High Yielding Shares Again

For those of you drip feeding and those who use dollar cost averaging - are you using cash or equity? (Equity meaning when you draw on it you will have interest to pay). If cash - is this surplus $? Assuming the PPOR is offset 100% and a positive IP portfolio where you may invest cashflow into shares rather than paying down IP debt?
I'm just curious as to where in one's resi investing position it is wise to divert funds into shares.

Your post didnt go unnoticed CHAOS.

This is me. PPOR paid off, resi IPs +ive, reverting extra cash directly into shares at the moment.....probably until I find a CIP Im really interested in, then Ill reassess. Just finding this is more of benefit than TD.


pinkboy
 
Index Funds

I have been an investor in shares for over 20 years. When I calculated that the returns I made from buying and holding broad based low cost Listed Investment Companies like AFI and Argo beat the returns that I generated from buying and selling individual shares, I realised that the way to make money in the market was to buy AFI, or Argo, or even better, the Index Fund ETFs like STW or VAS.
No CGT. No timing. Just benefiting from the long term increase in dividends and capital appreciation. It is very hard to predict the areas of the market that will do well from year to year, and by buying the index you get the average of the performance of all the professional investors. But, you do not pay the fees that you would pay if you invest in managed funds.
You can also diversify into international funds by buying ETFs on the ASX that cover the whole world. Vanguard's VTS and VEU are examples.
I would recommend books on the subject by John Bogle, Jeremy Siegel and Burton Malkiel. They make compelling arguments for investing in equities, and for Index Funds as the vehicle to use.
 
I have been an investor in shares for over 20 years. When I calculated that the returns I made from buying and holding broad based low cost Listed Investment Companies like AFI and Argo beat the returns that I generated from buying and selling individual shares, I realised that the way to make money in the market was to buy AFI, or Argo, or even better, the Index Fund ETFs like STW or VAS.
No CGT. No timing. Just benefiting from the long term increase in dividends and capital appreciation. It is very hard to predict the areas of the market that will do well from year to year, and by buying the index you get the average of the performance of all the professional investors. But, you do not pay the fees that you would pay if you invest in managed funds.
You can also diversify into international funds by buying ETFs on the ASX that cover the whole world. Vanguard's VTS and VEU are examples.
I would recommend books on the subject by John Bogle, Jeremy Siegel and Burton Malkiel. They make compelling arguments for investing in equities, and for Index Funds as the vehicle to use.

I have read Common Sense on Mutual Funds by John Bogle several times. Very enlightening read. The Vanguard VAS fund with 0.15 per cent management fees has proven to be a standout performer.
 
I have been an investor in shares for over 20 years. When I calculated that the returns I made from buying and holding broad based low cost Listed Investment Companies like AFI and Argo beat the returns that I generated from buying and selling individual shares, I realised that the way to make money in the market was to buy AFI, or Argo, or even better, the Index Fund ETFs like STW or VAS.
No CGT. No timing. Just benefiting from the long term increase in dividends and capital appreciation. It is very hard to predict the areas of the market that will do well from year to year, and by buying the index you get the average of the performance of all the professional investors. But, you do not pay the fees that you would pay if you invest in managed funds.
You can also diversify into international funds by buying ETFs on the ASX that cover the whole world. Vanguard's VTS and VEU are examples.
I would recommend books on the subject by John Bogle, Jeremy Siegel and Burton Malkiel. They make compelling arguments for investing in equities, and for Index Funds as the vehicle to use.

I'm a buy-and-hold investor who doesn't want to spend too much time researching shares and I agree that LICs and ETFs are very worthwhile. However the ones you have quoted (as well as the managed funds mentioned by other posters as being "high yield") are not really high yield. 3.5% dividend or thereabout is quite average.

But fortunately the world of LICs is very diverse. Not only do you have the traditional, more passive LICs (such as AFI, ARG, AUI, DUI, MLT...) all earning around 3.5%, but you also have those that yield 6-7% (ALF, ALR, CDM, DJW, WAM, WAX, WIC...).

The sectors they invest in can be very different: from very small to very large caps, international or Australian shares, different types of industry or different emphasis... and their strategy can vary too: passive or active, long/short, value or technical, balanced or growth, low or medium risk, etc...

It's up to you to choose the ones that suit you best, but more importantly by having a mixed portfolio of several LICs you can achieve great diversification (hundreds of companies) while at the same time realising an average yield above 5% (plus franking) and an average total return above 10%.

