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Leveraging Into the Market in 2009

Discussion in 'Investing Strategies' started by Chris C, 15th Oct, 2008.

  1. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    OK my general thoughts are that I want to start dollar cost averaging into the market in December through to the first half of 2009. I'll probably look to invest around $10,000 to start with and an additional $3000 - $5000 a month in the first 6 months of 2009.

    I'm not looking to invest in individual shares rather was looking to invest in some index fund, EFT, LIC or managed fund. Does anyone have any advice about the pros and cons of ecah of these options as well as any options to look into?

    Obviously I'm looking for funds that have a reasonable track record or meeting or beating the market with low MER and entry and exit fees considering I'm looking to make regular additions to my investments. Does anyone have any recommendations, feedback, or option to look into in this regard?

    I'm also looking to potentially gear my investments through a margin loan. I have looked into a fair few lenders, but I was wondering who other people are lending through and the interest rates they are paying and if they have any advice in this regard. Also who might be worth looking into given my situation?

    At this stage I'd expect that I would want to employ a LVR of around 60% - 70%, and obviously the lower the interest rate and the higher the buffer the better. Anyone have any suggestions.

    Also I was looking to invest into the Asian market as well, does anyone have any suggestions of some of the better ways to go about doing this?

    Thanks.
     
  2. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    Hi chris, I think you have a good plan. I'm also investing into the market currently on a monthly basis, so this is why I don't want any recoveries any time soon! lol

    I'm not gearing though, cause most margin loans are 10%+ PA and i feel this rate is to high compared to the risk of investing in the current climate. If you have equity in a property, you would be better using that. Plus I think your keen looking at 60-70% LVR, if anything I would be 30-40% LVR with 50% MAX.

    If you want the process to be fairly automated, check out netwealth.com.au.

    If your looking at a good asian fund, check out platinum asia fund.

    To add some diversity to your mix, check out AMP Capital Investors - Core Infrastructure Fund they are currently investing in india which I think will provide good growth/diversification over the long term.
     
  3. bella

    bella Well-Known Member

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    6th Jun, 2007
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    Location:
    QLD
    I don't know about LIC, but the choice between an index managed fund vs. EFT can come down to management fees vs. brokerage. If you are buying minimum of $1000 chunks at a time the EFT will probably be better, but if you are buying smaller chunks the managed funds start to look better. Work out how much and how often you intend to invest, then find out the fees/brokerage associated with each and see what comes out better. As for investment performance - EFT's and index funds that track the equivalent index should perform the same - so it all comes down to fees.
     
  4. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    It's a great idea and I am doing the same.
    I've bought some BHP but I am particularly attracted to banks atm...;)

    Cheers