good yield, high growth

[Intrinsic_Value]

I think if you want to be safe, you'd buy say a European index fund now. Get the forex exposure too

one might be prepared to trade by going long on the European index now, but I wouldn't invest by going long on the European index.


From a trading perspective: play the trend
From an investing perspective: not after the markets have run so hard and market pricing is based more upon relative valuations (because of central banks throughing cash around) than absolute values.

 

[willair]

Most people don't dive in when the market is depressed, most people panick or sit on the side lines. (And we know this again because of our good old Somersoft forum, the evidence is right here on this forum)

Its only after several years of positive returns that the 'retail' mugs start to get back into the game.

Yes it's all in black and white in this site and what happened when most blue-chips lost over 50% over a very short period,and some if you read
sold at the bottom only to see the value come back,one austbank I hold is now rated as one of the most expensive banks in the world after the last massive dip that did translate into a 5 year rally with a upward slow line,inbetween a few occasional sideways trends,but now the same financial media entertainers are pronouncing "sell" the problem with that is when they ask the question they only ask the profession media not the people in the street who are the investors..

 

[D.T.]

Yes it's all in black and white in this site and what happened when most blue-chips lost over 50% over a very short period,and some if you read
sold at the bottom only to see the value come back,one austbank I hold is now rated as one of the most expensive banks in the world after the last massive dip that did translate into a 5 year rally with a upward slow line,inbetween a few occasional sideways trends,but now the same financial media entertainers are pronouncing "sell" the problem with that is when they ask the question they only ask the profession media not the people in the street who are the investors..

Who defines what 'blue chip' is? By market capitalization? Because if so then Rio would be 'blue chip' by your definition but is an awful business. Buy good businesses (per my previous post) and sell when they no longer represent good value.

 

[willair]

Who defines what 'blue chip' is? By market capitalization? Because if so then Rio would be 'blue chip' by your definition but is an awful business. .

From what I read probability is what may or may not happen over the next 5 years,that covers a lot of investment areas in high end banks weather they can keep the returns up for that long is anyones guess and more that run from fixed terms in all banks and try for 10% plus in high ends banks the more the trend will spiral upwards..imho..

 

[roe]

Perhaps the price variability is not a big deal, but the volatility of companies can be. A company going broke can do a lot of damage to your share portfolio- although that is not reflected in the price index.

it can be mitigated if you have the knowledge ...last count there are 2150 listed business on the ASX ... out of those 2150 In my opinion, and my opinion alone about 10% are worth investing into...

out of those 10%, you can refine it further and take out the best 30-50 stocks
you be patient and you buy them when they are cheap... you dont have to buy all 30-50 you buy as each one face its bad cycle or mishap and turn cheap...

With shares you dont need to get 10 out of ten right in fact you only need 7 out of ten to perform well and the other three either goes bankrupt or going backward you still doing well...

out of those 7 some would have double, gone up 50%, 20%, 10x, etc...

stock market best buy when there is large margin call taken place, mega headlines of 20bn or some crazy number got wiped in the market today or some crisis is playing out...

that keep out the un-educated and the mass, so there are plenty of seller but no buyer...smart buyer come in grab incredible bargains...sit back a few years
and watch his investment double along with the juicy dividend...

while he sit back, there will be plenty of guru and commentators doing the media circuit, buy and hold don't work, market so volatile its dangerous to buy,

and they do some story on some mugg who lost it all, it now becomes self fulling no one dare to venture into the market and market bottom the last of the bargain to be found..

fast forward 5-10 years, your stock double, triple gone up 10-20 times
the crowd is back, the superfund report record profit, the mass is back bid up demands it becomes a seller market and the setup for the next crash is gathering momentum....

 

[Oscar]

Nice contributions on this thread that has helped me. I specifically like this quote from xactly -

In the meantime I save my emotions for more interesting things and let investing be boring.

I too have been DCA for several years - it's not as easy as it sounds and takes real temperament, especially when the price is falling, even though you are buying more cheaply when this happens! When my 13% weighting gets to 50% I'll be very happy indeed.

 

[jackbak]

My investment breakdown right now is 25% shares / 75% property. Looking to start channeling more funds into shares through my super. I'm 33 now and didn't expect to make extra contributions to my super until I was late 40's but the tax benefits are far too generous to ignore.

Last year I started making long term goals so I can retire at 55 and broke it down to how much I need to contribute each year to make it a reality, it's amazing how easy it seems when you break it right down instead of just aiming for a huge figure 20 years away.

 

[roe]

My investment breakdown right now is 25% shares / 75% property. Looking to start channeling more funds into shares through my super. I'm 33 now and didn't expect to make extra contributions to my super until I was late 40's but the tax benefits are far too generous to ignore.

Stock market is an awesome vehicle for SMSF due to franking credits (15% super tax, Aussie Business is 30% tax) extra 15% credit to you.

The reason I say SMSF is because you have more control of what business you can target to buy that are good and pay fully frank dividend....super managed by someone else you don't know what they put your money into...

if you pick well run Aussie Business and stay with it over the years as it grows it pay you more and more dividend and the franking credits is very juicy

Take our house hold name Woolies, in 2000 it pays 10c every half these days its 62c and growing ...that a 600% fold in increase in dividend along with juicy franking .. ignore capital gain because capital gain is a GIVEN when business earning more and pay more dividend...

don't ignore super the more you can understand the power of super and its tax effectiveness you can retire in style from dividend and franking credits

I contributes the maximum allow under the law in my 20s and still do .

 

[Intrinsic_Value]

thanks I have learnt something new, this is very interesting especially for those with high super balances (which unfortunately I don't have).

