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My strategy/plan going forward

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RbNEO

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Hi Everyone, so I've been getting back into investing and taking it seriously and was curious to get your thoughts on my rough investing strategy/plan going forward. I'm in my late 20s, planning for a standard retirement in my 60s. I'm primarily saving the money I have now for a house deposit as I want to move in but will save any additional money I have for my portfolio which I'll list below. My risk profile is medium to high, around 6-7/10 on a rating scale.-

Keep in mind, I plan to invest 15-20% of my monthly pay from work into my portfolio (dollar cost averaging). Let's pretend it's $1,000 per month for the sake of example.

This is what I was thinking of doing roughly (is subject to change):

Index funds/ETF/Individual stocks:

- Vanguard S&P 500 ETF (VOO)
- Vanguard FTSE Global All Cap Index Fund
- Ishares Core S&P/Asx 200 ETF ASX: IOZ (though I believe this overlaps with the S&P500 to some degree?
- 3-5 Individual stocks which I'll need to do proper research for (not thought out yet, the idea here was to gamble a bit but not spend more than I can afford to lose)

I would put 80% of my $1,000 allocation per month into this section ($800).

With that $800, 80% of it ($640) will go towards the 3 ETF's/index funds and the rest towards the individual stocks. This does dilute it quite a bit if I have 5 shares but would likely just have 1-3 individual shares to begin with.

The 20% left over ($200) would go towards the following:

- Bonds (I know there are different type of bonds, I need to refresh my memory a bit with this but was looking at doing mainly government bonds and corporate bonds)

- Reits (I'm not mentioning real estate on this post on purpose but I was looking at investing in this as part of my diversification strategy. I was looking at investing in 1-2 different reits as opposed to a REIT etf, though I'll need to do a bit more research on the individual stocks)


Other information:

- I'm not too worried about dividend payments on individual stocks as I view it as a bonus. (Let me know though if you feel like this is an important aspect for me to look into more)

- I will set aside 3-6 months of emergency funds

- In terms of the brokerage side of things I was looking at Stake and CMC for smaller purchases

- I'm sure I've forgotten something but that's all that's on my mind atm but keen to hear everyone's suggestions.
 

You've thought about this more than me. Good work.
 
seems like you respect money. That's a start.

my only comment, others may disagree, is to not sign up for dividend reinvestment. Make each income decision a new one... and your accountant will love you.
 
Dona Ferentes said:
seems like you respect money. That's a start.

my only comment, others may disagree, is to not sign up for dividend reinvestment. Make each income decision a new one... and your accountant will love you.
Click to expand...
I completely forgot about dividend reinvestment, good call there! When you say "Make each income decision a new one" do you mean a new asset class or a new stock? In regards to accountants will they like it in the fact that the more complicated my portfolio is the more they will charge more to manage my tax return for example lol?
 
no, not really. DRP is lazy thinking, each 6 months look afresh at what you want to invest in. circumstances and markets change.

Each asset purchase forms a new capital base. record keeping is a challenge. keep it simple
 
This is very interesting. I was reading the other day that your generation is increasingly using ETF's as a means of entering the market as opposed to boomers who chose either stocks like CBA or BHP on the one hand or penny stocks in the mining and oil sector in our day.

I will follow your progress. All good decisions and ideas thus far.

gg
 
Dona Ferentes said:
no, not really. DRP is lazy thinking, each 6 months look afresh at what you want to invest in. circumstances and markets change.

Each asset purchase forms a new capital base. record keeping is a challenge. keep it simple
Click to expand...
Some good comment.

In addition, this is a logically researched plan by you.
Results cannot be backtested so you will not know wether its
under or over-performing.
I think you should have some form of determination of the above.
which will bleed into the Highlighted comment from DF.
 
RbNEO said:
. My risk profile is medium to high, around 6-7/10 on a rating scale.-
Click to expand...
nearly everyone's is. It's designed that way.
VOO and Ftse Global would have overlap (?) ; not many ASX shares feature big in global indexes

I'd do international passive and try for more active locals. Broad market exposure shares I hold include SOL for top end and MIR for small caps ... but up to you
these are small amounts. I'd do 1x internat exposure and one ASX @ $500 a month, then following month I'd do the other international and another ASX .
bonds? why if you're holding 3-6 months cash
REITs. your home will be good exposure, and you'll be geared.
RbNEO said:
Other information:

- I'm not too worried about dividend payments on individual stocks as I view it as a bonus. (Let me know though if you feel like this is an important aspect for me to look into more)
Click to expand...
don't let this be a distraction... main thing is to keep invested money silo'ed , and reinvest. And you'll discover franking credits. wonderful things
RbNEO said:
I will set aside 3-6 months of emergency funds.
Click to expand...
ok

just my thoughts. No advice. I hold LICs but don't hold ETFs
 
Thanks for your advice there much appreciated! It's gotten me thinking in terms of things I can do differently/improve on. With REITs it was more just of a diversification thing, but it's more on the lower priority of things on my list.

