Retirees - what are your top 5 long term stocks?

[Nicks]

Rick - i'd go TOL over AIO. AIO too risky with its debt at the moment. TOL has next to bugger all debt and has stong growth strategies that it has proven in the past it is good at.

TCL - well you know my thoughts on this. People need to drive. They have a very predicatable cash flow down to the point where they virtually know how many cars are going to use the Toll booth each day.

 

[Muschu]

Rick - i'd go TOL over AIO. AIO too risky with its debt at the moment. TOL has next to bugger all debt and has stong growth strategies that it has proven in the past it is good at.

TCL - well you know my thoughts on this. People need to drive. They have a very predicatable cash flow down to the point where they virtually know how many cars are going to use the Toll booth each day.

Thanks Nicks. These past 2 weeks or so I added TOL, LEI and WOR [not in large quantities] to my portfolio. To date, over a very short period of course, TOL [where I bought at $8.05 and $7.55] has been good value.

 

[vciscato]

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.
I also am a retiree and manage a share fund for over 20 years. I look for undervalued stocks that pay a good dividend. If you intend to go with the heavyweights look at : SUN,AWC, FXJ, FGL, GPT, ZFX otherwise the following are good value: CGF, AHD, ALZ, ASL, CXG, DWS, GMG, HFA, NOD, TIM, APA, SIP.
Good luck,
Vic

 

[Muschu]

Hi rick.
I also am a retiree and manage a share fund for over 20 years. I look for undervalued stocks that pay a good dividend. If you intend to go with the heavyweights look at : SUN,AWC, FXJ, FGL, GPT, ZFX otherwise the following are good value: CGF, AHD, ALZ, ASL, CXG, DWS, GMG, HFA, NOD, TIM, APA, SIP.
Good luck,
Vic

Thanks for sharing all this info Pat -- it all helps. May I ask how many stocks, roughly, you hold at any one time. I just checked and have 14 supposed blue chips and 3 small specs. These are not all held in the same proportion of course. BHP and WOW are my largest. In the mix are also [????] WBC, ANZ, CBA and MQG. The first of these I've held the longest [2005] and am still marginally in front. The others are losers - at this time anyway. In my view it seems not too late to shed them and move elsewhere.
Good luck may be needed!
Thanks
Rick

 

[Julia]

Hi rick.
I also am a retiree and manage a share fund for over 20 years. I look for undervalued stocks that pay a good dividend. If you intend to go with the heavyweights look at : SUN,AWC, FXJ, FGL, GPT, ZFX otherwise the following are good value: CGF, AHD, ALZ, ASL, CXG, DWS, GMG, HFA, NOD, TIM, APA, SIP.
Good luck,
Vic

Vic, you describe these as 'undervalued'. Do you have a reason for thinking their 'true value' will soon be recognised and they will begin showing some growth, or are you picking them purely on the basis of their yield?

 

[vciscato]

Hi Rick,
I select stocks on the basis of technical analysis but also consider the fundamentals as well. Sure the yield must be around or above market average, it must not have too much debt, a history of increasing dividends and growth are all factors that are considered when deciding whether the stock should be purchased.

For example you mentioned TCL, I had this stock and sold it last year when it started to break support on weekly charts. I am still looking at it for purchase when the chart pattern looks more likely to rise than fall. The fuel price will cause people to use toll roads less and TCL will more than likely reduce its profit forecast in the future. the chart is certainly not bullish at the moment.

Cheers, vic

 

[Muschu]

An update:

Since this thread started I have learned a little, just a little, about how to read charts. I have to thank, but won't name, a few ASF members for their support in this.

I bought TOL, for example, after this discussion began and before I had a basic understanding of charts - and I bought at an average price of $7.97. They went up to about $8.60 or so and I thought this was pretty good. At the time I knew nothing of moving averages. Then I watched them come down - and down - and down to as low as $7.26 or thereabouts. So I sold them - at a loss. Could have been a mistake but there seemed a greater risk here than elsewhere.

Meantime I was trying to find stocks that looked good, over a long period, in terms of fundamental and technical analysis.

The only stocks that I have had for some time that I am happy with are BHP, WOW and RIO. Not many. Maybe QBE as well. [Interested to read that Nick Radge was considering QBE].

