nulla nulla
Positive Expectancy
- Joined
- 24 September 2008
- Posts
- 3,588
- Reactions
- 133
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'.
It isn't rocket science Julia. Case study now. ANZ bank are now $16.30. ANZ Shareholders have now been offered new ANZ shares through the share purchase plan at $14.50, this represents a fully franked yield of 7%, grossed up 10%. (and that is after the dividend cuts)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.
I wasn't aware we were discussing share purchase plans, Bill. Thought the comparison was between buying for yield versus buying for capital growth.It isn't rocket science Julia. Case study now. ANZ bank are now $16.30. ANZ Shareholders have now been offered new ANZ shares through the share purchase plan at $14.50, this represents a fully franked yield of 7%, grossed up 10%. (and that is after the dividend cuts)
So if you can buy 15K worth of ANZ and pull a 10% grossed up yield plus pick up $1 or $2 capital gain in the mean time then don't you think that's a good idea? I will certainly be taking up my share purchase plan offer, it sure beats getting 4% in a bank deposit. Also I have an ultra long term view, all the banks will prosper again in the future just like they have always in the past, the capital gains will eventually come.
It's a hazardous market isn't it? I have made a cautious, measured re-entry since the uptrend was reasonably clear.
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'.
Hello Ray: yes, I get the different mindset thing. Presumably you consider you have more than enough capital and it doesn't matter if it's eroded somewhat.Julia, it's just a different mindset... the time for accumulation and saving has past, it's time to enjoy life, grandkids, hobbies, travel... now are you going to buy TLS (with 8% dividend) or something else with 2% dividend....
I know from other posts that you got out of the market at pretty much the top, that is truly an outstanding effort, well done. Were you equally as astute to get back in when the market hit 3111 when it was down some 55%? Unfortunately I am neither good at picking tops or bottoms so tend to buy when stocks are beaten down, I managed to slip in a small buy on March 9th but that was just pure luck. Since hitting that low point the market has already jumped 30%. CBA hit $24 2 Months ago, it has jumped a whopping 50% since then. Accumulating good stocks that pay good divies for the long term when prices are really beaten down is my real game. This strategy has worked quite well for me over the years and still funds my current retirement.Back to ANZ as discussed with Bill: if you sold this at or around $30 when the market started to fall away, you could re-enter with twice as many shares, therefore double the dividend income now.
To me this makes more sense over both the short and longer term.
Hi Bill, No my timing wasn't that good at all. I didn't sell until beginning of 2008 (peak of market was November) so gave back some profits by January.I know from other posts that you got out of the market at pretty much the top, that is truly an outstanding effort, well done.
No. When I reinvested the capital I did so in the knowledge that I would almost certainly miss the bottom. Well, that is if we have indeed seen the bottom. Again I'm not necessarily sure that's the case.Were you equally as astute to get back in when the market hit 3111 when it was down some 55%?
And that makes a lot of sense.Unfortunately I am neither good at picking tops or bottoms so tend to buy when stocks are beaten down, I managed to slip in a small buy on March 9th but that was just pure luck. Since hitting that low point the market has already jumped 30%. CBA hit $24 2 Months ago, it has jumped a whopping 50% since then. Accumulating good stocks that pay good divies for the long term when prices are really beaten down is my real game. This strategy has worked quite well for me over the years and still funds my current retirement.
Hello Ferret, I watch AFI, ARG and MLT quite often but I have a slight problem with them. Their basket of shares are calculated only once a Month, usually at the end of the Month. From that point you got to make rough calculations yourself to try value the stock. Most of the time these 3 are trading at a premium, people are willing to pay more for the stock than it's NTA. That is why I haven't taken on a LIC, they nearly always trade at a premium so you are actually paying more than what it's worth. In the case of an index fund, they are valued everyday, you know exactly what the basket is worth. STW for example gives a daily fund update to the market.Surprised LICs haven't had a mention in this thread yet. I think they are a great investment for retirees or anyone willing to sit it out for the long term.
This is very important and you have done well to be in this situation. Personally I think that position is the end game. In other words nothing to worry about anymore. No one can knock this position, it is healthy and safe and most of all it pays all your bills.I don't want to have to work again. I've established a level of capital where even if interest rates fall further I can still live on the interest.
Throughout this whole market collapse I always had some cash on the sidelines, not much though. I have an emergency reserve that I do not touch but on March 9th. that small entry I did was my last 2K before hitting the emergency reserve. Since then some divies have come in and have built up my cash again. I used this last run up to cut a dog stock so I have a bit more cash than I want right now. I have been hoping for a correction to deploy this lot. Whenever I have have excess cash to my requirements I look for an investment opportunities and stocks still look pretty reasonably priced at the 4,000 mark on the all ords.So it sounds as though you always have cash reserves with which to buy the beaten down bargains?
Once again Julia, thanks for sharing your thoughts, good luck to you too.
I don't want to have to work again. I've established a level of capital where even if interest rates fall further I can still live on the interest....
I've bought three stocks so far and am content to sit aside from anything else for now.
Anyone else? We can all learn from this sort of exchange of views.
John Burr Williams' - The Theory of Investment Value“Earnings are only a means to an end, and the means should not be mistaken for the end. Therefore we must say that a stock derives its value from its dividends, not its earnings. In short, a stock is only worth what you can get out of it."
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?