ETF Ive finally rejigged my portfolio to indexing

STW 24%.
SFY 23.5% with a 5.9% yield.

BR

 

All have DRP although it's currently suspended for SLF.

 

Thanks BR.

 

We are quite lucky in this country. You can use options (on the index) and CFDs to hedge your ETFs. I feel there is a few systems you could build to protect your ETFs if you wanted too. This would be active though, not passive.

A section devoted to ETFs is a good idea I think.

 

Can I suggest to others starting a portfolio with a large lump sum
is to Average into the market rather than with one lump sum

I picked the worst time! against the advice of my advisor which was to enter every 3 months over a year or so

Still even in these volatile markets I am very comfortable, and have not sold a cent. Im searching for more cash to enter

 

Actually you did the maximal thing assuming you weren't trying to time the market, there are what I view as reliable studies indicating that lump sum has a higher expectation than DCA or other approaches.

Still doesn't stop the pain when you nail the top does it? I suggested an index fund for my sister and she got it pretty much right at the top, made me feel not so good

 

Hi Insight,

Don't sweat it, I'm guessing she has a long term view?
This will make you feel better...

Fidelity : International

Cheers,

Dan

 

What do you think now on this coopranos?
Do you think your expectations only 3mths ago of leveraging over 50%, or >14% return long term
Reflect back, and analyse what your expectations were. Never ever make the same mistakes.

Where are all the forum members that were invested via LOC and margined heavily? I guess a bit stressed at the moment

To me Its better to look at ur risk level and set your portfolio
Just coz the market drops - doesnt mean ur risk level has changed
hence no selling at the worst time
only buying

btw
people were asking early on what wiped out meaned
hmmmm LOC + heavy margin loan at 10%
+ 25% drop in market

Lets make a pact not to get irrationally exuberant

 

In late 2005 I set up a watchlist on tradingroom.com.au
of the best funds I could find

to track performance
The good thing is it has 7yr performance figures

and vanguard indexes to benchmark against

some interesting stats
in 3 yrs navra 15%, Aust shares 20%
6yrs colonial first state imputation 12% , aust market 14.8%

who was the best over 7 yrs
DFA small companies 22.89%
this beat even CFS geared 22.49% - remember this is geared adding to more volatility and less return
hunter hall and investors mutual were good performers
but overall - again - hard to beat market, DFA doing a bit better than market

remember I selected this list 3yrs ago - removing some bias
spreadsheet attached

 

Interesting figures there with the Colonial Imputation fund vs the index. Thanks

 

Coops, your planner friend really should be in a different business!

Like I've said before, 50% LVR can handle a 48% fall in the market, if you are allowed 95% LVR (eg 95% is available on ASX20 shares through MQ Prime). So you would not be wiped out, even if the walls caved in.

Whenever I get depressed about the sharemarket I look at this picture, from the ASX booklet Getting Started in Shares.

(Remember that people jumped in front of buses in Oct '87; can you see that 'blip' in the trend? The Australian sharemarket is a remarkably resilient beast; returning about 8% growth pa or nearly 12% accumulated, over the last one hundred years).

 

They've gone quiet at the moment, but it's understandable I guess.

MW posted on Somersoft that he's sold out of all of his funds and is now in cash...

 

I am still here!!!

The problem that occurred is that my calculation of LVR and my margin lenders differ

I did post about this here

http://www.invested.com.au/2/margin-loan-lvr-being-calculated-incorrectly-28133/

I will need to add further comments as to the outcome.

Really there was very little difference between this one and the August 07, It's to be seen what happens from here in where is the market going??

Cheers

 

As am I...

We reduced our LVR using re-investment over the last year to be more in line with advice. We didn't recieve a call and the correction has given us the opportunity (as opposed to the requirement) to invest more on Wednesday to reduce our weighted margin LVR further and hopefully increase the weighted returns. It was money we were going to invest anyway - the timing was very fortunate is all.

Cheers,

Barracuda

 

DKMC

Still around, very interesting times though!
Things like the recent kaboom definitely give one food for thought.
Probably the biggest thing I am thinking about now is how comfortable I would be with a huge amount invested in the market.
Could I cope, for example, with losing $150k of my net worth as some here have done, from invested capital of $500k (margined to $1M, 15% drop).
I dont know, but I dont think so.

I have definitely realised the dangers in riding too close to the line with your LVR, although at the worst of the recent drop I just touched buffer (so no margin calls) I will definitely be easing back the LVR pretty substantially.

I think the idea of an all-property (direct resi) portfolio becomes more and more appealing though, for a number of reasons, not least of which is mental (it is one thing to have a property slump, but you dont actually see an account balance each day with the declining value of your home!!). Add to this no margin calls, and rents that stay pretty consistent, it definitely has a bit going for it!

As for what to do on the shares/managed fund side of things, that is a toughie. The index style of investing does appeal, but it is still a struggle to come to terms with the idea of investing globally (particularly because a large part of true indexing would be investment in US markets given their size, and things dont look terrific over there at the moment). I know the argument about not timing the market, but it is still a hard one to throw good money after bad.
And then you think that if all you had done over the last few years was sit on the sidelines all in cash, wait for the market to tank, go all-in, get your 10%-15% in a couple of months, then go all cash again until the next tank, you would have vastly outperformed the market with a lot less risk (given that your money is in cash for the majority of the time).

Its all a bit hard really, but I do admit I find the whole game fascinating!

 

Id advocate property first with high leverage
then index funds with low leverage

There are various reasons to do it this way around

Partly because of risk and volatility of property is less
and the amount of leverage banks will give

Even different sectors in the stock market wont escape a bear market
negative correlation did not really occur

However my direct residential property went up 25%+ in the last 12 months
being in adelaide

This has more than covered any losses in the shares

If you look at overall wealth its not volatile at all

In the long term they will feed off each other.


Maybe I should write a book about this!!

certainly there is a huge gap in the market

There are hardly any people that advocate property then shares
Navra is one of them and thats great!

 

Yeah - that would be great - if you can pick the timing and I don't think anyone can.

 

Am I right in thinking that at 8% Growth and even at low levels of say 5,400 today for AXJO (S&P ASX 200) then in twenty years (2028) it should be 25,169.17

 

XAO - 12.507 (March 1988)
XAO - 26.974 (March 1998)
XAO - 55.319 (March 06.2008)

 

Wrap mechanics

Great thread, I'm thinking of going down the DFA route myself. It's too bad they have such a high minimum investment, St George have an LVR of 75% on some of the DFA funds but I'd be nervous about a $750k margin loan with the volatility around at the moment.

I just have a question about wraps - if I get a fee for service broker to set one up for me is it easy to add to the managed funds in it? Ideally I'd like to BPay to it each week or two, is that something that can be done with a wrap?

I wouldn't want to have to get the financial planner involved every time I made an additional investment. I assume you could set up a regular investment plan with the same amount coming out each month but I'd prefer the flexibility of being able to add to it myself.
Thanks.