Retirees - what are your top 5 long term stocks?

[Muschu]

Hi Muschu what made you choose IVC as a long term hold?

What's the old saying? "There are 2 things you can't avoid "death and taxes".

I will never become rich via IVC but maybe they're an OK defensive stock. Hope so. I am well in front.

Rick

 

[Muschu]

If you know what their business is, I don't think you'd be asking that question!

Rick, they do have a fairly high level of debt. This doesn't worry you?

Hi Julia

Very good question and one I always research. In my mind the performance [and SP relativities these past few years] has been quite good.

As I recall I read on the IVC thread, a long time ago, that Nick Radge holds IVC in his SMSF. And he is far more in tune with the market than I am.

However - you may be right.

Regards

Rick

 

[Muschu]

Hi Muschu, half my portfolio is still in the big 4 banks. I was buying them madly during their lows and bought into every share purchase plan. They have doubled in price since hitting their lows, the dividends keep on coming in and I continue to hold. At these levels though my buying stopped a long time ago. I have also taken a position in Telstra recently as once again too much doom and gloom has been priced into the stock currently. The Telstra dividend is also very healthy. I also hold some hybrid stocks and convertible shares which were all purchased at under face value. I also put in for 2 lots of PERLS V, one in my name and one in my wife's. I think that interest rates will be going up soon and then that sector might take off too, good luck.

Hi

As a personal and layman's view I can't see what TLS offers other than a good dividend and a far too volatile SP over a long period. This is not a stock that suits me.

Tomorrow, or over time, I may be very wrong.

R

 

[nunthewiser]

MTS been mentioned here yet ?

gotta be one of the most boring stocks on the ASX over the last 2 years ....

great for the pacemakers

i hold

 

[Muschu]

MTS been mentioned here yet ?

gotta be one of the most boring stocks on the ASX over the last 2 years ....

great for the pacemakers

i hold

Not as boring as TLS............... I have often looked at MTS. Strikes me as a good defensive stock. I guess my reservation is whether they can, long term, hold up against the "power" of a WOW - in a duopoly I don't personally like. Nothing to do with investment.

 

[Julia]

Not as boring as TLS............... I have often looked at MTS. Strikes me as a good defensive stock. I guess my reservation is whether they can, long term, hold up against the "power" of a WOW - in a duopoly I don't personally like. Nothing to do with investment.

That has been my reason for leaving MTS alone too, Rick.
Btw, hasn't your NVT done well in recent months!

I'm waiting for a pullback on ORL to buy. Have been wary about retail stocks in the recession that we're not actually having, but suspect this end of the market is probably unaffected by such inconveniences as cash shortages.

 

[Muschu]

That has been my reason for leaving MTS alone too, Rick.
Btw, hasn't your NVT done well in recent months!

I'm waiting for a pullback on ORL to buy. Have been wary about retail stocks in the recession that we're not actually having, but suspect this end of the market is probably unaffected by such inconveniences as cash shortages.

NVT has been outstanding Julia -- I've heard it said that there may be merit in trading in fields you figure you have some understanding of - and education is a big part of my background. NVT has done nothing but grow [fundamentally] since floating and the SP [in my view] had to come to recognise this. If they can crack further overseas markets [as the CEO has said they intend to do] I believe they will keep growing.

I agree with you about most aspects of retail and don't quite get how WOW has got to its present SP. I don't have many and don't plan to increase. You'll note however that I also hold JBH and DJS -- these seem better. Also bought a tiny quantity of TRS -- not so confident here but will hang on.

Hope all is good young lady.

Rick

 

[Muschu]

.....
I'm waiting for a pullback on ORL to buy.... QUOTE]


Just had a look at this Julia. Nice hike after recent announcement. If it comes back to "the gap" then it looks excellent. Thanks for pointing it out. Be good to get in before it goes XD too.

Maybe Oroton is what people are buying now -- instead of the usual truckload of Argyle diamonds...

 

[awg]

Morning folks,

ORL and NVT both came high on the list of stocks I have been examining for my Franking credit strategy.

In fact ORL was No1 ( use several criteria, FF credit only one scan criteria)

I just couldnt come at buying a handbag company, especially as it seems so discretionary in times of possible economic turmoil.

