The problem with total security is ...... BOREDOM. My main investment is in property. It is reliable and profitable but it is almost as boring as bank deposits. The stock market keeps my mind active well past the state of my body. It is a challenge and that is worth as much to me as any profit. I do agree that one should not invest, with risk, more than you are prepared to lose. That is why I trade/invest on fundamentals.
Retirees - what are your top 5 long term stocks?
- Thread starter Muschu
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The problem with total security is ...... BOREDOM. My main investment is in property. It is reliable and profitable but it is almost as boring as bank deposits. The stock market keeps my mind active well past the state of my body. It is a challenge and that is worth as much to me as any profit. I do agree that one should not invest, with risk, more than you are prepared to lose. That is why I trade/invest on fundamentals.
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Stick with property and splash out of tattslotto tickets, thats sort of excitng and cheaper.
Capital preservation ?
Just hope the kids move out and get jobs.
My grand kids have moved out from my kids home and have jobs. My investment plan does preserve capital. It actually is preserving other peoples capital too.
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Take some out and do a tour of Europe -
http://www.insightvacations.costlesstravel.com.au/html/european_classic.html
How times change..... I smiled when I found this old post... Haven't had any of the above for a long time....
Bill M
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Mine has changed a lot too. Apart from a portfolio of hybrids and capital notes I now mostly invest in ETF's in my Super fund.
All are high dividend Australian ETF's and I have them returning me gross 7 to 8% distributions. They cover all of my minimum drawdown of 4% (pension phase) and then some. I have bought ETF's to limit any losses in individual companies and I do not have to manage the funds, the ETF providers do that for a very small fee of between .25 and .35%
My top 5 holdings now are:
1. RDV (ETF)
2. VHY (ETF)
3. SYI (ETF)
4. AYF (LIC)
5. NAB
All are high dividend Australian ETF's and I have them returning me gross 7 to 8% distributions. They cover all of my minimum drawdown of 4% (pension phase) and then some. I have bought ETF's to limit any losses in individual companies and I do not have to manage the funds, the ETF providers do that for a very small fee of between .25 and .35%
My top 5 holdings now are:
1. RDV (ETF)
2. VHY (ETF)
3. SYI (ETF)
4. AYF (LIC)
5. NAB
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I have VAS which is down at present
Apart from that WES and TLS are the main ones for me
BEN has been disappointing ...
A few people I know are picking up BHP but I'm not so sure about that one.
Apart from that WES and TLS are the main ones for me
BEN has been disappointing ...
A few people I know are picking up BHP but I'm not so sure about that one.
Interesting Bill thank you. I have ARG, AFI and to a smaller extent MLT. Plus TLS, banks, WES - and very small holds in TCL, SYD and SGP.
The only "speculative" stock I have is HZR - the smallest of them all and maybe a punt but I've heard good comments / views from people in the sector.
I got out of BHP a long time ago - thank goodness..... Read an article suggesting iron ore could go to $35 so may BHP has further to fall. Add in their recent crisis.
Maybe RIO if ore does hit $35, but what will dividends do? And how far away will capital growth be?
Tempting but risky.... Maybe better held through a fund?
Bill where can I find info on the distributions please? I gather these are not ordinary dividends and they don't show as such on the Commsec website.
Interesting and scary to an extent seeing specific stocks mentioned as big, safe, steady and conservative a number of years ago and then seeing them now! BHP and WOW have both been well off there highs and crashing down and looking sick, TLS had its time in the sewer but has recovered some but lost its shine, and then the Banks, were are they headed???.
All it does for me is reinforce that using ETF,s and conservative LIC,s is a much less bumpy ride, sure you may be capping the potential huge upside of getting on a stock that goes up 3/4/5 times in a year or so, but you will also suffer less if a stock takes a hit and has a dramatic sell off, last thing you wont to be doing is jumping in and out of the market and trying to time your buys and sells with your retirement investments, Top 5 holdings for my SMSF are IHD, VAP, BKI, AYF, WDIV, all have good dividend yield and although most are down recently, far less than if I had individual holdings i bet, so im happy to hold for the long term.
All it does for me is reinforce that using ETF,s and conservative LIC,s is a much less bumpy ride, sure you may be capping the potential huge upside of getting on a stock that goes up 3/4/5 times in a year or so, but you will also suffer less if a stock takes a hit and has a dramatic sell off, last thing you wont to be doing is jumping in and out of the market and trying to time your buys and sells with your retirement investments, Top 5 holdings for my SMSF are IHD, VAP, BKI, AYF, WDIV, all have good dividend yield and although most are down recently, far less than if I had individual holdings i bet, so im happy to hold for the long term.
Bill M
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You have to go directly to the ETF's website and they quote the distributions there. Here is the one for VHY: https://www.vanguardinvestments.com.au/retail/ret/investments/etfs.jsp#distributionstab, cheers.
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My watchlist is:
ASX ETF - VAS, IOZ
S&P 500 ETF - VTS
LIC - ARG, MLT
Stocks - ANZ, WOW, TLS
and Cash.
