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Discussion in 'Introductions' started by stark, 25th Aug, 2017.

  1. stark

    stark New Member

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    hi Everyone

    Just a new starter keen to learn about investing , combined with money management techniques. I just put some of my deposit in getting some piece of real estate which is going well so far but I am very interested to know where to start for getting ideas into shares /LICs etc. my income levels are pretty stable and would like to invest 10k to 20k in different asset class apart from Brick and mortar. Just a big HI to you all lovely people. will be doing a lot of reading.

    Thanks
     
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  2. twisted strategies

    twisted strategies Well-Known Member

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    welcome and hi !

    as a generic concept , the stock maket has been near cyclic highs ( for the period after 2008 ) and there is some worry of a downward trend in share prices within the next 2 years ( a 10% or larger drop is possible )

    so learning and making early decisions on plans might be a good place to start


    have a read and see if dividend reinvestment plans will suit you ( this is a US version but not that for from what is offered in Australia but only in some companies/shares

    Dividend reinvestment plan - Wikipedia

    the next is franking credits

    Learn About Franking Credits

    these little quirks do not suit everyone but knowing your preferences early could change your investment selections .

    for ideas about LICs this web-site ( especially contributions from member austing ) is as good a collection as i have found ( look inthe thread on LICs )

    ANOTHER TIP assuming you have already a stock trading account ( with Commsec , Bell Direct , etc ) is to read various quarterly reports put out by LICs on the portfolio performance .. sometimes they reveal a pearl of wisdom not normally noticed on a share , if no trading account yet try this site ( the ASX )

    Education centre content

    personally i prefer shares over LICs , REITs and ETFs but hold all 4 classes of investments ( each has there strengths and flaws ) and my needs will differ from yours , ( i am older and have property , but have been retired, )

    good luck

    hopefully some market veterans will drop in and help

    cheers !
     
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  3. twisted strategies

    twisted strategies Well-Known Member

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  4. Hodor

    Hodor Well-Known Member

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    The beginner's guide to LICs is a great place to start.

    Also consider a lazy 3 fund portfolio. Which is using funds such as exchange traded funds (ETFs) to buy total domestic market (ASX 200 or 300) total world sharemarket and bonds. It may be lazy however it is proven to perform very well and you can worry about other things.

    Key concepts are diversify and minimise fees.
     
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  5. austing

    austing Well-Known Member

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    Attached Files:

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  6. austing

    austing Well-Known Member

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    I see too many investors swinging from one extreme to the other. I haven't completely given up on active management. Passive and active can work well together. For investors who like a hands off approach Core and Satellite can work well (my choice). For the more active investor a cyclical approach is another option. Things do work in cycles that's for sure. A useful article can be found here at Steve's excellent blog;

    TIME FOR GLOBAL ACTIVE MANAGERS TO OUTPERFORM & COMMON CATALYSTS FOR LICs.

    Note the chart:
    IMG_0404.GIF
     
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  7. twisted strategies

    twisted strategies Well-Known Member

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    a welcome return as well ( imo ),

    timing your buy-in price is still important in LICs ( and very important in ETFs)

    please take care when using 'performance figures ' some are very arbitrary , and some LICs use 'div. leveling ' ( pay an almost steady income stream to buffer against the bad years )


    and thanks for the update


    LICs on my watchlist and MLT (looking for a dip ) , URB ( watching to see how it handles the probable fall in property prices ) and EDC ( but am very cautious on this , as it does mainly debt on property )
     
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  8. twisted strategies

    twisted strategies Well-Known Member

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    NTA i use as only ONE factor in decisions the LIC may contain . several over-priced stocks in the portfolio ( and over-priced is NOT a reliable guide to future earnings )
    i DO like to consider the ( LIC) portfolio in context .
    CIE has been a short-term winner for me , whereas BST has been a bigger test of patience ... but i will strive to average-down both ) ( i still need some aggressive growth in the mix )
     
  9. austing

    austing Well-Known Member

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    Performance wise I only ever look at pre-tax NTA which gives the most accurate indicator on how well a job the Mgr is doing in growing the "portfolio" (with dividends reinvested and net of fees). It eliminates all the Mgr bullsh*t.

    The following report (p2) available most weeks gives these performance stats over different time periods. Unfortunately not all LICs are covered though:

    https://cuffelinks.com.au/wp-content/uploads/Indicative-NTA-20170821.pdf

    Then there's this IIR monthly report (p5) which covers other LICs but only gives up to 5 year performance stats:

    https://cuffelinks.com.au/wp-content/uploads/IIR-Monthly-LIC-Report-July-2017.pdf

    In my circumstances I must admit it's all kept very simple nowadays as one day my wife (who has little interest in such things) will need to be able to manage the portfolio if I'm not around. And to be honest once one gets to a certain level of income from traditional LICs / ETFs the portfolio is best left well alone except for occasional top ups when opportunities arise. Mind you our approach is income driven. I really don't care about capital volatility (other than a buying opportunity) as long as over time our dividend / distribution income continues to grow.