I've been using this strategy for many years and found it superior to plain ETFs or index funds. Not only that, dividend payment is much more stable and at the stage I'm at that suits me well.

There was a time when I bought individual companies but I quickly stopped doing that after realising I knew too little.
 
With Vanguard if anyone was investing with them I was wondering...

Why the High Yield fund over the ASX300?

Managed or ETF and why?

Hi Redwing - I chose the high yield fund because I prefer the tracking against higher yielding blue chip companies. The fund invests with 60 to 70 companies with higher FORECAST dividends relative to other companies on the ASX. For example, to my knowledge, the fund misses BHP. Also, companies not forecast to pay dividend yields in the proceeding 12 months are excluded. The forecast gross up yield for this fund is 7.54%. Also, I liked the fact the fund pays dividends every quarter. I set this up to support my non work years so needed a higher yielding, safe, low cost (0.45% annual fee) fund.

I invested in the managed fund versus ETF because at the time I didn't know much about ETF's. I guess there are pros and cons which could be the subject of a new thread??

To answer some other poster questions - I do not use any equity for my purchases, only spare cash.
 
I'm a buy-and-hold investor who doesn't want to spend too much time researching shares and I agree that LICs and ETFs are very worthwhile. However the ones you have quoted (as well as the managed funds mentioned by other posters as being "high yield") are not really high yield. 3.5% dividend or thereabout is quite average.

But fortunately the world of LICs is very diverse. Not only do you have the traditional, more passive LICs (such as AFI, ARG, AUI, DUI, MLT...) all earning around 3.5%, but you also have those that yield 6-7% (ALF, ALR, CDM, DJW, WAM, WAX, WIC...).

The sectors they invest in can be very different: from very small to very large caps, international or Australian shares, different types of industry or different emphasis... and their strategy can vary too: passive or active, long/short, value or technical, balanced or growth, low or medium risk, etc...

It's up to you to choose the ones that suit you best, but more importantly by having a mixed portfolio of several LICs you can achieve great diversification (hundreds of companies) while at the same time realising an average yield above 5% (plus franking) and an average total return above 10%.

I've been using this strategy for many years and found it superior to plain ETFs or index funds. Not only that, dividend payment is much more stable and at the stage I'm at that suits me well.

There was a time when I bought individual companies but I quickly stopped doing that after realising I knew too little.

hi Troung

i would be very interested to know some of the securities you've purchased. i know nothing about this class of assets and am keen to learn.
 
Hi WM
My first love is property of course, but I don't want a sh#t load of resi properties and all the associated down side to this, ie maintenance issues, tenants etc etc. I have had my fair share of issues. I see property as a great vehicle to make money, but looking at spreading it around and making life very simple.

I think a balance would be great, so what I would like to do is open up a Comsec account and look at blue chip shares which historically are winners, CBA, Woolworths, Wesfarmers, etc.

I am pretty conservative, but by diversifying I have a mix. I will still own property but I personally want other income streams from other asset classes. The other option is CIP, however I like the liquidity of shares, but will not exclude this either.

Cheers
MTR:)


I know several people of the forum who made money in the property market last cycle only to loose it in shares and other investments .

It's harder than everyone thinks and like gambling , people only tell you about their wins......

I like shares and one day I will make money in the market but so far I haven't:rolleyes: . My best ever investment decision was to not go in the market in a big way about 6 months before the GFC . I had my plan and finally some money but I spent a bit of time analysing the market and decided it looked toppy ( technical term ..) .

If you go in , spend some time learning and don't go in with anything you cant afford to loose .

Tenant Hassels ?? Alternative is too go into nice properties , less hassels.

Our first properties were bottom of the market in logan , made money but geeeeeze some tenants :(:( . Rocky we bought a couple of steps up from the bottom and had no tenant issues . This cycle we've moved into nicer areas . Our Current IP's are in Newtown in Hobart , Mosman and Manly in Sydney and Manly / Wynnum in Brisbane . No tenant drama's and smaller number of properties to manage.

Cliff
 
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. I would consider them lower risk than Australian banks.

Been thinking the same with some of the prices they are now set at,but if you study them the top section are all on solid ground,and very hard to project their behavior into the future last time around share prices did not go down 80% most just above 45% anyone that bought CBA just after the CFC and held those units up till now and reinvested the div's would be thinking sell now or just let it compound away..imho..
 
