Retirement Stocks 2019

[Muschu]

Hi
Thought I'd see if there is any interest among retirees exchanging thoughts on stocks to hold for dividends and (usually) franking credits for income purposes.
This could be a very boring topic for many investors, and I am more interested in the views of those who have retired.
I'm 74 and my wife and I have a SMSF. 30% of this is in cash and earning very little of course.
The other 70% is in the ASX and generally very conservative. We have a small portfolio of other stocks but these probably make up only 5% of the total.
I'm thinking of placing more of the 30% into the market, over time, and would like to expand our conservative portfolio but am not sure where to head.
Currently our 3 largest holds are Listed Investment Companies. In order of investment allocation these are ARG, MLT and WHF.
The next 2 are WBC and WES.
And that's it.
Any other retirees out there who would care to share what they're up to?
Many thanks

 

[sptrawler]

My wife and I are in a similar situation and have the same dilemma, unfortunately IMO there are no easy answers, the market is very high and all other returns are very low. I have started buying and selling battery related mining stocks(nickel), with the hope of making some capital gains.
The backbone of my portfolio is NAB,WBC,WES,AFI and MLT, so in reality very similar to yours, I hold about 40% cash I'm very reluctant to put it in the market at this stage.
The other problem is as you age the drawdown requirement from your SMSF increases, so property in reality isn't an option as it limits the cashflow and takes a big chunk of money.
I am seriously considering pulling some of the shares out of the SMSF, then holding them in my wife and my personal names, this will give us the $36,000 tax free limits and also I would think qualify us for the low income offset. It is just a thought at the moment, but I will look into it over the coming financial year. I guess we just have to be grateful labor didn't get in, or we would be running down the capital very quickly with the current returns.
If worse comes to worse, the pension is always there, as long as you own your house it appears to be adequate, talking to friends who are on it.

 

[macca]

I sincerely believe that the best investment for any person is to buy there own house somewhere that they can retire to.

I am also retired, I have some super but I also live in a big house which suits the land.

When we are old and feeble we will downsize to a nice 3/4 bedroom house on a normal, easy managed block nearby and get a nice piece of tax free CG. Once we have spent that we can easily live on the pension if we had to.

I always thought that we would never qualify or need the pension but the breathtaking incompetence of the RBA and other federal money managers has put that in doubt.

It seems that the only thing on this planet that does not have cycles is the western economies.
Instead of having good times and the occasional bad times we now have to party on all the time.

The BB's had to struggle through 17.5% on housing loans and 25% OD rates when trying to get ahead and those of us who survived all that now have to cope with 0% interest rates on our old age nest eggs.

 

[Muschu]

Thanks for the replies. We are also fortunate that we own our house in Perth. However we're close to the point where it is simply too large. At the same time there are impediments to selling. To downsize we have to pay all of the usual costs, with stamp duty on a new purchase being a major outlay. In our area there are few downsize options [and we have no interest in building]. Because of a lack of supply, and the fact that we'd like to stay in this vicinity, we would be lucky to break even if we moved to a smaller home.
Our current location is not opulent but it's not far from the coast, which I enjoy. We've been in this house for 5.5years and, the property market being how it is, we would not expect a capital gain.
I've kept 30% of our super in cash for several reasons, not just market volatility. Sometimes there's a need to help other family members for example. But there's also reasonable stability to shares such as ARG and MLT. And the annual franking credit refunds go a long way towards private health care, council rates and the like - and also help to keep us off the pension.
Any other thoughts on shares would be welcome, but it seems the options are limited.
Health is another consideration of course. At the moment we're relatively OK but have some issues.
Being as prepared as is reasonably possible for whatever the future may bring is an interesting journey.

 

[IFocus]

Muschu great idea for a thread I am newly retired and just going through the down sizing process from 5 acres to a normal house.

I intend to keep my super simple-ish when I finally assemble all the funds from property etc currently just holding CBA, ANZ, WPL SPK and WES (30% of funds) mainly because I got them cheap some time ago.

Will get a bit more serious once I am fully funded will likely hold some cash on the side lines for any major market retracements.

Will likely hold cash outside of super for trading depending on time which currently is in short supply.

 

[Value Collector]

FMG, SYD are two that I like .

 

[Iggy_Pop]

I have been retired for just over one year and with experience have built a portfolio of -

ANZ, CBA, NAB, WBC - steady dividends about 30% of portfolio
A bunch of REITs - CMW, CMA, AVN, CIP steady dividends and capital gain - about 25% of portfolio, and most pay quarterly
Some LICs - WAM, PL8 - about 15% of portfolio. PL8 pays monthly
Some ETFs - IVV, VHY, VEU - about 20%, gives some international exposure and capital growth
I do have a few other individual shares which I do plan to move on and reinvest in either LICs or ETFs.

