IOZ - iShares CORE S&P/ASX 200 ETF

[KevinBB]

IOZ back on a longer term support line and close to the bottom of the channel. People seem to be pretty bearish out there on the overall economy and financial markets. With Jim Chalmers selling armageddon I have a feeling we might be close to a bottom.

I don't know about a bottom. I'm in two minds here. Maybe we'll see a base in the short term, yes, but looking out a little longer it becomes doubtful.

Governments around the world are doing funny things, I don't think we've seen the end of inflation, and earnings ratios (without being able to quote them) are still at relatively high levels. All reasons why we could see a lower equity markets over the next year or so. A reasonable upcoming earnings season will help, and might reinforce that base we're looking for, for longer term investors anyway.

My systems are still short equity futures, although not convincingly, and equity holdings are now under 40% of that particular account value. If the market rises, fair enough, but I won't be too out of pocket if it goes either way at the moment.

KH

 

[divs4ever]

Governments around the world are doing funny things,

that is a diplomatic way of putting it .

however i am mostly invested ( more than 90% ) despite my pessimism , i NEED to be in the game , the best i can do is reduce the risks faced ( and if the global economy goes to zero , i am in no worse a position to the guy with a billion sitting in the bank ) , i either go bust or have an epic 'average down' story to tell others later ( over my stashed cognac )

 

[KevinBB]

that is a diplomatic way of putting it .

I am ever the diplomat ... trying to stay clear of any political discussion.

We probably have different investment horizons. If I were still young and silly, I'd be putting every spare cent into IOZ, and then forgetting about the investment.

However, I'm way past that. My longer term investments are mainly for income in my advancing old(er) age, so returns need to be balanced with the need to preserve capital. I mentioned a little while ago (probably in another thread) that I've swapped my IOZ for banks, other large caps, and cash, effectively putting into practice my thoughts about how inflation will affect the markets, especially the less-well-capitalised stocks.

There may well be some bargains come this reporting season.

KH

 

[Sean K]

I don't know about a bottom. I'm in two minds here. Maybe we'll see a base in the short term, yes, but looking out a little longer it becomes doubtful.

Governments around the world are doing funny things, I don't think we've seen the end of inflation, and earnings ratios (without being able to quote them) are still at relatively high levels. All reasons why we could see a lower equity markets over the next year or so. A reasonable upcoming earnings season will help, and might reinforce that base we're looking for, for longer term investors anyway.

My systems are still short equity futures, although not convincingly, and equity holdings are now under 40% of that particular account value. If the market rises, fair enough, but I won't be too out of pocket if it goes either way at the moment.

KH

I'm thinking there's worse to come with World economies. It's probably a matter of how much worse and how much negativity is already baked into equity prices.

 

[KevinBB]

We've got the volatile month of October out of the way, with a reasonably good price increase after that shocking September.

Historically, if we don't look too deeply, November a bit of a placid month, with the long term average price movement somewhere between +0.8% and +2.2%, depending on your look back period.

The details, though, can be a bit concerning. As far as the monthly range goes, November is very similar to other months, with an expected range of about 6 or 7 percent.

The other concerning thing to me is that we still don't have a higher high, so the bouncing off recent lows doesn't look convincing at all, as shown on the attached chart (data from NABTrade, still not updated for October's close).

However, I'm a creature of habit, so I'm sticking with IOZ. The odds are that I'll get a better return from having a few dollars on IOZ than having those same dollars on a nag in tomorrow's Cup.

KH

 

[Sean K]

We've got the volatile month of October out of the way, with a reasonably good price increase after that shocking September.

Historically, if we don't look too deeply, November a bit of a placid month, with the long term average price movement somewhere between +0.8% and +2.2%, depending on your look back period.

The details, though, can be a bit concerning. As far as the monthly range goes, November is very similar to other months, with an expected range of about 6 or 7 percent.

The other concerning thing to me is that we still don't have a higher high, so the bouncing off recent lows doesn't look convincing at all, as shown on the attached chart (data from NABTrade, still not updated for October's close).

However, I'm a creature of habit, so I'm sticking with IOZ. The odds are that I'll get a better return from having a few dollars on IOZ than having those same dollars on a nag in tomorrow's Cup.