Something definitely to reflect upon

 

[redwing]

Shares are doing well at the moment. I am taking more interest in my index high yield fund. In the last 12 months it has returned 26% growth and 5% yield for a total 31% return. Fees are very low at 0.45%. Sure beats property maintenance and agent fees!

The overall value of my index fund is roughly 13% of my total net portfolio and I would like to get it to 20% over the next couple years.

What do you see are the risks or opportunities? I'd be interested in how some investors view index funds as part of their overall wealth portfolio.

Hi Oscar

My US Fund is at 41.18% over 12 months, though because of taking advantage of price movements, actual returns over the last year or so can be somewhat higher (at present) i.e.

Aug 2012 purchase is up 49.57%
Sep 2012 purchase is up 45.59%
Oct 2012 purchase is up 42.05%
Nov 2012 purchase is up 51.17%
Jan 2013 purchase is up 41.52%
Oct 2013 purchase is up 9.34%

Plus Dividends 100%

MER is a bit higher than yours at 0.05%, others are at 0.20% and 0.15%

 

[Deltaberry]

Good job. Yes the US has been an absolute stunner.

 

[bpinvests]

Oscar,
my shares are doing well too....after a shocking period since 2008! I favour property, not only because of my business bias, but I think risks are lower. You need to be far more astute on the stock market and the so called experts are always getting it wrong!
You do not need to be a rocket scientist when it comes to property investment - just pick an area of high growth potential and a property with minimum maintenance liability

 

[oracle]

Big banks to boost stocks with dividends

Yes it's all in black and white in this site and what happened when most blue-chips lost over 50% over a very short period,and some if you read
sold at the bottom only to see the value come back,one austbank I hold is now rated as one of the most expensive banks in the world after the last massive dip that did translate into a 5 year rally with a upward slow line,inbetween a few occasional sideways trends,but now the same financial media entertainers are pronouncing "sell" the problem with that is when they ask the question they only ask the profession media not the people in the street who are the investors..

Australia?s big banks will buy back more than $6.5 billion of their own stock, giving investors a windfall of dividend cheques, to support share prices as they fall from record highs, The Australian reports.

According to the newspaper, Goldman Sachs? Richard Coppleson said ANZ Bank Ltd, Westpac Banking Corporation Ltd and National Australia Bank Ltd's plans to spend about $2 billion each on buybacks

Banks are doing OK for now

Full article here

Cheers,
Oracle.

 

[jackbak]

Stock market is an awesome vehicle for SMSF due to franking credits (15% super tax, Aussie Business is 30% tax) extra 15% credit to you.

The reason I say SMSF is because you have more control of what business you can target to buy that are good and pay fully frank dividend....super managed by someone else you don't know what they put your money into...

if you pick well run Aussie Business and stay with it over the years as it grows it pay you more and more dividend and the franking credits is very juicy

Take our house hold name Woolies, in 2000 it pays 10c every half these days its 62c and growing ...that a 600% fold in increase in dividend along with juicy franking .. ignore capital gain because capital gain is a GIVEN when business earning more and pay more dividend...

don't ignore super the more you can understand the power of super and its tax effectiveness you can retire in style from dividend and franking credits

I contributes the maximum allow under the law in my 20s and still do .

Agree, any thoughts on recent recommendations to increase the age we can access our super to 70? If they want people to get behind super they need to stop moving the goalposts, I'm 33 now, God knows what the rules will be when I want to retire!

 

[Aaron_C]

Agree, any thoughts on recent recommendations to increase the age we can access our super to 70? If they want people to get behind super they need to stop moving the goalposts, I'm 33 now, God knows what the rules will be when I want to retire!

Which is why the smart money avoids super like the plague.

 

[roe]

A lot of this about moving super goal post and stuff is misleading, most people know very little and get scare by what they read in the media..

Super has always been set at a certain age, when they make change to the law it only applied to the new generation ... the Preservation age has been set...

http://www.ato.gov.au/Super/Self-managed-super-funds/Accessing-your-super/Preservation-age/

they may change to 70 but only to the new younger generation,

you can and has always been able to plan with your super.

smart people avoid super?

have you seen the high net worth individual people with asset in excess of 5m to 100m? most of their money is in super
because they get proper and correct advise from their lawyers and accountants

have a look SMSF report on ATO for the rich people, these guys drowned their cash in super, from there they indulge themselves
in commercial properties, share market and imputation credits..

more like low net worth individual avoid super

 

[roe]

Agree, any thoughts on recent recommendations to increase the age we can access our super to 70? If they want people to get behind super they need to stop moving the goalposts, I'm 33 now, God knows what the rules will be when I want to retire!

I can say with close to 100% certainty you can access your super at 60
doesn't matter what rules comes in down the track

 

[equitymate]

The cynic in me says they will keep moving the super goal posts and eventually end lump sum withdrawals(now locked in) so it will become a self funded quasi pension(no reliance on the state teat) with a designated percentage anually allowed to be withdrawn, any remainder left to your heirs will be taxed heavily as some sort of estate tax because it will be argued it had already received preferential tax treatment and now the government is entitled to their pound of flesh.

just sayin...

 

[sanj]

Which is why the smart money avoids super like the plague.

Blanket statements like that can be very dangerous. Some of the smartest and most financislly successful people I know utilise super strategies a fair bit

 

[geoffw]

Blanket statements like that can be very dangerous. Some of the smartest and most financislly successful people I know utilise super strategies a fair bit

Agreed.

An SMSF is yet another tool which has its place in the tool cabinet.