Went up 19% the following day

NVT, the thing that worried me a little is the trashing of Oz reputation that is going on, especially in India, not sure what effect that may have on earnings, as I have not yet done any in-depth research on this company


MTS do own, is very defensive, also high on scan criteria, like WOW

I would not be too concerned about WOW out competing them , as they have a different strategy, that is a franchised niche market.

Have observed how well they have done with start-ups in my area.

ACCC keeps a good eye on WOW, and I imagine any overt moves to crush competitors would draw a complaint.

"GUY" over 9%, I'll take that, have had, and expect a few % growth here and there.
Never will set the world on fire, but look at their track record

Hybrids have been doing OK for the defensive sector of my portfolio, 10 to 20% ROI, over the last 6 months, expect 7 to 10% yield over next 12 months.

cash component is holding my overall performance back.

question, what do other retirees believe is an acceptable average return, year on year?

In my case 10% on entire portfolio, after tax and all other costs is acceptable, dont need too much risk overall

 

[nioka]

question, what do other retirees believe is an acceptable average return, year on year?

In my case 10% on entire portfolio, after tax and all other costs is acceptable, dont need too much risk overall

By taking advantage of the GFC i suggest that anything under 100% this year is failure.

I suggest that in normal years a 10% is well below par. The average fund will achieve this most years and that is after they take out ENORMOUS charges, pay themselves more than they are worth and have proven not to be all that good. I expect that a 25% return for a properly researched investment fund is par for the course.

 

[awg]

By taking advantage of the GFC i suggest that anything under 100% this year is failure.

Thanks for the response

For retirees in a moderate growth pension phase on their entire investment?

congrats if u get 100%, dont do what the herd do,
I suspect I wont be lonely with the other failers, if thats the benchmark!

I suggest that in normal years a 10% is well below par. The average fund will achieve this most years and that is after they take out ENORMOUS charges, pay themselves more than they are worth and have proven not to be all that good. I expect that a 25% return for a properly researched investment fund is par for the course.

as above, 25% yr on yr for any sort of fund would outrank Warren Buffet.

checking todays Fin Review,Super Pension funds majority negative for 3 yrs... dont know if many claiming 10%+ over 10yrs?

take yr point about well researched funds, as they say though, especially for the mug, last yrs best can often be next yrs worst

 

[Muschu]

CER, CNP,VPG,LYC, BUL,

Very interesting indeed. Are you retired Nioka?

Regards

Rick

 

[Garpal Gumnut]

RIO saved my bacon during the crash.

I sold everything at some loss and switched into RIO.

Getting back up to three again as a result.

RIO is a little beauty. I prefer it to BHP.

I'd also mention ANZ, MOS, CVN and WOW.for those retired or just old and tired.

The middle two are speccies.

gg

 

[Julia]

In fact ORL was No1 ( use several criteria, FF credit only one scan criteria)

I just couldnt come at buying a handbag company, especially as it seems so discretionary in times of possible economic turmoil.

Oh you chauvinist. Who cares what they produce? I made the point earlier that ORL is probably directed at that socio economic group which are happily unaffected by the downturns. There are always going to be plenty of people with plenty of money.

Went up 19% the following day

See what you get for your bias, awg?

NVT, the thing that worried me a little is the trashing of Oz reputation that is going on, especially in India, not sure what effect that may have on earnings, as I have not yet done any in-depth research on this company

Doubt it will have any appreciable effect. The international waters will be smoothed and NVT will continue happily. If you just respond to the price action on the chart you don't need to worry about the background too much imo. I understand, though, that many people feel better if they do a lot of fundamental research.

Have observed how well they have done with start-ups in my area.

Again, that doesn't necessarily translate into increased SP.

"GUY" over 9%, I'll take that, have had, and expect a few % growth here and there.
Never will set the world on fire, but look at their track record

Is "GUY" a stock code? Etrade say not.

question, what do other retirees believe is an acceptable average return, year on year?

In my case 10% on entire portfolio, after tax and all other costs is acceptable, dont need too much risk overall

Doesn't what you're looking for here depend on your capital base?
i.e. a substantial capital base reduces the need for high % returns, allows one to be more relaxed, take fewer risks, whereas a smaller capital base means you have to make that money work harder.