Over 3 years these shares have gone from [approx]

BHP $17 - $46
WOW $17 - $28
RIO $45 - $144
QBE $15 - $24.

The other shares I have, which include the banks, have done quite poorly.

I have recently added

LEI $10 - $50 in 3 years
CSL $10 - $39 [May be incorrect. I "think" there was a 3:1 split in the period]
WOR $8 - $39. [Don't feel as confident about this choice in the short term]

I am now considering, in lieu of my poor stocks, [can't just keep adding unless the $$ are limitless], and I don't have any of these at this time:

IPL $20 - $170 [staggering - can it continue?]
AAX $2 - $16
SGM $17 - 36
ORI $5 - $30
FLX $5 - $20
GCL $3 - $12.

Please note that these are approximate SPs only and are subject to correction.

I don't think any of the companies above are minor ones. Not sure re GCL.
There may also be an over-emphasis on resource or resource-related stocks here. Maybe the above list is too narrow in scope - lacks sufficient diversity?

Any comments from ASF-land? Suggestions? Criticisms? Other stocks to investigate?

Rick

 

[nioka]

Long term stocks for retirees seems the wrong way to go. Long term stocks are for those looking towards retirment and preferably looking a long way ahead. Today I hold over 20 individual stocks, none are long term. I'm retired (tired yesterday, tired again today so that makes me retired) so it is short term for me. So much so that the only reason I get the reduced capital gains tax is if a share keeps me on hold while I wait for the fundamentals to be understood by the masses so the price will rise. Even then I often trade the bumps so I still miss out on the reduced tax.

I hold some stocks eg, MCR (which I consider to be a great long termer) but when the price is right it will get cashed. At my age it is a sport as much as anything and to have to hold long term would be dull.

 

[Julia]

At my age it is a sport as much as anything and to have to hold long term would be dull.

This is where it comes down to the personality and preference of the individual, I guess. Nioka you find it 'a sport', whereas maybe Rick wants to set up a fairly 'safe' portfolio so he can then go off and do other things, only feeling obliged to check the shares when he feels like it. (Apologies if I'm being presumptuous here, Rick).

Personally, I like having a core bunch of long term stocks. However, if any of them suffer a life-threatening event, then they are out.

e.g. you have sold TOL, Rick. I'd have done the same. You can always buy it back if it does take off.

 

[Muschu]

This is where it comes down to the personality and preference of the individual, I guess. Nioka you find it 'a sport', whereas maybe Rick wants to set up a fairly 'safe' portfolio so he can then go off and do other things, only feeling obliged to check the shares when he feels like it. (Apologies if I'm being presumptuous here, Rick).

Personally, I like having a core bunch of long term stocks. However, if any of them suffer a life-threatening event, then they are out.

e.g. you have sold TOL, Rick. I'd have done the same. You can always buy it back if it does take off.

Quite right Julia. I want to go fishing, play with the grandkids, walk on the beach, watch the sunset -- and tinker occasionally with my portfolio. I'm trying to establish, as you know, the kind of p/f you describe. Nioka may wish to spend more time monitoring than I do. Personal preferences which we all respect.

 

[nioka]

Quite right Julia. I want to go fishing, play with the grandkids, walk on the beach, watch the sunset -- and tinker occasionally with my portfolio. I'm trying to establish, as you know, the kind of p/f you describe. Nioka may wish to spend more time monitoring than I do. Personal preferences which we all respect.

In between checking the shares and the forum I did go fishing ( no fish but a daddy of a mud crab) All you need is a lap top, a good boat and live at the waterside. The grandkids come for the fishing and the boat and when all else fails there is always the garden. A very wet day here ' hence the extra posts.
Fishing comes first and gardening second, the shares do come after both.

 

[brianwh]

Would be very interested to hear an update on these comments especially in light what has happened to equities over the last 12 months.

In my own case I bailed out from my FP in September last year and went SMSF. I have made some good priced acquisitions eg TOL $5.10, WES $16.90, WPL $28.00 and some not so good eg TLS $3.85. But I am also worried I may have missed some good prices particularly with the banks. I'm going to hang on a bit longer and hope to buy in the dips.

At this stage I only have stocks in the ASX Top 50 - typically the ones mentioned in this thread - and am aiming for 30-40% Australian equities in my Fund.