I previously had BHP on the list, but Iron Ore fundamentals are basically a no forever.
I've looked at ASX (the stock), and am still considering whether to add it to my watchlist. But some numbers didn't quite pass the test, 12 ROE, 19 PE, 90% Payout Ratio = 7% FF Dividend and 1% Capital Growth = 8%. Also qualitatively the ASX margins are extraordinarily high and look to be gaining more competition.
I love researching and trying to add more stocks to the roster of options, so like hearing from others. Especially about 'Forward Looking' Blue Chips (Agriculture or Health as a bonus), as most Blue Chips' reputations are built from the past which can make it difficult to see any changes in the future.
ASX ETF - VAS, IOZ
S&P 500 ETF - VTS
LIC - ARG, MLT
Stocks - ANZ, WOW, TLS
and Cash.
I previously had BHP on the list, but Iron Ore fundamentals are basically a no forever.
I've looked at ASX (the stock), and am still considering whether to add it to my watchlist. But some numbers didn't quite pass the test, 12 ROE, 19 PE, 90% Payout Ratio = 7% FF Dividend and 1% Capital Growth = 8%. Also qualitatively the ASX margins are extraordinarily high and look to be gaining more competition.
I love researching and trying to add more stocks to the roster of options, so like hearing from others. Especially about 'Forward Looking' Blue Chips (Agriculture or Health as a bonus), as most Blue Chips' reputations are built from the past which can make it difficult to see any changes in the future.
Thanks Bill.
I have never really had a look at ETFs.... I gather most return about 7% in distributions but also there is no franking consideration?
Do you consider them a better investment than LICs such as AFI and ARG? These pay about 4% in dividends and are also fully franked.
I know most younger investors would consider all of these pretty boring but at my age I "boring" can leave me more time for other pursuits....
Rick
Bill M
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Yes there is franking consideration as well but before the end of financial year they are only estimations. Most of those ETF's are around 70% franked. So yes you get a bit extra on top. Then around about August they send you a tax statement showing exactly what the figures are. I have a Super Fund where I can buy ETF's directly into my super and they do all the imputation credits. For most FPO shares the imputation credits come immediately, with these ETF's sometimes they come at the end of financial year and my super fund deals with all of that. (They clearly show payments received)
As for LIC's versus ETF's, in my opinion ETF's are better. They buy the sector, in my case high dividend shares. They don't pick and choose and try and beat the market, they basically buy the market and add some extra rules. For example they can't just buy a stock this year because it paid a 10% dividend, it has to show a history of previous dividends and the ability to pay future dividends and in some cases show that they can increase dividends in the future.
With LIC's you have managers picking and choosing what they think is best. I have read countless articles of how around 70% of fund managers fail to beat the index, so for me I prefer ETF's. As a long term holder for income, I would not like to be picking my own stocks. Just imagine if I had 100K in BHP, I would have suffered massive losses if I didn't sell whereas with the ETF's those losses are nowhere near as severe.
I have this train of thought "why invest in one company to get a secure dividend when I can invest in several companies (via 1 ETF purchase) and get exactly the same or better dividend"? It just limits the risks of investing in individual companies, we have all seen it before. Market closes at 4 PM Friday and at 4:40 PM company *** makes an announcement, massive write downs, no dividends for the next 3 years, CFO terminated etc.. On Monday stock *** opens -50% down, you've done your dough.
Boring is good, I like it.
I am a newb but I have actually look extensively at some of the etfs listed and I am wondering based on the comments I am reading here whether you guys have too.
I am reading here that high div etfs like vhy, ihd, syi and rdv are more safer, are more diversified for a small fee.
But the underlying are all ASX stocks - and as we know the ASX is very top heavy and dominated by a few blue chips mainly in mining and financials. So for all of these etfs, 10 stocks or so (4 banks, BHP/RIO, WOW, TLS and WES etc) make up around 50-75% of your holdings depending on the etf. If you hold 20 stocks, you can pretty much account for 75 to 90% of these indexes.
This is not the best diversification and owning the different etfs like vhy and IHD will not fix this as the underlying are all the same anyway. You are also paying 0.25% to 0.4% to buy and hold a portfolio of 15 to 20 stock that will not change often. You might as well buy and hold these names yourself.
Also regarding LICs and active management - some of these LICs buy and hold the same blue chips for long periods. Also, if you look at the LIC costs, some have costs which are actually lower then these div etfs (afi is 0.18% to vanguard's VHY of 0.25%).
Keep in mind that much of the passive index movement (i.e. Bogleheads) literature is written for the US market which has proper cheap indexes that do proper diversification (i.e. look at SnP500 sector breakdown vs ASX300 sector breakdown) at much lower prices (0.3% is regarded as on the expensive end for passive investing for Bogleheads in the US, in fact the vanguard US Total Stock Market is like 0.05%).
I am reading here that high div etfs like vhy, ihd, syi and rdv are more safer, are more diversified for a small fee.
