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Discussion in 'Exchange Traded Funds (ETF)' started by FrugalPoodle, 22nd Jun, 2010.

  1. FrugalPoodle

    FrugalPoodle Member

    Joined:
    25th May, 2010
    Posts:
    22
    Location:
    Adelaide,SA
    Hi, slightly stuck here..

    I've started setting up my portfolio, have bought quite a lot recently while things are comparatively low, I have

    40% STW
    8% Term Deposit
    5% LEI

    and the rest in high interest savings.. i'm leaning towards thinking I don't need to hold a huge amount of cash ATM if its good to buy, i can save relatively easily.

    I was thinking of adding a growth etf or asian markets, but a quick look at the charts seems things dont compare to the ASX or they're too much on the up. I don't have any skills reading charts so these are just casual observations.

    I'm thinking I don't want all my cash in the one basket and generally looking to hold for the long term.

    STW is about $43 now, about $2 more since i made my first buys.. im thinking its too much and might wait for another drop, but I'm also keen to buy before things climb too high.

    I'm also on the lookout for other good buys - but need to remind myself im doing ETF's because i know little about stock picking.

    Might look at the RDV (russell high div).

    Any ideas/comments?
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi,

    It helps to have some kind of plan, instead of buying on a whim. Try researching 'asset allocation'. Also, an old rule of thumb, is 100-age in shares. The rest in bonds/fixed income/cash.




    Johny.
     
  3. FrugalPoodle

    FrugalPoodle Member

    Joined:
    25th May, 2010
    Posts:
    22
    Location:
    Adelaide,SA
    Yeah i was only going to start out small, ended up changing tack.

    I'll probably go with an ishares ETF or 2 to round things out, probably starting with IZZ.

    I've decided to keep an eye on them for a few days before I jump in.
     
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    What percentage of iShares china 25, are you going to buy?





    Johny.
     
  5. FrugalPoodle

    FrugalPoodle Member

    Joined:
    25th May, 2010
    Posts:
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    Location:
    Adelaide,SA
    Thinking of going with 10%, its a bit up and down.
     
  6. GunnerGuy

    GunnerGuy Index & Property Investor

    Joined:
    26th Sep, 2008
    Posts:
    65
    Location:
    Kuala Lumpur, Malaysia
    What sahres to invest in.

    Before you start investing in shares decide what your overall plan is. Income, growth, shares, investment property, regular saving, trading, cash flow etc.

    As Johnny said - asset allocation, diversification, and risk assessment is important. What level of risk do you wish to take ? What time frame are you looking at ? If the market drops 25% would you sell or add to you share holding ?

    As a first step decide do a budget. Calculate your current income and monthly expenditures, ie. food, rent/mortgage, dinner out, booze, holidays etc. Then you will have an idea of how much you have to 'invest'.

    Second decide what are you saving for, ie. for a deposit on a house, for you pension (capital growth), for the kids school. This will tell you your timeframe. When do you want/need the money back ?

    This will then tell you what you can invest, what and when you want to achieve a return and this will help you decide if you need to spend less now and what level of risk and time frame you are thinking about.

    Your risk level and timeframe will then assist you in deciding on shares, investment property, bonds, fixed interest as a base case. Then depending on your risk level decide on Oz shares, International large market (eg. UK, US, Japan) or emerging and/or asia.

    It is good that you are investigating what to do and that you are planning for your future financial freedom. Well done. Try to write down where you want to be in say 5, 10 and 15 years with your expected large purchases eg. house, car(s), kids, your job(s). But with this I strongly advise you look at you monthly budgetting to see what you have to spare (where you can cut living costs) and then what you can invest in.

    Gunner guy.
     
  7. FrugalPoodle

    FrugalPoodle Member

    Joined:
    25th May, 2010
    Posts:
    22
    Location:
    Adelaide,SA
    Hi, yeah that's a pretty good checklist.. think i've covered them all. I changed my plan a bit once i'd started and decided to hold less cash for the moment.
     
  8. GunnerGuy

    GunnerGuy Index & Property Investor

    Joined:
    26th Sep, 2008
    Posts:
    65
    Location:
    Kuala Lumpur, Malaysia
    What rate of return are you getting on your Fixed Deposit ?
    Are you paid monthly or annually ?
     
  9. FrugalPoodle

    FrugalPoodle Member

    Joined:
    25th May, 2010
    Posts:
    22
    Location:
    Adelaide,SA
    I locked in at a pretty low rate as gfc was hitting, about 4.25% annually (believing some people that rates would go down to next to nothing).
     
    Last edited by a moderator: 27th Jun, 2010