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Take the 2008 free fall for example, if you were to have invested in January you would have had very little capital left by April 2009.
Anyone can pick times, dips and peaks, and winning stocks with hindsight. If there is one thing about all the 'experts' on ASF they all have such wonderful hindsight.
When predicting the future - everyone is stumped. You just have to look past the June stock tipping competition to work that out.
Let's revisit this thread in 6 months time and see if sc is in fact up at least 10% and if the investment would be been better off earning 6.51% in the bank.
Take the 2008 free fall for example, if you were to have invested in January you would have had very little capital left by April 2009.
Anyone can pick times, dips and peaks, and winning stocks with hindsight. If there is one thing about all the 'experts' on ASF they all have such wonderful hindsight.
When predicting the future - everyone is stumped. You just have to look past the June stock tipping competition to work that out.
Let's revisit this thread in 6 months time and see if sc is in fact up at least 10% and if the investment would be been better off earning 6.51% in the bank.
Wouldn't it be more meaningful to quote your buys in terms of capital invested, given widely varying share prices?
So , instead of quoting a buy of 1000 shares in XYZ, you quote $10,000 invested in XYZ.
What I'd be interested to see, say at the end of 12 months, is if you have e.g. $100,000 invested, the % return on that capital. It would just offer a clearer picture of what actually matters.
On a 12 months basis, you'd obviously include dividends and franking credits so as to provide a proper summary of what you've earned on your initial investment.
The small gains and losses, month to month, sometimes don't mean much over a longer period, especially given the present volatile market.
If I assume a equally weighted portfolio and track it against the ASX 200 it should be interesting to see the results over the medium to long term.
It would also be interesting to get any input from any other points of view to see any correlation between different investment techniques. Or if anyone wants to put up a alternative portfolio?
CBA $50.50
CSL $32.50
JBH $19.59
MCE $4.95
FGE $4.05
FRI $1.40
ASX 200 4694.90 20/10/2010
Ok here is my 6 at today's close (i own stocks with *)
- BPT 0.615*
- CPU 9.71*
- TSI 0.665*
- PTM 4.75*
- CIF 1.15
- APN 1.95
Robusta's starting portfolio.
198 x CBA @ $50.50 = $9999.00
307 x CSL @ $32.50 = $9977.50
510 x JBH @ $19.59 = $9990.90
2020xMCE @ $4.95 = $9999.00
2469xFGE @ $4.05 = $9999.45
7142xFRI @$1.40 = $9998.80
= $59,964.65 invested , $35.35 cash
So_Cynical's starting portfolio
16260 x BPT @ $0.615 = $9999.90
1029 x CPU @ $9.71 = $9991.59
15037 x TSI @ $0.665 = $9998.27
2105 x PTM @ $4.75 =$9998.75
8695 x CIF @ $1.15 = $9999.25
5128 x APN @ $1.95 = $9999.60
= $59.987.36 invested , $12.64 cash
In the current prevailing market environment, why would you lock yourself into a stock for long term (Unless of course you bought it in 2003 and it owes you nothing)?
Buying and holding in a sideways bear market would be worse than parking your capital in fixed interest, surely?
In the current prevailing market environment, why would you lock yourself into a stock for long term (Unless of course you bought it in 2003 and it owes you nothing)?
Buying and holding in a sideways bear market would be worse than parking your capital in fixed interest, surely?
So_Cynical, what software/platform are you using for the Portfolios you're posting (yours and Robusta's)? It's very simple and clean, I like it.
Thanks.
Buying and holding in a sideways bear market would be worse than parking your capital in fixed interest, surely?
Nope, the fixed intererest offers no hope of capital growth, and the interest is eroded by taxes with next to no tax benefits and inflation.
On the other hand it is possible to invest in assets that are producing dividends equal to or higher than bank interest, that are tax free with the franking credits and if there is inflation over time the asset prices should generally keep pace with it and produce a natural infaltion hedge.
They real question you have to ask is , "Are current asset prices at speculative levels, or do they reflect the earning power of the asset"
If the answer is that they are not part of a speculative bubble then they will perform better than cash, over time.
An investment in fixed interest would achieve 6% before tax, an investment in your mortgage would equate to 7.5% (or there-abouts) tax free.
The number of shares producing dividends above 6% p.a before tax is minimal and the number producing dividends above 6% p.a, with franking credits is even less. The "current market environment" is sideways and down. The global economic crisis fallout with sovereign debt is bubbling to another explosion and collapse. The medium term forward projection is gloomy at best. The likelihood of capital gains on "long" investments keeping pace with cpi is dubious .
The answer to this (in my opinion) is "Yes, share prices are still at speculative levels mostly at inflated price/income levels and returning yields less than cumulative bank interest rates. The speculation that "long" investments will garner capital gains that combine with yield to out perform bank rates is not supported by recent economic figures.
In my opinion, So Cynical has it right when he combines swing trading with dividend stripping for short term gains of 3 - 6% per trade. Cumulative, over 12 months, will see his return on initial capital expand per trade and easily exceed 15% p.a. Holding some shares bought on a low entry price after the trade, for "free carry" , and topping these up while preserving his initial trading capital is a sensible hedge although it does reduce his trade capital and could reduce his posible returns.
The number of shares producing dividends above 6% p.a before tax is minimal and the number producing dividends above 6% p.a, with franking credits is even less. The "current market environment" is sideways and down. The global economic crisis fallout with sovereign debt is bubbling to another explosion and collapse. The medium term forward projection is gloomy at best. The likelihood of capital gains on "long" investments keeping pace with cpi is dubious .
The answer to this (in my opinion) is "Yes, share prices are still at speculative levels mostly at inflated price/income levels and returning yields less than cumulative bank interest rates. The speculation that "long" investments will garner capital gains that combine with yield to out perform bank rates is not supported by recent economic figures.
Not if you can find good quality companies that are cheap IMO.
Depends on the "long" investments you are in, I am confident my portfolio will outperform bank rates in either capital gains or dividends in the longterm and furthermore by a large margin when capital gains are combined with dividend yield.
Take for example mt FGE holdings most people look at it as a growrh stock yielding only ~ 1.4% at current prices but when you look at my average purchace price @ $2.563 it is yielding me 3.51% on my investment and growing with a nice 128.2% potentual capital gain to come. It would not surprise me if the yield reached ~ 20% before I exit this company.
Why would I want to trade such a excellent company
Buy and hold for me.
For the record why not name them. We can come back to monitor their progress on a 6 monthly basis.
Going on the list provided, we can come back to it on a regular basis to see whether your optimism is justified.
3.51% is less than bank rates and "potential capital gain" is a bit like counting your chickens before the eggs have hatched..
Moving in and out on the highs and lows like So_Cynical would increase your stake in the company at no further capital outlay. IMO buying and holding, in this environment, limits your opportunity to maximise the return on your investment capital.
3.51% is less than bank rates and "potential capital gain" is a bit like counting your chickens before the eggs have hatched.
l.
Sorry I am getting a little bored with this argument
Maybe it would be more interesting if you could show us how much better you do with trading?
Maybe it would be more interesting if you could show us how much better you do with trading?
I'm certain i can do much better trading...TSI has been taken over so do you mind if i put my TSI money (profits & Capital) into something else?
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