And also ANZPG - due to interest rates being low. I did notice CBA are listing a new hybrid share and this is an option in lieu of a term deposit which is worth considering

With these most months some dividends are received, and I find this handy tp pay the bills

Iggy

 

[Muschu]

Some good thoughts emerging here. Thanks team.
More from me soon.

 

[sptrawler]

Another thought I have toyed with as it seems like a "safe" option, is to use some of the 40% cash to add to the AFI holding and convert the AFI from dividend to dividend re investment.
My reasoning being the return will be much better, there is still a possibility of capital gain and they can be changed back to dividend if I need the cash income. If I don't need the income the capital is at least holding up.
By the way Muschu great idea for a thread, gets us old farts thinking.

 

[Muschu]

Iggy - thanks.
REITs I have never been into largely because of the lack of franking credits. However the dividends can be good. There seems to be a huge number of REITs on the ASX and many seem to have done well this year. How on earth do you choose among them?
I used to have several more LICs but disposed of them for several reasons. One was WAM which was not performing well and which has a high management fee [and a rewards fee if I remember correctly].
EFTs I don't understand although I know they are popular. Some seem to have some franking and the ones you have listed are not known to me. I will need to do some more checking.
And ANZPG is a complete mystery. Commsec doesn't show a dividend history from what I can gather.

 

[kahuna1]

Not retired ...

but conservative is my universe ...
MFF only listed fund ...
ANZ NAB WBC .... then a few BHP and WPL .... APA and SKI .... SGR ... TAH TCL COL WES .... CSL ... a lot more ... hmmm ... BEN a few ... same sort of spec holding at under 5% ... but not many right here, so under 2% total hold.

Some too high here ... a lot held for years like CSL and .... JBH ... a few of them ...
all large ... all have been around for ages, all pay decent sorts of dividends or make up with Share price going up reflecting assets. Not expecting too much capital appreciation but with a dividend of say 6% plus mostly franked so 8% ... it makes up for unlikely massive cap gains.

Tend to reduce into massive rallies as we have and and hold about 25% of the banks I once did 12 months ago, they are just coming back to some value as they shed 5-6% of late.

Have fun

 

[Country Lad]

Any other retirees out there who would care to share what they're up to?
Many thanks

My comments are more aimed at those people not yet retired and even a long way from retirement.
My message would be if the finances allow, start the investments as early as possible. That may not necessarily be shares. In my case it is shares but another noteworthy case is Tech/a’s property investing.

I started investing and share trading in the early 80’s – in the days when charting was done on a sheet of graph paper from the share prices in the AFR or Courier Mail.

I was fortunate to have a friend who was also my broker and we discussed and exchanged views on all things trading and investing on a daily basis. I treated the share trading totally separately from the investing and most of those investments I still have today giving me a good dividend income and on the rare occasions I divest a small portion, good profits.

One of the big advantages in those early days was actually talking to one another, whether it be other investors or people who had knowledge of companies I didn’t. Some of you may remember doing what is now unusual - discussing things with other investors face to face or on the telephone. The disadvantage then was that research was far more difficult than now with Dr Google always ready to help.

By exchanging views in this way I was able build up investments for the long term by buying into the Woodsides, CSLs, NCMs and many of the others I still hold. Holding a few board positions in various industries helped, like buying Westpac at a bit over $1 during Tricontinental debacle because I knew it would not be allowed to fail. Or by getting to know the gas industry and gaining good knowledge of OSH, WPL and STO in their early days of low share prices.

All that may be difficult to do in today’s market but my suggestion is for like minded people to get together, share information, pool research, ignore all the brokers’ reports. This was my success factor. Social media in my view may be the place to get hints but certainly not to find quality research. This place may be the best in the sea of confusion out there in the internet world.

Sorry, I have no message for those already retired or close to it, because in my 13 years of retirement so far, I am just playing with short term trading for the fun of it and to keep the mind active in my ever decreasing spare time.

 

[jjbinks]

30% in cash
Whether it's under the mattress, buried in the backyard or sitting idol in the bank it's an opportunity lost.

This is the first thing I was thinking about when I read the post. When Skate mentioned in his thread I thought I'd share my thoughts.
Firstly I am not a retiree.
Secondly, I do not have any experience or much knowledge about "asset allocation" which I guess what Cash vs Stocks comes down to.

But the fact is stocks are volatile. Although in the long run returns are >cash you occasionally have sometimes periods of negative return over consecutive years

So I would think that money you may use over the next 5 or so years should be kept in cash?

 

[IFocus]

Cash...I saw Skates post and agree but realise its not for everyone.

A important rule in investing, trading etc is the "sleep test"

That can change with education, knowledge, experience then there is age, circumstances, personal life issues, health issues etc.

No one rule will fit for everyone in regards to cash position but the "sleep test" should be a starting point closely followed by the "fun test"

IMHO

 

[Value Collector]

FMG, SYD are two that I like .

