Retirees - what are your top 5 long term stocks?

[Muschu]

Hi
I hold about 15 stocks in my SMSF.
I'm looking at making a few changes to those stocks which are below my top 5 [by investment amount]. I buy for the long term but review as the situation requires. Dividends are a factor but by no means rule.
I'm not sure where to head if I make some changes and would be interested to know where fellow retirees see value for those of us in 'retirement mode'.
If you're interested in "sharing" then please respond. I'm always willing to learn - and take responsibility for my own decisions.
For my part my top 5 holds, in order of investment value, are
BHP
WOW
NVT
WBC and
QBE.
My current thinking on changes is to seriously consider
TOL or AIO -- and
TLC.
I'd be very grateful to learn what others in [or near] my situation are doig.
With thanks
Rick

 

[Julia]

Hi
I hold about 15 stocks in my SMSF.
I'm looking at making a few changes to those stocks which are below my top 5 [by investment amount]. I buy for the long term but review as the situation requires. Dividends are a factor but by no means rule.
I'm not sure where to head if I make some changes and would be interested to know where fellow retirees see value for those of us in 'retirement mode'.
If you're interested in "sharing" then please respond. I'm always willing to learn - and take responsibility for my own decisions.
For my part my top 5 holds, in order of investment value, are
BHP
WOW
NVT
WBC and
QBE.
My current thinking on changes is to seriously consider
TOL or AIO -- and
TLC.
I'd be very grateful to learn what others in [or near] my situation are doig.
With thanks
Rick

Hi Rick,

Can you say why you necessarily associate long term holds with retirement?
I'm not too far away from that phase myself but won't necessarily be managing my SMSF any differently, in that I intend to hold something as long as it's doing well, but drop it if it's not.

Re your top five, I also have BHP, WOW and QBE. Next two are LEI and WOR.
I don't know anything about NVT. What can you tell us about this and why it's in your top five?

I look at AIO from time to time but will give it more time before seriously thinking about adding it.
What is TLC? Search says no such stock!

Another couple I have had but am temporarily out of given the current chaos are MON and OKN. Will probably be back into both when confidence returns.

 

[Muschu]

Hi Rick,

Can you say why you necessarily associate long term holds with retirement?
I'm not too far away from that phase myself but won't necessarily be managing my SMSF any differently, in that I intend to hold something as long as it's doing well, but drop it if it's not.

Re your top five, I also have BHP, WOW and QBE. Next two are LEI and WOR.
I don't know anything about NVT. What can you tell us about this and why it's in your top five?

I look at AIO from time to time but will give it more time before seriously thinking about adding it.
What is TLC? Search says no such stock!

Another couple I have had but am temporarily out of given the current chaos are MON and OKN. Will probably be back into both when confidence returns.

Thanks for the response Julia.
Sorry, I meant TCL.... old age setting in? [TLC = tender loving care?]
Why does retirement make a difference for me?
I guess it's a very individual thing.
Initially I invested largely in managed funds which did quite well during the boom.
However as I became more aware of "fee issues", which were often non-transparent, I decided to go largely the direct share route. [Apart from a minor foray into platinum asia which I still hold].
I am working to establish, as best I can, a direct share portfolio that needs minimum change over significant periods.
I choose not to sit at my PC each day and trade / worry / hope.
I would prefer to fish, see my grandchildren and have a blue chip portfolio that, I am aware, will need to be re-visited from time to time but do not want portfolio monitoring to be consuming or, worse still, obsessive. I don't mind it being an "interest".
I've just bought and started to read an interesting book "How much is enough?" which appears to be largely in tune with what I know of my own philosophies.
One thing I do know is that I am not into maximum monetary profit at the expense of family, life-style and health.
Ok
NVT - I believe the long term prospects for international educational programs are grossly underestimated in our "global village". NVT has become the world leader since floating and are now in most Aussie states, the UK, Africa, Canada and soon - Singapore. FF dividends and dedicated proven management. They have pretty much locked themselves into pole position in a mammoth market and will, IMO, keep expanding from a well-researched base.
AIO - seems cheap [risky?] but would add diversification to my portfolio.
TOL - seems much safer, less debt-laden and under-valued.
TCL - dividend proved and able to carry debt.
The rest of our major portfolio [which is not huge so please don't consider me a major player] is in other banks, WES, WPL and [to a tiny extent] resource stocks such as OXR, SMY, TTY and AXO.
My understanding of LEI and WOR is that they're very "solid" although I am not a holder at this time.
MON and OKN I will research - thanks Julia.
Regards
Rick

 

[Bill M]

Hello Muschu, I have been retired for 7 years and live off my investment portfolio.

For me my top 5 are:

CBA and NAB: I have held banks for many years, they always pay increasing dividends and regardless of their present slump on the market they will always stay in my portfolio. As opposed to many others on the forum I was buying the banks again in this current slump as they are always a good long term investments.

TAH: No matter how hard times get Australians always like to drink, gamble and eat out. Every casino I ever go to is always busy, restaurants full and many gamblers on the floor, I doubt they will never go broke. TAH has always paid good dividends, even with horse flu last year the dividends kept on coming.