So this raises another question of deciding how much is enough. When we look at the Storm thread, there were people there with already more than enough to generate a decent living until they died, but they still joined up with Storm and paid 7% commission for a shonky system which ultimately lost them everything. So it seems there are people for whom enough will never be enough, and they will always want more.

 

[nioka]

Very interesting indeed. Are you retired Nioka?

Regards

Rick

Yes, Tired yesterday and tired again today, that's retired.Been doing that for many years.
But seriously, yes.
Retired is doing what you want to do, so in that sense I have been retired for most of my life. The body has now crashed with age so I am now more retired than ever. This however gives me more time than ever to follow the stock market and laptop computers allow me to follow the market (along with ASF and HC etc) when I'm fit enough to go fishing. I treat each day as the first day of the rest of my life. I don't have many quality years left and I hate to waste a minute of them.

I start the day checking my many stocks, one by one. I decide if they are still on track fundamentally. I look to see if I still consider them value at the current price. The only reason I use charts is to decide a possible price if I decide to sell some or buy more. I break many of the "rules".

Over the years I have noticed a change from "investing" in a company to "trading and speculating" in the share market. There is a "casino" atmosphere. There has developed a culture where charts that really only reflect the past are used by traders to predict the future. This type of activity creates a situation where fundamentally sound companies are oversold. Companies that have corrected problems which created past "charts" are oversold on past performance but are underpriced for their current performance.

Take CER for example. A fundamental analysis tells me they are worth at least 50c and have a potential of possibly $1 yet I was able to buy them as low as 2.3c ( I missed the low of 1.6c). There are many others like CER.

Even a stock like ADI is a multi bagger for me while some people are calling them a dog. I have traded them and turned an initial investment in them from a few thousand shares to a few hundred thousand shares. It was simple and this can be verified by a check on the ADI past threads. ADI was in partnership (still is) with AUT and EKA in oil exploration. The relative prices of the three continually change and it is possible to switch from one to the other and increase your interest in the activity. eg. I recently traded 150,0000 ADI for 300,000 EKA followed up by selling the EKA and buying back 300,00 ADI with the proceeds. A gain of another 150,000 "freebie" ADI.

I am serious when I say that this GFC and the lemming factor GFC combination have been responsible for creating the best investment opportunities I have ever seen. All one needs to do is research and think outside the square.

 

[Muschu]

Yes, Tired yesterday and tired again today, that's retired.Been doing that for many years. But seriously, yes....
......This however gives me more time than ever to follow the stock market and laptop computers allow me to follow the market (along with ASF and HC etc) when I'm fit enough to go fishing. .......

It sounds as though you very much enjoy what you are doing Noika and good on you for that. You seem to give the market a lot more time than I do but, again, if that gives you pleasure then great!!!
However I can't imagine taking my laptop fishing. My mates would rib the hell out of me...
Regards

Rick

PS_ Feel free to PM me next time you find a grossly undervalued stock.

 

[Muschu]

Morning folks,

ORL and NVT both came high on the list of stocks I have been examining for my Franking credit strategy.

In fact ORL was No1 ( use several criteria, FF credit only one scan criteria)

I just couldnt come at buying a handbag company, especially as it seems so discretionary in times of possible economic turmoil.

Went up 19% the following day

NVT, the thing that worried me a little is the trashing of Oz reputation that is going on, especially in India, not sure what effect that may have on earnings, as I have not yet done any in-depth research on this company .......

Strange creatures we men, yes? The second strangest gender perhaps.. I admit that my first reaction to ORL was along the lines of your own. But when I had a look at it I could see Julia's reasoning... So I am keeping it in the radar.
As for NVT: Every annual report [to my knowledge] has been better than the one before. The SP held up superbly during the worst of the downturn and following the Indian uproar. At that time I found no mention of this education company in the press - just small-time shonky players. Could student unrest be a factor in the future? I imagine this is possible but I can't see it having an enduring effect unless parents cease seeking quality overseas education for their children. And Asian parents, in particular, place enormous emphasis on their kids' education.
Recall also that Australia is only one sphere of influence for NVT. [ am pretty confident that all colleges are on Uni campuses]. They began with one college in Perth and now have several in Australia. However they have added Africa, Sri Lanka, the UK. And they have announced that they are investigating in-roads into other countries including the USA.
Their website www.navitasworld.com will tell you just how many colleges they presently have. I think it is around 12-15.
This is, in my opinion, an exceptionally professional outfit, with great prospects ahead.
I could be wrong!!
Regards

Rick

PS - Again I refer you to comments I have made previously in this thread about NVT.