View attachment 148669

KH

I'm looking at this as a very long term play and buying near the bottom of this chanel seems relatively safe to me, even if the 4 Horsemen arrive. Above $26 support looks good to me. For now. Until those 4 Horsemen I guess.

 

[KevinBB]

I'm looking at this as a very long term play and buying near the bottom of this chanel seems relatively safe to me, even if the 4 Horsemen arrive. Above $26 support looks good to me. For now. Until those 4 Horsemen I guess.

Your chart certainly backs up your argument, but price is on the wrong side of that 200 day moving average as far as I'm concerned.

My mind seems to be in a permanent "bearish" mode at the moment. This interest rate thing has been on my mind for a couple of months, and I think we haven't seen half the damage it will do to consumer confidence as yet. As a result, I've steered my portfolio towards those entities which will benefit from this interest rate rise through increased margins, i.e. the major banks.

IOZ is probably a safer bet than banks are on their own, solely because of the diversification obtained by buying this ETF.

KH
(*** sitting on the fence ***)

 

[qldfrog]

Your chart certainly backs up your argument, but price is on the wrong side of that 200 day moving average as far as I'm concerned.

My mind seems to be in a permanent "bearish" mode at the moment. This interest rate thing has been on my mind for a couple of months, and I think we haven't seen half the damage it will do to consumer confidence as yet. As a result, I've steered my portfolio towards those entities which will benefit from this interest rate rise through increased margins, i.e. the major banks.

IOZ is probably a safer bet than banks are on their own, solely because of the diversification obtained by buying this ETF.

KH
(*** sitting on the fence ***)

But banks in Australia are mortgages and so at risk if market crash?
I mean RE crash

 

[KevinBB]

But banks in Australia are mortgages and so at risk if market crash?
I mean RE crash

Of banks in all the world, arguably the Aussie banks are the safest with the government imposed capital controls.

The other thing is that most, if not all, of the higher-leveraged mortgages held by the banks are insured, the insurance fee being paid by the borrower. Banks have never had it so good! If there was a real estate crash, I'd take it as a bank buying opportunity.

The four horsemen moment mentioned by @Sean K , if it does occur, could well be the current government introducing a "bank tax". First talk of that and I'd consider selling.

KH

 

[Belli]

Like STW, A200 and VAS, it's an index fund using float-adjusted market capitalisation. It don't give a damn about a company going broke. WBC blows up (which almost happened) then another company will replace it.

 

[divs4ever]

Like STW, A200 and VAS, it's an index fund using float-adjusted market capitalisation. It don't give a damn about a company going broke. WBC blows up (which almost happened) then another company will replace it.

but doesn't that only benefit you if you buy the dips ?? , when the failing business(es ) drag the index down for a short time , normally the replacement company is no 'rising star' either

 

[Belli]

You should change your nick as you are actually have trader mentality if I can call it that.

Index investing in its pure sense takes no account of market dips or other gymnastics. It is intended to continually invest whenever funds are available irrespective of market conditions. The downside of ETFs is they are listed and priced continually during trading hours as a consequence. That in turn panders to the speculative instinct which you have acknowledged in your post.

What are index funds

What are index funds

www.vanguardinvestments.com.au

 

[divs4ever]

You should change your nick as you are actually have trader mentality if I can call it that.

Index investing in its pure sense takes no account of market dips or other gymnastics. It is intended to continually invest whenever funds are available irrespective of market conditions. The downside of ETFs is they are listed and priced continually during trading hours as a consequence. That in turn panders to the speculative instinct which you have acknowledged in your post.

What are index funds

What are index funds

www.vanguardinvestments.com.au

i spent a large part of my early life with various forms of ( non-market ) gambling , and am trying to swap strategies without totally ignoring opportunistic that might arise

and yes the trend in ETFs you mention can make them momentarily more attractive ( a cheaper buying price , slightly improves div. yields

one thing i have learned from the multi-millionaires i have met is PENNIES COUNT ( and accumulate ) , maybe that is a trait of millionaires still climbing the rich list ladder ( haven't got around to yachts , private jets , and chauffeurs , yet )

 

[Belli]

You simply don't get it which isn't surprising.

Ponder this. The Oct2021 distribution for VAS was $1.41. The Oct2022 distribution for VAS was $1.45. That is a 3.6% increase.

With me so far?