But the underlying are all ASX stocks - and as we know the ASX is very top heavy and dominated by a few blue chips mainly in mining and financials. So for all of these etfs, 10 stocks or so (4 banks, BHP/RIO, WOW, TLS and WES etc) make up around 50-75% of your holdings depending on the etf. If you hold 20 stocks, you can pretty much account for 75 to 90% of these indexes.
This is not the best diversification and owning the different etfs like vhy and IHD will not fix this as the underlying are all the same anyway. You are also paying 0.25% to 0.4% to buy and hold a portfolio of 15 to 20 stock that will not change often. You might as well buy and hold these names yourself.
Also regarding LICs and active management - some of these LICs buy and hold the same blue chips for long periods. Also, if you look at the LIC costs, some have costs which are actually lower then these div etfs (afi is 0.18% to vanguard's VHY of 0.25%).
Keep in mind that much of the passive index movement (i.e. Bogleheads) literature is written for the US market which has proper cheap indexes that do proper diversification (i.e. look at SnP500 sector breakdown vs ASX300 sector breakdown) at much lower prices (0.3% is regarded as on the expensive end for passive investing for Bogleheads in the US, in fact the vanguard US Total Stock Market is like 0.05%).
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Did a few exercises on ETF's a few years ago when the ASX was conducting roadshows along with some of the ETF providers.
Couldn't see any advantage in holding them, and having to pay for the privilege.
I found that in any of those there was always a few stocks that held progress back, stocks that you would have (should have) sold out of if held individually.
Interesting scenarios developing in the US related to some of these ETF type providers and where they are heading...
http://www.bloomberg.com/news/artic...e-nears-3-year-high-after-third-avenue-freeze
and
http://www.marketwatch.com/story/etfs-suffer-from-a-chessboard-problem-2015-11-05
Weekly chart of VHY below, click to expand.
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I've been researching these ETFs: https://www.marketvectors.com.au/Home.aspx
They add another layer of rules which may help performance in turbulent markets.
MVW - Invest in over 60 of the largest and most liquid ASX-listed companies across all sectors.
This could be a better approach than a traditional Aus Share fund or High yielding fund in the current environment, as you won't be overweight banks, miners, supermarkets etc.
MVS - most liquid dividend paying listed small cap companies. This is effectively a high yield, small cap fund. I like this concept in our current low rate environment. But this is a relatively new fund, so performance history is limited.
Has anyone else researched these funds?
They add another layer of rules which may help performance in turbulent markets.
MVW - Invest in over 60 of the largest and most liquid ASX-listed companies across all sectors.
This could be a better approach than a traditional Aus Share fund or High yielding fund in the current environment, as you won't be overweight banks, miners, supermarkets etc.
MVS - most liquid dividend paying listed small cap companies. This is effectively a high yield, small cap fund. I like this concept in our current low rate environment. But this is a relatively new fund, so performance history is limited.
Has anyone else researched these funds?
It's been a while since I posted here...
ARG, AFI, TLS and the banks have been our major holds... Pretty "boring" I know... There are others, but fewer off them: WES, RHC,
TLS has been very good to us but [and I know the banks have been struggling too] but TLS now seems to be just trading sideways in a reasonably good upswing.
Thinking of off loading about half the TLS into strong stocks that are unlikely to "die".. I don't seek maximum dividends and am comfortable with lesser dividends if the prospect [not a guarantee] of greater capital growth than TLS exists.
Stocks that come to mind include SYD, TCL, ASX, SGP, DMP, TTS, PRY, SHL, IVC come to mind.
Wondering if any retirees out there would care to share which stocks outside of the banks, TLS and the like you feel comfortable [at this stage] having as keepers?
Many thanks
ARG, AFI, TLS and the banks have been our major holds... Pretty "boring" I know... There are others, but fewer off them: WES, RHC,
TLS has been very good to us but [and I know the banks have been struggling too] but TLS now seems to be just trading sideways in a reasonably good upswing.
Thinking of off loading about half the TLS into strong stocks that are unlikely to "die".. I don't seek maximum dividends and am comfortable with lesser dividends if the prospect [not a guarantee] of greater capital growth than TLS exists.
Stocks that come to mind include SYD, TCL, ASX, SGP, DMP, TTS, PRY, SHL, IVC come to mind.
Wondering if any retirees out there would care to share which stocks outside of the banks, TLS and the like you feel comfortable [at this stage] having as keepers?
Many thanks
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What about some of the property trusts?
I have boring portfolio as well,
also consider if you have owned these stocks for a while you may well have dividends that have grown rather well,
I still feel TLS will be a good stock for the future, data is becoming more and more important and feel Telstra will provide this to consumers
Also long on AMP in particular as a turn around stock or takeover target
I have boring portfolio as well,
also consider if you have owned these stocks for a while you may well have dividends that have grown rather well,
I still feel TLS will be a good stock for the future, data is becoming more and more important and feel Telstra will provide this to consumers
Also long on AMP in particular as a turn around stock or takeover target