WES: As long as the world needs coal, locals go to Bunnings and we all need groceries WES will always be around. A well managed company and again very good fully franked dividends.

WDC: A top well managed Property Trust. Frank Lowey is the 2nd richest person in Australia, came to Australia with nothing and now has set up a multi billion $$ property Portfolio. Every Westfield store I go into is choc a block, there is a queue to lease a bit of area in those stores. With his assets around the globe and hardly any available leasing left this company is doing very well. Dividends are unfranked but this is one company I will never sell.

I go overseas sometimes for 6 Months at a time, with the above stocks I hardly ever need to look at them. If I do and the share prices are ridiculously low then I buy more providing everything is in order. Since owning them not once has any of the above companies ever defaulted on a dividend payment, hope that helps.

 

[josjes]

Although I am not a retiree, I have a SMSF. I might add that holding a well managed, proven performer of LIC likes ARG and AFI can be a part of your portfolio. Or an index fund like STW (ASX Top 50), there is study, can't remember it (but if you google it you'll find it), but there was one done in the US some time ago that clearly indicated that index funds over the longer term significantly outperform actively managed funds.
Also, ishares have International Index fund (ETF) covering diversified range of international markets and regions, I have them as well. (www.ishares.com.au).

Cheers

 

[Julia]

Correction to my earlier post:
Rick, you're not the only one getting the code wrong:
I mentioned MON. Should have been MND - Monadelphous.

Thanks for clarifying on TCL, Rick. Used to have this. I've just had a look at it - it's held up pretty well, hasn't it, and from memory has a good dividend.

 

[Muschu]

"Thanks for clarifying on TCL, Rick. Used to have this. I've just had a look at it - it's held up pretty well, hasn't it, and from memory has a good dividend."

Very good dividend Julia. [There is or was a TCL thread on ASF] I had this stock for a few years and was disappointed as it's growth was much slower than my other stocks. I sold last year. Although it's considered defensive TCL could [imo], if picked up again closer to the $6 mark, work it's way back to $8 while rerurning a good dividend stream. Given the change of market climate it is probably worth a go and not likely to contain the risk element of so many others. However I think today's price is too high.

The only things I'm really watching right now are QBE and NVT.

Rick

 

[rhen]

Like Julia, I am not quite there yet... Would encourage others to subscribe to this thread because it does make interesting reading and it does make one (iff me) look more closely at the portfolio. Glad you've only requested five...
CSL: head and shoulders above the rest
MQG: more risk than I'd like
CST: the result of a previous buy and hold philosophy which I have been selling down over the past few years.
NAB:
GDY: one for the future (one hopes)

In no way would I suggest this five as a retiree's recommended portfolio. I suggest there is no one size fits all solution. However, I do like Bill's selection.
I encourage others in a similar position to add to this thread.

 

[Julia]

CSL: head and shoulders above the rest

Rhen, what was the reason for the massive drop here from over $100 to under $40 in November? Certainly the whole market dropped, but that is astonishing.

MQG: more risk than I'd like

Yes, me too. Sold this when it was obvious it was going to be badly affected in the downturn.

CST: the result of a previous buy and hold philosophy which I have been selling down over the past few years.

I wasn't familiar with this one. Just had a look. Not surprised you're selling it down!

NAB:
GDY: one for the future (one hopes)

Another I don't know. It has done reasonably well until recent times, hasn't it.

Anyone else? We can all learn from this sort of exchange of views.

In no way would I suggest this five as a retiree's recommended portfolio. I suggest there is no one size fits all solution. However, I do like Bill's selection.
I encourage others in a similar position to add to this thread.

 

[Nick Radge]

A core holding in my portfolio is Invocare (IVC). People gotta die regardless of the economy. Harsh but true.

I'm about to add QBE. Apparently they are the only insurer that is willing to underwrite the new PI laws that ASIC have made as law for all financial services businesses as at July 1. Can't beat 'em, so buy their shares!

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[Gurgler]

Rhen, what was the reason for the massive drop here from over $100 to under $40 in November? Certainly the whole market dropped, but that is astonishing.

Julia re CSL they split 1 into 3 thus the $40 represents $120 on pre-split basis

 

[agro]

Hello Muschu, I have been retired for 7 years and live off my investment portfolio.

For me my top 5 are:

CBA and NAB: I have held banks for many years, they always pay increasing dividends and regardless of their present slump on the market they will always stay in my portfolio. As opposed to many others on the forum I was buying the banks again in this current slump as they are always a good long term investments.

TAH: No matter how hard times get Australians always like to drink, gamble and eat out. Every casino I ever go to is always busy, restaurants full and many gamblers on the floor, I doubt they will never go broke. TAH has always paid good dividends, even with horse flu last year the dividends kept on coming.

WES: As long as the world needs coal, locals go to Bunnings and we all need groceries WES will always be around. A well managed company and again very good fully franked dividends.

WDC: A top well managed Property Trust. Frank Lowey is the 2nd richest person in Australia, came to Australia with nothing and now has set up a multi billion $$ property Portfolio. Every Westfield store I go into is choc a block, there is a queue to lease a bit of area in those stores. With his assets around the globe and hardly any available leasing left this company is doing very well. Dividends are unfranked but this is one company I will never sell.