    So it's all very simple, boring, long term focused with minimal maintenance for us nowadays. That doesn't stop me reading about what's going on though out of interest.
     
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  10. twisted strategies

    twisted strategies Well-Known Member

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    my personal timelines have condensed since becoming a member ( and since starting to invest in late 2010 ).

    i ( imo ) still need to be aggressive ( as well as cautious ) and not rely on a major market dip to exploit .( as i had previously hoped to do )

    so far 'income driven ' ( in my case ) is translated to 'growth ' via DRP schemes ( which i have mostly subscribed to ) but i can see changes will be needed to be made before 2020 ( whereas the original plan was in 2020 ).

    there is plenty of 'showing in the best light ' in LICs ( and ETFs ) and WAX ( which i hold at no cash risk ) is probably an excellent example of 'opportunistic investing ' ( but one that has dne very well for me )

    international exposure via LICs ( i do hold some 'international shares ' directly ) is via HHV , CAM and CDM ( although if a global dip i would be very keen on some of Templeton's offerings ).

    me bored with LICs ( and ETFs ) ?? not a chance , apart from still needing to more learning and thinking , i still need to optimize both portfolio balance and portfolio returns , and CAM refining it's mandate ( even if it was wise and timely ) have certainly increased my need for extra research .

    one precaution i am trying to do is help improve the financial ( in the share market ) education of the probable Power of Attorney of my affairs , should i be rendered incapable of such tasks , ( i think such a person would need to make well rounded decisions as i suspect the future landscape will change , in my lifetime )

    my mum had such a duty thrust upon her( when she was alive ) , without such knowledge , so have seen what could go wrong .

    it all sounds a little scary , but at least i wasn't totally naive , when starting in equities
    without early gains made in interest-bearing securities i would have had less fire-power in the 2013 to 2016 bull run , a lot of those gains went into LICs as the securities were redeemed,).
     
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  11. twisted strategies

    twisted strategies Well-Known Member

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    current LICs held

    CDM ( my largest by $value ) ( a top 10 holding )

    WAX ( at no cash risk )

    WIC

    OZG

    BKI

    BST

    CAM ( a sizable holding -- a top 20 holding )

    IBC

    AOD ( is it a LIC , LIT or ETF ?? )

    HHV


    and would argue SVW ( at no cash risk ) and SOL , behave like LICs/investment companies

    please note i have a HIGHLY diversified portfolio where CDM is equal to less than 2% of my portfolio ( and total LIC exposure if SOL and SVW are included of roughly 10% )
     
  12. Hodor

    Hodor Well-Known Member

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    Too many forget to build a core and focus on rolling the dice on a couple of individual stocks, giving it some other name. Core and satellite is definitely something worth considering, getting the core going without delay is important. Is the extra work and risk worth it? Hard to say, plenty of evidence says it is unlikely to for most vs a passive index hugging one. Having an active part of the portfolio can be beneficial for those that like to tinker and fiddle and help keep the portfolio as a whole on track.

    Curious on the definitions of "funds" and "fund assets" and how they differ.
    The amount of under and over performance is also important as the story isn't told without it.
     
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  13. twisted strategies

    twisted strategies Well-Known Member

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    my focus is on future income, and a reduced risk of major capital loss in the down turns ( but will admit i have probably been excessive seeking diversity )

    ' index hugging plays ' are VAS , MVB and QFN for me .

    as i think the 5 major banks and financial sector will be insulated against the worst of the shocks , despite government declarations to the contrary ..

    BKI i see as more a survival play ( 50% of the holdings should survive all but a total economic collapse in Australia )

    for 'index-hugging ' plays i am hoping to buy into them at market lows ( XJO close to 4000 )

    and yes i look to tweak and fiddle in the search for a better outcome in an uncertain future
     
  14. Hodor

    Hodor Well-Known Member

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    I do wonder if you could get the same level of diversity in a simplified package(s).

    Still I am relatively new to all this, especially in strategic and thought out fashion. It appears you put a lot of thought into what you do and have done well
     
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  15. austing

    austing Well-Known Member

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    FGX / FGG for example?

    Cream of the best Mgrs around but a long term play. Due to so many styles don't expect major ourperformance but hopefully better than index returns, a strong dividend and noticeably lower volatility.