So how did my income increase by 10.6% in respect of those two distributions where there were no:

• sales involved;
• following of trends;
• charting or other arcane issues
• concerns whether or not the ETF was attractive?

Apologies to others for thread derailment.

 

[divs4ever]

well my VAS holding increases ( since the end of 2011) via participation in the DRP

whereas ETF SYI has moved along because of
A participation in the DRP

B. strategic timing of a reduction move and later an additional buy move

i try to find a strategy that suits the investment ( best for me )

 

[Belli]

As I said, and expected, you don't get it.

I'm out of this thread.

 

[KevinBB]

IOZ is intended to be a quiet / lazy type of investment ... hoping to bring a bit of that back to this thread.

I think the important words in this post are:

It is intended to continually invest whenever funds are available irrespective of market conditions

All this does is to highlight two different investing styles. No one is right, no one is wrong. Its just two different styles of investing.

The pure index investor will choose IOZ, and place any spare cash in that ETF, as returns over time should (in theory) match those of the index. This style of investing was largely invented (IMHO) by Jack Bogle and the Vanguard type of investment.

The F.I.R.E. movement was responsible for further popularising this style of investing, and was really responsible for me, many years ago, finding IOZ and placing amounts into this ETF on a regular monthly basis (back in the days when I worked for a living).

Others (like @divs4ever and myself) may choose to increase or decrease holdings of IOZ according to their investment plan, and that may be solely to collect dividends or chase capital gains, just as they do with other ASX listed equities, and as I do with banks, other stocks, and IOZ.

Which is the best style of investing? I've got no idea, but I know what suits me at my time of life, just as others know what style suits them. I guess the debate will continue on and on for many years after I've turned to dust.

KH

 

[divs4ever]

i have nothing against the F.I.R.E. movement ( except i discovered it AFTER i was retired ) in fact i quite respect their aims and support for each other .

my strategy is to put ( new ) money where grass is the greenest at the time ( IMO ) , but then being retired , i have more time to watch and think about the market movements , a professional ( in most fields ) is much better off throwing cash at investments in a way less demanding of their time ( and keep earning on their day job ) , some go the Financial Adviser path , others go with monthly buys on existing holdings . .. one size rarely fits all in investing

but i still like to save that penny where i can

cheers

 

[Belli]

This style of investing was largely invented (IMHO) by Jack Bogle and the Vanguard type of investment.

The first American ETF was listed by State Street in 1993 (the very first ETF was listed in Canada in 1990.) Bogle while at Vanguard rejected an approach by Nathan Most, who invented the ETF concept, who at first hoped Vanguard would list it.

Bogle actually hated ETFs as he viewed them as encouraging trading which he viewed as a losers game. He did soften somewhat by saying nothing wrong with broad based ETFs as long as you don't trade them.

As I have said in other threads, I have held an ETF (STW) since 2002, which, for some crazy reason I cannot remember, I swapped for VAS when it listed and later added VGS when it came along. Have done nothing but add since then - no DRPs.

Their last distribution provided me a five figure income with minimal effort on my part. My investment approach, also applied to the SMSF, is a good income through continually accumulating with little effort on my part but that isn't a temperament which suits everyone.

 

[KevinBB]

IOZ is my choice (again) in the monthly tipping competition.

First, some facts:

• On a ranking basis, IOZ has out-performed throughout the year. Three times (Jan, Mar and Jul) IOZ was ranked in the 6th decile, but for every other month IOZ has ranked at better than 50% in the final rankings. Twice (Feb and Jun) it positioned 6th, 8th in May, and most other months in the mid to low teens.
• On a returns basis, IOZ has delivered a satisfactory performance against other competition participants. Of the 25 entrants who submitted selections for at least 8 months, IOZ ranks eighth (*) as of close of trading today, and has a positive (just) balance of $10,027. Of the 25, 8 entrants have positive balances, the rest, well ... not so good.

So, as I see it, I have two choices: choosing good old dependable IOZ, or choosing a different stock each month, which is likely not to perform as well as IOZ. For the old conservative fuddy-duddy that I am, its an easy choice to make.

KH

* Assuming $10,000 bank balance at start of year, invested in the entrant's selection for the month, each month.

* I have attached a table showing my calculations for returns for the year to date. Names have been hidden to protect the innocent. Looking forward to seeing the tables produced by @debtfree when the year finally ends.