Not retired ...

but conservative is my universe ...
MFF only listed fund ...
ANZ NAB WBC .... then a few BHP and WPL .... APA and SKI .... SGR ... TAH TCL COL WES .... CSL ... a lot more ... hmmm ... BEN a few ... same sort of spec holding at under 5% ... but not many right here, so under 2% total hold.

Some too high here ... a lot held for years like CSL and .... JBH ... a few of them ...
all large ... all have been around for ages, all pay decent sorts of dividends or make up with Share price going up reflecting assets. Not expecting too much capital appreciation but with a dividend of say 6% plus mostly franked so 8% ... it makes up for unlikely massive cap gains.

Tend to reduce into massive rallies as we have and and hold about 25% of the banks I once did 12 months ago, they are just coming back to some value as they shed 5-6% of late.

Have fun

Oh yeah, add Apa to my list too, I have owned them since 2001, and enlarged the position in 2008 when they were selling at a 10% dividend yield (madness).

They are a great little gem in my portfolio.

 

[sptrawler]

Cash...I saw Skates post and agree but realise its not for everyone.

A important rule in investing, trading etc is the "sleep test"

That can change with education, knowledge, experience then there is age, circumstances, personal life issues, health issues etc.

No one rule will fit for everyone in regards to cash position but the "sleep test" should be a starting point closely followed by the "fun test"

IMHO

That is so true, I'm 64 this month and have been retired for 8 years, as you say Ifocus you have to be able to sleep at night.
Also if you are married, you may well be responsible for the other persons retirement, so even if the market goes completely pair shaped you need to have enough to enjoy your retirement.
As I always say, allow for the worst and hope for the best, you will never be rich but you will sleep well.
I wish I had learnt to trade well earlier, I'm finding it hard to learn it now and also with the amount of travelling we are doing, it is difficult to give it the time it needs.

 

[aus_trader]

This is the first thing I was thinking about when I read the post. When Skate mentioned in his thread I thought I'd share my thoughts.
Firstly I am not a retiree.
Secondly, I do not have any experience or much knowledge about "asset allocation" which I guess what Cash vs Stocks comes down to.

But the fact is stocks are volatile. Although in the long run returns are >cash you occasionally have sometimes periods of negative return over consecutive years

So I would think that money you may use over the next 5 or so years should be kept in cash?

Yes agree. Keep some cash. If recession or a deep correction hits then property, shares, LIC's, ETF's (except inverse ETF's such as BEAR) will get hit. In such a situation cash will be king.

Not retired, but approaching and I am weighted towards cash. Do a bit of short to medium term share trading and hope to be sufficiently skilled to continue it into retirement with a portion of funds that I have.

This thread has been quite informative and I may also park a portion of my cash into some of the conservative stocks/LIC's/ETF's for the long term.

 

[So_Cynical]

Good Topic.
I will retire early within the next couple of years and have been making some adjustments to the portfolio as i will be relying on dividends, credits and
cap gains mostly, set a new all time high dividend yield last FY / 5.4% gross, switched out of 4 or 5 stocks that didn't pay divs into stocks that did, still
hold 5 non div payers for the growth potential, hold all stocks in roughly equal position sizes.

I dont hold a single bank, BHP, RIO, CSL, FMG, SYD, WES or APA - none of them, i do hold one big LIC and 4 smallers ones that do things a little differently
and a managed ETF, hold many stocks pretty much all mid small and micro caps, some big div yields to be had along with the volatility both price and yield.

In retirement i have decided to simply keep doing what i have been doing in the markets for the last 12 years, it works so no reason to change much other
than keep getting better at it and be a little more conservative, keep the dividend focus turned up but keep exposed to growth. With interest rates so low and
going even lower, global growth and inflation low, housing asset bubble, growth stocks are in demand and will remain so, PET, ATP, Z1P, WTC and others still
going up, punters chasing growth, growth is rare in a low growth world.

 

[Belli]

One approach doesn't necessarily fit all I guess. Each does it in their own way.

For me I have been retired for close on five years but have been investing in the share market since way before then since the early 1990's. Have personal share holdings and a SMSF (a portion of which is in accumulation phase due to the 2016 budget .) The holdings of each are in slightly different proportions but are the same holdings:

ARG, MLT, WHF, MIR, VAS, VGS. VGS is about 20% of asset allocation both personally and in the SMSF.

Apart from swapping STW for VAS in 2010 I haven't sold anything since I cannot remember when. Buying when cash comes in surplus to my needs. Take up as much as I can of any SPPs the LICs may offer. Any tax refund I throw back into the share market asap - got by the previous year without it so I reckon why spend it?

Personal income is around 35% of my total income, ie dividends plus account-based pension.

 

[Belli]

Forgot to mention I also hold SOL outside of the SMSF. Not many only 7,000 but it does pay a dividend shortly before Christmas which does come in handy.