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What Shares to Invest In for Kids

Discussion in 'Shares' started by MattR, 11th Mar, 2008.

  1. MattR

    MattR Well-Known Member

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    Hello all

    My kids have each inherited about $6,500 and I want to plonk that into shares preferrably with a DRP for at least the next ten years.

    What stocks and why?

    Thanks in advance

    MattR
     
  2. DaveA

    DaveA Well-Known Member

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    stw.... enoughts already been said....
     
  3. samaka

    samaka Well-Known Member

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    Another vote for STW - index tracking - so exposure to top 200 companies on ASX - only 0.286% MER.
     
  4. crc_error

    crc_error The Rule of 72

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    index tracking and no dividends?
     
  5. samaka

    samaka Well-Known Member

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    ......Huh?
     
  6. Billv

    Billv Getting there

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    Matt,
    I would put them in a term deposit for 12 months or so till the stock markets settle a bit.
    If at anytime you see the markets turning you can always buy shares
    but with all the dark clouds in the horizon it's not looking good at the moment...
    IMHO
     
  7. voigtstr

    voigtstr Well-Known Member

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    dont STW and the like do dividends?
     
  8. crc_error

    crc_error The Rule of 72

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    thats my question.. if they are simply a call option on the index, then no, if its a actual fund buying the stocks, then I would assume yes.. then I would like to know if you get all the franking credits?
     
  9. samaka

    samaka Well-Known Member

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    It's an actual fund - you do get dividends and franking credits.

    Last one was:
    70.9265C FR@31.8776% 2.7519C TAX DEF DRP
     
  10. crc_error

    crc_error The Rule of 72

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    I would suggest one of these packs.

    Commonwealth Securities Ltd.
     
  11. voigtstr

    voigtstr Well-Known Member

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    I just researched it a bit then... put STW into etrade and then googled the name of the fund from the profile.

    here is their pdf for the asx 200 exchange traded fund.

    http://www.streettracks.com.au/filing/upload/upload/factsheet200.pdf?rand=301948

    and here is their pdf for the asx 50 exchange traded fund.

    http://www.streettracks.com.au/filing/upload/upload/factsheet50.pdf?rand=705547

    here are the good bits from the stf 200

    Earnings Growth (% p.a.) 7.5
    Price/Earnings 17.1
    Price/Book 2.8
    Dividend Yield (% p.a.) 3.7
    Number of Holdings 201
    Total Capitalisation ($billion) 1242
    Franking Credit (%) 73

    Combining growth and dividend would give you a similar total return to what navra retail would give I think except STW is better taxwise because of franking, but then to realise the same money in the hand as what navra gives you, you would have to sell some shares in STW to get at the growth, and you would pay capital gains.

    Someone smarter than me could probably work out the maths regarding the tax.

    Also Navra have been performing better than their stated goal of 10% distributions (plus a few % for growth) so might be coming out ahead compared to STW.
     
  12. FrankGrimes

    FrankGrimes Well-Known Member

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    ARG
    AFI
    MLT

    Long term listed investment companies. Have outperformed the index over 10 and 20 years, but underperformed the last 5 years but have held up ok during the recent problems. DRP and SPP (share purchase plan) if you wanted to add a bit of $ to their accounts each year. Always FF Divs.

    Low cost (around 0.12% depending on which LIC)

    Wish my parents bought me something like this when I was 10.. Would have been a great start! I will do the same for my kids one day..
     
  13. voigtstr

    voigtstr Well-Known Member

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    Anyone prepared to take a crack at comparing the results of STW vs Navra?

    Assume married couple both earning 50k a year. Assume 100k invested in either STW or Navra.

    What do the returns look like, what would the tax look like?
     
  14. Redwing

    Redwing Well-Known Member

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    Have you tried Sims site CompareFunds, does that help :confused:
     
  15. voigtstr

    voigtstr Well-Known Member

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    since STW is an ETF its not on sim's site.
     
  16. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I haven't built in ETF support for the site yet - I can generally get the share prices okay, but I don't seem to be able to find reliable (and cheap) source of dividend/distribution data - which is crucial for accurate comparisons.

    I do intend to list ETFs and LICs once I'm able to source good data.
     
  17. samaka

    samaka Well-Known Member

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    If you do ever find it please post where Sim :)
     
  18. Bacchus

    Bacchus New Member

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    Banks

    :cool:I'd buy CBA shares.I dont't know about DRP but you can look at their web sites.With $6500 you can buy 153(appx) shares with very good dividends.ANZ is as good.
     
    Last edited by a moderator: 13th Apr, 2008
  19. Glebe

    Glebe Well-Known Member

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    Another vote for STW from me.
     
  20. Redwing

    Redwing Well-Known Member

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    How would you hold the shares if the kids are under 18?