 

[awg]

Is "GUY" a stock code? Etrade say not.

"GUY" refers to "Grossed up yield"..ie DIV + franking credit, in reference to Metcash

Doesn't what you're looking for here depend on your capital base?
i.e. a substantial capital base reduces the need for high % returns, allows one to be more relaxed, take fewer risks, whereas a smaller capital base means you have to make that money work harder.

So this raises another question of deciding how much is enough. When we look at the Storm thread, there were people there with already more than enough to generate a decent living until they died, but they still joined up with Storm and paid 7% commission for a shonky system which ultimately lost them everything. So it seems there are people for whom enough will never be enough, and they will always want more.

Very true, also depends on whether you want to leave assets to children, which probably contributes to many, including Stormers, over-reaching... seems a common selling point by financial planning companies, not just to live free of penury in old age.

Just interested in what benchmark return, if any, other retirees use.

My figure was based on my expenses, plus inflation, and to continue to build asset base. I live a modest lifestyle

 

[Julia]

The other question which I think is important and worth discussing is the value we place (or don't) on capital preservation.

I always have in mind a base level of capital where I know that - even with very low interest rates - if I convert completely to cash, I can still generate more than enough to live on.

Doing this eliminates that ghastly fear that markets will keep on dropping, more even than the recent 50%.

The fact that so many people didn't consider this has resulted in many delaying their retirement plans or going back to work.

Then when the market resumes an uptrend (and acknowledging that one is very unlikely to buy back in at the bottom, so accept giving back initial potential profits) your capital will buy many more shares than if you'd held through the downturn.

The downside of this strategy is if you're still in the accumulation phase, you have to cop the CGT on the sales. Not a high percentage at 15% or less if held more than 12 months, but it can still result in a quite high payment to the tax office.

However, once moved into an allocated pension, this is no longer a consideration.

I'm interested in other views about this.

 

[Muschu]

The other question which I think is important and worth discussing is the value we place (or don't) on capital preservation.

I always have in mind a base level of capital where I know that - even with very low interest rates - if I convert completely to cash, I can still generate more than enough to live on.

Doing this eliminates that ghastly fear that markets will keep on dropping, more even than the recent 50%.

The fact that so many people didn't consider this has resulted in many delaying their retirement plans or going back to work.

Then when the market resumes an uptrend (and acknowledging that one is very unlikely to buy back in at the bottom, so accept giving back initial potential profits) your capital will buy many more shares than if you'd held through the downturn.

The downside of this strategy is if you're still in the accumulation phase, you have to cop the CGT on the sales. Not a high percentage at 15% or less if held more than 12 months, but it can still result in a quite high payment to the tax office.

However, once moved into an allocated pension, this is no longer a consideration.

I'm interested in other views about this.

[Any way of changing the thread title? My doing!]

Yet again you raise interesting questions Julia and I'll try a brief personal perspective.

In retirement, and in the pension phase, I have what I think is a common concern about capital preservation. [I still do part time consultancy work however].

Yes, I essentially moved out of the market during the downturn - later than many. Now I am pretty much back in but always leave enough cash set aside for living purposes for 2-3 years. [We live quite modestly and my 2002 Commodore will agree].

In re-entering the market I pretty much stuck to the ASX20. This has now expanded to the ASX300.

An issue for me was how to access quality advice to throw into the mix so that my investment choices could be [a] located by means other than randomness or the odd magazine, article or ASF comment; have some rationale attached to them; [c] avoid the ineptitude of most [can't say "all" - don't like generalisations] Financial Planners; and [d] avoid Managed Funds.

Nick Radge's website has been a great source of information for me. I know that his strategy and approach may not suit everyone but it has certainly suited us.

I've also found that the downturn we have experienced has actually removed most of the fear I had of the market. I retired in 2003 when the market became quite bullish. So it was a bit of a shock when it turned around. Now I am living reasonably comfortably with volatility and our investments are diverse enough that I hope not to have to run for cover in the near future.

Don't know if any of this makes much sense.

Regards

Rick