 2020 taught me that when divs where trimmed and even cancelled on the payment date ( for one ) ( just because they are trickling today , there is no certainty in six months time )
2020 could have been much better if all the declared divs were aid in full , on time .. but lesson learned ( i still did OK )
am not big on leverage either , maybe i am not sophisticated enough , maybe something rammed into me by my depression era parents
being lucky is nice but being able to discern luck from good judgment ( and skill ) is better
the main reason i abandoned the race-tracks was two nice winning outings caused by two unbelievable outcomes ( and worse i couldn't believe i put money THERE , one was a well drawn dish licker at 25/1 two favourites broke down the rest got into trouble , the time was the slowest in at least two years ( at least ) .... and said winner took 18 months to win another race ( on a minor country track )
but it turned a train-wreck of a night into a rather profitable night
PS although i backed it each way , i thought it barely had a place chance .. a three length win was totally unexpected ( and the very slow time hints it wasn't full of 'a magic substance ')
would prefer to cherry-pick the niches in the global economy ( several market fixate on capital gains ) especially currently
You need to start a thread where you condense books.I've been re-reading The Intelligent Investor it's the copy with Jason Zweig comments at the end of every chapter.
If the title of this thread is something that's on your mind, I would encourage picking up a copy, the ebook price is $18 or something.
I would summarise the message of the book as:
* There's two types of market participants: speculators and investors. The book isn't for speculators and discourages speculation beyond a small part of your overall net worth.
* There are two types of investors: conservative and aggressive.
* If you're a conservative investor, you should just be as passive as possible and invest in a mix of quality stocks and quality bonds. The mix shouldn't ever be more than 70/30 stocks/bonds or 30/70 stocks/bonds, and realistically given the unknowable nature of the future it should probably just always be 50/50 stocks bonds. When the book was written there was no easy way to buy the index, so there's some steps for identifying the portfolio of stocks a conservative investor should buy, about 30 different stocks with a long history of operations, dividend payments, profit etc. These days easier/cheaper to just buy the index.
* You need quality bonds in your portfolio just as much as you need stocks because the future is unknowable. Bonds will provide a stable return during lower/negative nominal growth periods and stocks hopefully return during higher/positive nominal growth periods.
* If you're an aggressive investor, you should only be investing if you realistically believe you can earn a 5%p.a. alpha over passive alternatives. Most people can't achieve this over the long run, for the reasons described in this thread, and therefore shouldn't really be aggressive investors, but if you want to it goes into detail about some mechanisms to do so. Most of those mechanisms described probably fall somewhat under a "value investing" umbrella, probably easier to just buy some shares in Berkshire.
Moral of the story, just buy 25% VAS/25% VGS/25% IGB/25% ILB and go do something more rewarding with your time.
You need to start a thread where you condense books.
I use to love reading. Go through about 10-15 books a year. Somewhere I got lazy or impatient and started reading Amazon reviews instead.I read a lot but mostly books that it would be an injustice to condense.
Financial history books (from Reminiscences of a Stock Operator through to When Genius Failed and onto contemporary The Bond King) can all be condensed into the following, apropos this thread:
A person or bunch of people believed they could "beat the market", leveraged up/took stupid risky bets/did crimes/took advantage of suckers/etc then they blew up spectacularly, leaving the public to eat the costs in a way that a commoner could never get away with, and did not beat the market, but either got rich anyway or died penniless anyway.
I was at the McDonald’s drive through the other day, picking up some French fries and a coke, and as I watched the cars in front of me tapping their cards and driving away with their bags of food, I realised there was about 20 ways my index funds made money from each maccas customer.
Maybe you would like Amazons “audible” subscription, I think you can try it free for a month, you can listen to books as you walk or do the house work etc.I use to love reading. Go through about 10-15 books a year. Somewhere I got lazy or impatient and started reading Amazon reviews instead.
Too much fluff in a lot of books.
yes , broadly i have the same mindsetFor me, I work on the basis with holding a large spread of Oz companies and International ones, all those employees are working for me even though they may not know it
A lot of it is just fluff. There's a few places that actually cut out the dribble and condense the book- for a fee. I haven't seen much new stuff that's been that interesting lately.Maybe you would like Amazons “audible” subscription, I think you can try it free for a month, you can listen to books as you walk or do the house work etc.
Mr Belli love it. I fear that you are not an orphan with this thoughtful post.I've never thought of it to that level of detail so it is an interesting approach.
For me, I work on the basis with holding a large spread of Oz companies and International ones, all those employees are working for me even though they may not know it.
Never held bonds though as some do. Not the slightest bit interested in them.
Have a cash buffer to cover future expenditure. With the account-based pension I have, I allocate 10% of it to give to my children and the rest goes back into the market. I essentially live off the dividends/distributions I receive from my personal holdings. Of course, compared with others my needs could be considered relatively modest bearing in mind I am single with zero debt and no one financially dependant on me. No wish for international travel or fine dining at $150 per head sort of thing. Essentially I do what I do without caring if others in my peer group approve of like it or not. I am not them and they are not me.
On that aspect, I do wish the Government and some organisations would cease admonishing me for being what they view as being too frugal. It's really none of their business how I wish to spend or not spend my funds. I am happy and content with my life so rack off.
Apologies for the rant and the thread drift.
i do what i can , at tweaking for a good outcomeabove average .... that would be most of us, then?
the trick is , if you decide to , is to buy when prices are low , which is NOT as easy as it sounds , you have fear and short-sellers running amok and hundreds of tempting targets ...which will bounce in say 3 years ( say APE ) and which will slide and slide and slide ( say RFG )Between you and divs, I might turn over a new leaf, Dona.
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