    Just one LIC gives access to many Mgrs. Ease of admin and wide diversity. Importantly the fee is much lower than going direct and in some cases these funds are not available to retail investors.

    Currently offering reasonable value.
     
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  16. twisted strategies

    twisted strategies Well-Known Member

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    Hodor ,

    the thought was also relevant to timing

    VAS was bought in the lows of 2011 ( not a hard pick for a novice ) ( others might have chosen STW or similar )

    QFN was bought in Dec. 2012 when i needed to park some money ( short-term ) but needed 75% of that cash back in March 2013 ( this is NOT what i recommend to others )

    the units i sold back ,yielded 10 cents a unit profit ( after costs ) but the ETF had also paid a div. ( which i had DRPed ) and they continue to DRP ,today a tiny cash yield short term ( but superior to a 3 month term deposit )

    10-Dec-12 12-Dec-12 17-Jan-13 $0.38098 ( call it 38c div. )


    now why i have never added extras ( apart from the DRP ) is the index ( XFJ ) , now contains more companies , many i don't really like

    so THIS year , i could see plenty of headwinds in the major banks ( some not self-inflicted ) but i could also see bank divs kept high(er than they should be ) to stop a share-holder exodus .
    and then i spotted MVB 7 major banks ( and ONLY 7 major banks ) just when banks were being were being assailed at home and abroad .

    time will tell if this was a wise move ( i think of this as a safe-haven play , Beta-shares closing this ETF being the primary risk ).

    IF there is a crash ( and i happen to have ready cash ) ETF targets will be ILC ( or VLC ) and MVW ( you would have to read the various MVW white papers to see at what i am aiming at there ) and HVST ( which i am currently averaging down , but is NOT an index play )

    MVW - VanEck Vectors Australian Equal Weight | Australian Equities ETF- VanEck Vectors Australia | VanEck Vectors Australia ETFs (White Paper: The unequalled power of equal weight investing ) (White Paper: Why Equal Weight? Strong Foundations Have Equal Footings) please not i do NOT currently hold MVW but i am looking for an entry opportunity )

    i will also look at LIC targets the focus on large cap companies ( MLT would be my preference , but a good price is a good price and there are several LICs to select from ( with top reputations )

    most of my LIC choices ( currently ) focus on opportunistic growth ( mid-term holds on take-over targets , , capital returns and such )

    IBC and BKI not normally going for that style of thing .
     
  17. twisted strategies

    twisted strategies Well-Known Member

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    Hodor ,

    i have a lot more time to think strategy and angles , now , and also extra incentive to tweak as best i can before ill health MIGHT stop me for being actually hands on
     
  18. twisted strategies

    twisted strategies Well-Known Member

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    also something to note , is apart from MQCPA, QFN , and BSL ( in the share placement ) i do NOT buy big parcels , i normally buy less than $3K a parcel and keep the ability to buy a second parcel quickly if the SP continues to slide ( and even a third parcel on the same day ... VAS and MQG in 2011 ).

    since i buy in a falling market ( while most buy in a rising market , or AT the bottom ) this strategy is comfortable for me ( i calculate a MAXIMUM price i am willing to pay an try to creep lower ) ( but is not popular with mainstream )
     
  19. stark

    stark New Member

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    wow..thank you generous people....so much info...loving it...so much to go through and read. For a start, which online broking platform is good ? I have read CMCmarkets is good ! What do you say ? Back to reading.... :)
     
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  20. twisted strategies

    twisted strategies Well-Known Member

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    stark ,

    the karma comes back ( normally via a circle ) , you can trust me on that , it is the financial advice i am not allowed to give .

    i have two ( online broking ) platforms , i have Commsec and Bell Direct ones , both at the lowest level ( no ongoing fees or charges .. except for brokerage )

    neither is 'better ' they have different strengths and weaknesses , making them usable in tandem ( Bell Direct was built around a core of inherited shares , i also hold BFG the parent group of Bell Direct )

    one error i did make was underestimating the trades i would do , i probably would have been better opening a Macquarie account and probably one that expected numerous trades monthly .( it would have been one busy account , but i didn't foresee that )

    ( i hold MQG 'free-carried ' )

    but like many novices , i never thought buy and hold , would need so much adjusting ( and tweaking )

    the Commsec , ' a new account bonus' wins many new traders ( i would think ) but will not suit everyone ( especially those not able to watch the market all day ) .

    i DID NOT use Iress ( apart some free bonus tests ) my ISP is just tragic ( wireless mobile OR cable broadband ) if Iress doesn't lock up the computer /broadband , it still doesn't do enough to use it ( even for free ) ( i even maxed out the laptop RAM but there was barely any improvement at all )
     
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