With my small monthly investment I might even have to consolidate initially towards the index funds, and leave individual shares out of it for now unless my income or monthly investment amount increases.
 
Last edited:
ETF's didn't exist when most people here , I think , started in this game .
These things have made investing so much easier with their great company diversity and spread of risk . A particularly good way to hold U.S. shares , I think . Shares in the land of Oz , on the other hand , will take up a lot more of your time . Franking credits loose a bit of their charm once you're out of the 30 % marginal tax bracket but , I don't fret too much about that , anymore .
Dividend Reinvestment ? Don't bother with it . Same with REIT's , although I do hold . You can teach yourself to become your own accountant , too . I'm always amazed that most Aussies think it's too complicated to do their own tax returns . If a dumb- arsed ex tradie like me can do it on his own , well anybody can ! It's tedious and time consuming , I'll admit , but the ATO website will teach you in plain english every damn thing you need to know about calculating profits , CGT ( Capital Gains Tax ) , Takeovers , Partial Takeovers or anything you can even think of , to do with shares and tax . I do a paper tax return with extra bits of paper with all my calculations attached , so my good buddies there , can see what I've done and hopefully not rope me in , for yet another friendly desk audit .
Hope it helps , cheers .
 
I believe you should make as much Money as you enjoy Making and Avoid Jail at all times
This might be a bit above your Pay-Grade atm but The Good news is "The First 10 Years is the Worst"

I should know because I have lost 2 Ships and 1 Wife

Some even say "I am Addicted to the Sea"
 
Thanks for that, much appreciated!
 
Hey all, I just had a question. I was doing more research and it seems that I can't use Vanguard to invest in the "Vanguard S&P 500 ETF (VOO)" etf for example so I have to use an Australian based brokerage. Though vanguard only charges a annual fee instead of a fee every time you trade like others brokers (I'm looking at interactive brokers atm) is there another way to go about this or no because this is Vanguards product and it's their pricing structure?

I plan to invest once a month so wasn't sure if the fees would add up. From the research I've done looks like it might be $30 a year, versus vanguard at $0.49 a year, assuming $3000 was invested in total in the entire calender year. Not a big deal but if I can do it more cost effectively I may as well do it.
 
Unless you are dead set on using Vangaurd just use IVV. The return will very similar. Min parcel size for any trade on ASX is $500 so you may have to do it bi monthly to fit with your $ allocation. As I said above if you use Stake broker it will be $3/trade.
 
I thought you can buy fractional shares? I am looking at other brokerages like IBKR and looks like you can? Also since the VOO index is US based, isn't that seperate to the asx?
 
RbNEO said:
I thought you can buy fractional shares? I am looking at other brokerages like IBKR and looks like you can? Also since the VOO index is US based, isn't that seperate to the asx?
Click to expand...
Both VOO and IVV track the same index the SP 500. Sure you can use IB to buy fractional shares but you introduce FX risk and also no HIN. Keeping it local imho justs keeps it simpler.
 
rolly1 said:
Both VOO and IVV track the same index the SP 500. Sure you can use IB to buy fractional shares but you introduce FX risk and also no HIN. Keeping it local imho justs keeps it simpler.
Click to expand...
Ah I see, I see what you're saying. Thanks for that info! So in general I guess any US etfs I want to invest into I should look for an Australian equivalent for simplicity? I guess with individual shares that would be different, I would be introducing fx risk? With no HIN, I'm not too familiar with that what did you mean?

One other thing, isn't IVV us based so it wouldn't be local? Bit confused there.
 
HIN

Holder
Identification
Number

meaning the ASX/CHESS identifies you as the beneficial holder

otherwise they would mostly likely be held in a trust structure

but you would have to dig into the fine print ( some ETFs do NOT hold any shares at all , only derivatives reflecting indirect exposure to the share movement , normally they are called 'synthetic ' )
 
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