Common Sense On Mutual Funds, by John C Bogle

I have read Common Sense on Mutual Funds by John Bogle several times. Very enlightening read. The Vanguard VAS fund with 0.15 per cent management fees has proven to be a standout performer.

I too have a well thumbed copy of this little book.I am always refreshing my reading of it. I especially like the quotes from people like Buffett and Munger.

One Warren Buffett quote that stands out..........

"Most investors, both institutional and individual, will find the that the best way to own common stocks is through an index fund that charges minimal fees.Those following this path are sure to beat the net results ( after fees and expenses) delivered by the great majority of investment professionals."
 
hi Troung

i would be very interested to know some of the securities you've purchased. i know nothing about this class of assets and am keen to learn.

All the ones mentioned in my post + CIN, MIR, MFF.

It hasn't been plain sailing though. I was burned early on buying individual companies but luckily the amounts involved were small, so I decided to focus on LICs and ETFs instead.

During the GFC I was about to unload some of my shares but I procrastinated and events passed me by. In hindsight I would have regretted it if I had sold then.
 
There's so many different approaches to investing in the sharemarket, you really have to find your own way forwards and find an approach that suits you individually.

And this usually means doing some extra study/reading for yourself to understand things in greater depth.

Otherwise you can go from one approach to another and take on other people's philosophical and investing personality biases without understanding why one approach is really better or worse than another.

And the reality is that each approach has its own drawbacks, even the ones that sound great in theory and make perfect sense.
 
There's so many different approaches to investing in the sharemarket, you really have to find your own way forwards and find an approach that suits you individually.
...
And the reality is that each approach has its own drawbacks, even the ones that sound great in theory and make perfect sense.

And IMHO whatever approach you choose make sure it atleast beats the broadbased index (aka S&P ASX200/300) over the long term. Otherwise you are just wasting your time and energy.

It is very important to measure your approach constantly and only pursue it if it can consistently beat the index. It might seam obvious but lot of people forget to do this. History has shown over the long term 15yrs+ it is very very hard to beat the index.

Cheers,
Oracle.
 
Spoke to a couple of companies/brokers yesterday, and as mentioned just doing some ground work at the moment.

I mentioned that my strategy would be long term hold, using my own cash and basically chasing quality stocks/businesses with higher yields, but happy to mix it a little.

This seemed to be the common reply I received from most.

Join Comsec, purchase your own shares, keep costs down and can not go too wrong purchasing the top 20 blue chip Australian shares/companies.

Also mentioned good idea to mix it with some international shares and this is difficult to do on my own, so I would need to used some form of managed fund
.

This seems like a very simple approach, but then again if I am going to be a passive investor and just drip feed money into shares and not going to access these funds, perhaps this is OK. Seems like many traders don't actually do that well, and I certainly don't have the personality for this game/trading that is.

MTR:)
 
I have been an investor in shares for over 20 years. When I calculated that the returns I made from buying and holding broad based low cost Listed Investment Companies like AFI and Argo beat the returns that I generated from buying and selling individual shares, I realised that the way to make money in the market was to buy AFI, or Argo, or even better, the Index Fund ETFs like STW or VAS.
No CGT. No timing. Just benefiting from the long term increase in dividends and capital appreciation. It is very hard to predict the areas of the market that will do well from year to year, and by buying the index you get the average of the performance of all the professional investors. But, you do not pay the fees that you would pay if you invest in managed funds.
You can also diversify into international funds by buying ETFs on the ASX that cover the whole world. Vanguard's VTS and VEU are examples.
I would recommend books on the subject by John Bogle, Jeremy Siegel and Burton Malkiel. They make compelling arguments for investing in equities, and for Index Funds as the vehicle to use.

Mur. Do you know if Australians can buy into VAS direct (ie the us fund not the Australian fund). It is USD based and has a dividend re-investment plan. Whereas the Australian equivalent is AUD based, and won't re-invest.

I dont have capital now, but excess cash flow. My plan/idea was to purchase small quantities regularly (a couple of thousand$ monthly), and slowly build up the base.

Blacky
 
Mur. Do you know if Australians can buy into VAS direct (ie the us fund not the Australian fund). It is USD based and has a dividend re-investment plan. Whereas the Australian equivalent is AUD based, and won't re-invest.

I dont have capital now, but excess cash flow. My plan/idea was to purchase small quantities regularly (a couple of thousand$ monthly), and slowly build up the base.

Blacky

I think the fund you are talking about is the Vanguard VTS fund. Total Market Shares Index. You will need a broker to assist with your trades.
 
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