I go overseas sometimes for 6 Months at a time, with the above stocks I hardly ever need to look at them. If I do and the share prices are ridiculously low then I buy more providing everything is in order. Since owning them not once has any of the above companies ever defaulted on a dividend payment, hope that helps.

would have been burnt on that today -20%

 

[Bill M]

would have been burnt on that today -20%

Correct, it is what I call a "black swan" event, no one saw it coming. It is unfortunate and such an event can happen to anybody and with any stock. It is important to remember that none of new rules come into effect until mid 2012, a lot can happen in the 4 years to come. I would think they will manage their business accordingly. For now I will continue to hold this stock, however it is fair to say that it would not be one of my top 5 picks anymore.

 

[rhen]

Correct, it is what I call a "black swan" event, no one saw it coming. It is unfortunate and such an event can happen to anybody and with any stock. It is important to remember that none of new rules come into effect until mid 2012, a lot can happen in the 4 years to come. I would think they will manage their business accordingly. For now I will continue to hold this stock, however it is fair to say that it would not be one of my top 5 picks anymore.

Yes, Bill, an X factor where the factor should know better (I guess).
Does the Victorian Government understand the ramifications of their actions?
We really do need such events to occur to our market at this point in time?
http://www.bloomberg.com/apps/news?pid=20601081&sid=aPoaNVgV8sTE&refer=australia

 

[davo8]

CBA and NAB: I have held banks for many years, they always pay increasing dividends...

Past tense: have paid. They may survive the credit crunch, but the days of growth are over. Be grateful if the dividends aren't cut too.

TAH: Enough said. Hard luck!

WES: No growth for years, loaded with debt and a consumer downturn yet to come. Enjoy your dividends, if they last.

WDC: 20%+ below its top, another mountain of debt, and shopping centres very vulnerable to recession.

The entire finance/insurance/real estate sector is built on credit and leverage. It was fun while it was going up, but it isn't doing that any more. You can't really believe we've seen the bottom yet. Can you?

 

[Julia]

I'd have to agree with Dave08 on this.

WES is constantly mentioned as a "core stock". Why? Dunno, except that it's one of Australia's largest companies. But as Dave has pointed out, the SP has gone nowhere in two years.

Ditto the outlook for WDC. If the US is in recession - and there's no reason at this stage to imagine the outlook there is going to get better any time soon - then the level of investment WDC has in that country's shopping centres is unlikely to be very profitable.

 

[Muschu]

Hi
A personal review:
Long term holds do not necessarily equal forever. For me I hope it means at least reduced time spent in monitoring my portfolio.
Since this thread began I have sold nothing but bought a little. I am working towards my top holds being:
BHP
WOW
QBE
LEI [new]
TOL [new]
------------------
I "may", or not, add one or more of WOR, IPL, IVC, BBI.
I may also reduce my bank holdings -- not sure.

Thought I'd update as to where I am. Comments always welcome. I have found previous comments in this thread useful. Thanks.

 

[davo8]

Hi
BHP WOW QBE LEI [new] TOL [new]
I "may", or not, add one or more of WOR, IPL, IVC, BBI.
I may also reduce my bank holdings -- not sure.

The credit crunch is far from over. The USA is getting worse and worse; UK is following. Europe, Asia and Australia will at least get caught in the fallout.

It's called deleveraging -- resolution of excess credit, eventually by defaulting on debt. It is highly unlikely that banks and financials will prosper through this process and some may get hit hard, so they should form a smaller part of a long term portfolio. QBE and BBI could be affected.

We are likely to get some degree of economic downturn, and it could be quite severe. Defensive, low P/E, resource/energy/health are suggested.

These are scary times, quite unlike anything else the world has seen in many decades.

 

[YELNATS]

The credit crunch is far from over. The USA is getting worse and worse; UK is following. Europe, Asia and Australia will at least get caught in the fallout.

It's called deleveraging -- resolution of excess credit, eventually by defaulting on debt. It is highly unlikely that banks and financials will prosper through this process and some may get hit hard, so they should form a smaller part of a long term portfolio. QBE and BBI could be affected.

We are likely to get some degree of economic downturn, and it could be quite severe. Defensive, low P/E, resource/energy/health are suggested.

These are scary times, quite unlike anything else the world has seen in many decades.

I see this as unduly morbid. Although we're not out of the woods yet, we're all still breathing aren't we?

 

[davo8]

I see this as unduly morbid. Although we're not out of the woods yet, we're all still breathing aren't we?

Prudent, not morbid. The US banking system is insolvent, and running out of short term funds. The UK is following. Our RBA has already lent about $10 billion to stressed banks stuck with illiquid RMBOs and other paper. It will lend more.

Something very bad is going to happen in the USA within months, it will hurt the global economy and our major defences are housing and Chindia buying our rocks. A prudent long-term view would reduce exposure to all stocks, especially financials, and increase cash for at least the next 3-6 months. If China folds after the Olympics, head for the lifeboats.