Love to hear what others are doing

Cheers

 

[Bill M]

Hello Brian, I held CBA and NAB and topped up on both through their share purchase plans. CBA at $26 and NAB at $19.99.

WES and TAH, also held all the way through and again topped up on the share purchase plans. The best SPP was WES at $13.50, total bargain that was.

The only one of my 5 picks I cut was WDC at $17.50. I have replaced WDC with STW an Index Fund that tracks the ASX 200. I am very happy with what I am holding now, cheers.

 

[brianwh]

The only one of my 5 picks I cut was WDC at $17.50. I have replaced WDC with STW an Index Fund that tracks the ASX 200. I am very happy with what I am holding now, cheers.

WDC looks like a good decision now Bill. I'm not too familiar with STW are they a general index fund?

Big question for me at the moment is how long to wait before I top up with banks - long term I would definitely want a bank in my top 5, probably WBC.

 

[ROE]

WDC looks like a good decision now Bill. I'm not too familiar with STW are they a general index fund?

Big question for me at the moment is how long to wait before I top up with banks - long term I would definitely want a bank in my top 5, probably WBC.

I would buy CBA over WBC I know all analyst said CBA reward ratio is not there and WBC offer better value ..my head are not wire the same as them....but one thing I know about banks is

NO ONE knows any of their books, Those who claim to know a lot about it either

A. They know something of the unknown
B. They know they don't know

it's complex web of derivatives, Credit Default Swap, Interbank lending, different type of loan books....my head spins just to think of it..

All it left is management and I buy banks based on management rather than the numbers and CBA management is tops.

Gail Kelly a bit of a crazy liers or she doesn't know what she is doing...
Just go back and watch some of the dividend questions people put on to her sometimes ago ...hmmm...
and I got some 25 years till retirement ..DOHHH

 

[So_Cynical]

WDC looks like a good decision now Bill. I'm not too familiar with STW are they a general index fund?

Big question for me at the moment is how long to wait before I top up with banks - long term I would definitely want a bank in my top 5, probably WBC.

The STW ETF (exchange traded fund) tracks the ASX200 so is made up of approximately 25% banks/financials.

Have a look at the latest holdings list http://www.spdrs.com.au/etf/fund/fund_holdings_STW.html

 

[nathanblack]

i think its a lifestyle choice. most retirees are looking for less volatility in earnings(divs) and SP, also a retirees timeframe is less than that of someone just starting out. so a portfolio tends to be more defensive, there needs to be cash on call for living expenses and holidays, term deposits for future living expenses, and a mix of dividend and growth stocks.

growth is more important than some realise, especially the young starting out trying to save for retirement. so many advisors try telling people hpw they can have $1mil for retirement if they follow certain steps.

they dont tell you that with inflation over a 20 or 30 year timeframe that your $1mil is worth closer to 300k in todays money.

you need the growth to outstrip inflation. me, im only young but i have a dream to retire within 5years and live a modest life in SE asia. by living there my expenses are lower and my portfolio needs to earn less.

a portfolio that can earns less, can either take less risks or have a lower capital(my case). but as i will be retired alot longer than most i need a portfolio with strong growth to allow for many years of inflation. after all i may be able to live of $20k earnings/year today but what about in 20years?

im taking some punts atm, because worst case it prolongs my early retirement by a year or so. best case it gives me an even earlier or luxurious retirement

 

[nulla nulla]

BBP
CNP
QTM
INT
VBA

Be prepared for sudden rises and falls, try to buy low and sell high. And be ready to cut and run at any moment.

 

[RayG]

At the risk of being branded a heretic, I think you should forget share price movements for all intents and purposes, the gain is only realized when you sell.

For long term, I would look at dividend returns more closely, and stick with blue chip that have a long term reliable record of good dividend returns.

Medium to long term, I would go with banks and resources. BHP, NAB, CBA, WPL. Don't forget TLS for % dividend returns, as I am reminded every time I get a phone bill.... !

Think in terms of being an part owner of the business you are investing in.


Regards
Ray

 

[Julia]

I will never understand the people who buy purely for yield, especially given the recent cutting of dividends by even the so called oh so stable big four banks.

That anyone will happily accept a loss of capital as the SP falls just because they're getting around 7% or 8% in yield is beyond me.

Nathan has very well described the need for continuing growth shares in any portfolio, even retirees'.