Long-term option (10-15 yrs)

[SpaceMonkey]

Hoping for a few opinions!

I have some leftover borrowed funds from an IP purchase - around 7K.

Rather than pay back into the mortgage, I want to use for other income-producing purposes.

I am looking for a moderate risk, longer term option, favouring growth over income.

Basically something that in 10-15 years time me and Mrs Monkey can cash in for a nice return (perhaps roll into a banana plantation).

Tossing up between 2-3 shares or 1-2 managed funds (perhaps a low cost index option like vanguard australian index and international index)

Not really concerned that brokerage fees will be high for this small amount. would do this through e-trade.

What would you do if your foot was in my (space) boot?

 

[So_Cynical]

I would split it between 2 stocks, 1 slightly more risky and one not so...with the recent rally your options for a low entry point are very limited, you could very easily be buying into a top.

 

[prawn_86]

Hi SM,

You have to ask yourself if what you buy is going to yeild more than your mortgage interest rate year in year out. If not, as boring as it sounds, you are best just paying down your debt

 

[SpaceMonkey]

Hi SM,

You have to ask yourself if what you buy is going to yeild more than your mortgage interest rate year in year out. If not, as boring as it sounds, you are best just paying down your debt

Cheers for this prawnie. But its deductible debt held against an IP...

 

[stewiejp]

LIC or Banks would be what I would do for safe long term.

 

[ENP]

I think the education you would learn by researching and investing in your own stocks would far outweigh the benefits of just plonking it into a managed fund.

If you do it right, your return would be better in more ways that one.

 

[SpaceMonkey]

Having done a bit more research, considering buying three vanguard ETFs (VAS - ASX300; VTS - MSCI US; VEU - FTSE-Global (ex-US).

Costs look low, there's diversification and i can buy through e-trade.

Welcome views on this and a market timing question - should i hold off buying until the impending fiscal cliff fracas works its way through the US system?

cheers!

 

[prawn_86]

Having done a bit more research, considering buying three vanguard ETFs (VAS - ASX300; VTS - MSCI US; VEU - FTSE-Global (ex-US).

Costs look low, there's diversification and i can buy through e-trade.

Welcome views on this and a market timing question - should i hold off buying until the impending fiscal cliff fracas works its way through the US system?

cheers!

Hi SM,

Unfortunately ASF members are not allowed to give financial advice unless they hold, or work under, an Australian Financial Services License. If you wish to gain specific advise please contact a licensed advisor. Members may be able to offer what they would do, but bear in mind it is not applicable to your individual situation

Thanks

 

[herzy]

LIC or Banks would be what I would do for safe long term.

Having done a bit more research, considering buying three vanguard ETFs (VAS - ASX300; VTS - MSCI US; VEU - FTSE-Global (ex-US).

Costs look low, there's diversification and i can buy through e-trade.

Welcome views on this and a market timing question - should i hold off buying until the impending fiscal cliff fracas works its way through the US system?

cheers!

My personal view is that all of the banks have run up hard in the last few months. Nothing is forever and I'd wait for them to come back down given global volatility of the last few years. Could probably make the same argument for indexes generally.

 

[tinhat]

A couple of stocks that I would personally look into if I was to mimic your circumstances would be CCL and CSL. I am not sure to what degree you are prepared to negative gear your investment though. I don't know what dividend yield you would target to generate towards the interest you are paying on your borrowings. The earnings growth outlook for banks is fairly flat so, unless you are making use of franking credits to gross up their high yields they don't offer much capital gain upside in the short term IMHO. If you were looking to take on a bit of risk (you are gearing up after all) then you might want to look into FMG.