Interesting.
I get it, we should be chasing good quality companies first, not yield.
OK, what if I can do both, for example some of the bank shares that are sound good quality companies that also provide good yield??
MTR
High Yielding Shares Again
- Thread starter MTR
- Start date
Interesting.
I get it, we should be chasing good quality companies first, not yield.
OK, what if I can do both, for example some of the bank shares that are sound good quality companies that also provide good yield??
MTR
I hold TLS shares atm. Was nearly 3K up the other week. Last week I lost about half of that. I buy TLS for its divi and also it holds about 7 bil in cash. Also the govt is suppose to give tls 11 bil re NBN. Hope Abbott doesn't renig on that!
People tell me to buy US stocks coz they are at all time highs - good reason NOT to buy there IMO.
People tell me to buy US stocks coz they are at all time highs - good reason NOT to buy there IMO.
In reality nobody can predict the market 100%.
I agree that over the long term in most shares you can make money- I've missed out on 10 baggers because I sold out for a small profit. More money in real estate I think- but I like to dabble in shares, it can get the heart pumping real quick!
I agree that over the long term in most shares you can make money- I've missed out on 10 baggers because I sold out for a small profit. More money in real estate I think- but I like to dabble in shares, it can get the heart pumping real quick!
Hi MTR - As you might know from my previous posts I hold a significant amount in an Australian Vanguard high yield share managed fund. The fees are extremely low, the fund holds about 40% in the banks and other high yield, blue chip companies. All the details are in the prospectus. Dividends are paid every quarter and its really nice to see income coming in without anything going out.
I drip feed automatically on a monthly basis set up on Bpay. As China says if I see a headline adverse to shares and they drop 1 or 2 % I will go to BPay and inject a bit more. It couldn't be any easier. I would eventually like to see a weighting of around 50/50 with shares and property. It really is a boring, tried and tested strategy - won't make you rich over night but the discipline of dollar cost averaging over time and reinvesting all dividends into the fund has paid off for me. I also hold half in wifes name and half in my name to minimise tax once I stop full time work.
I'm very interested how you and others approach this as it forms and will form a greater part of my wealth moving forward. I'm actually thinking of opening up a more balanced/conservative Vanguard fund with a mix of shares, bonds, property etc as I get older and want to protect my capital.
good luck - it appears you don't need it!
I drip feed automatically on a monthly basis set up on Bpay. As China says if I see a headline adverse to shares and they drop 1 or 2 % I will go to BPay and inject a bit more. It couldn't be any easier. I would eventually like to see a weighting of around 50/50 with shares and property. It really is a boring, tried and tested strategy - won't make you rich over night but the discipline of dollar cost averaging over time and reinvesting all dividends into the fund has paid off for me. I also hold half in wifes name and half in my name to minimise tax once I stop full time work.
I'm very interested how you and others approach this as it forms and will form a greater part of my wealth moving forward. I'm actually thinking of opening up a more balanced/conservative Vanguard fund with a mix of shares, bonds, property etc as I get older and want to protect my capital.
good luck - it appears you don't need it!
Well heres my shares experience: Opened a Comsec account around 2 years ago. Read a few books about investing in shares but I really have no idea, trying to learn as I go. I buy a small amount of shares every month in 1 of these blue chip companies: NAB, RIO, STO, QBE, MYX, STO, WOW, CCL. I buy shares in whichever of these looks the best value. Down a total of 8% at the moment but they all go up and down when I check once a month. Most pay dividends as well. I probably should buy shares in each of these each month but I haven't got the money.
I think I need to go for a managed fund because i haven't the time or skill to invest in shares.
Cheers, nat
I think I need to go for a managed fund because i haven't the time or skill to invest in shares.
Cheers, nat
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Hi Oscar, I too predominantly manage equities exposure in a passive manner but don't use a market cap approach. Such an approach that says, as a share increases in price, I should buy more of it doesn't sit well with me. I simply equal weight ASX20 and use a "fundamental" index approach for broader exposure.
Take a look at http://www.researchaffiliates.com/Our Ideas/Insights/Smart Beta/Pages/home.aspx for some alternative beta strategies. Rob Arnott of research affiliates is an extremely highly regarded investment thinker and his "Fundamental Index" approach is worth considering and can be bought as an ETF across many markets. http://www.ftse.com/Indices/FTSE_RAFI_Index_Series/index.jsp
Watch this brief video from Warren - link
Nowadays, I just invest in low costs index fund ETFs using dollar cost averaging. Particularly the ASX300 index ETF fund from Vanguard. You can find more details here
It is not the highest yielding fund you can find. But sometimes in order to get yield you lose out on capital growth. Companies that pay high dividends are normally the ones who fail to re-invest the profits back into the company and grow.
So I understand yield can be important, but always look at the total returns. For eg. two blue chips stocks NAB and Telstra have their prices at same levels they were 10 years ago, even though both pay good dividends. But when you look at total returns from both stocks it would be less than the market returns (dividends + CG) over the past 10 years.
Cheers,
Oracle.
If you want to bounce your ideas around, Id be happy to help.
Id steer well clear of insurance companies, personally - when things go wrong, they are the first to be shorted.
AMP used to pay a cracker dividend, but their share price....
Index funds are slow and steady and some pay reasonable dividends.
I try to tell people that a 4% dividend is no good if the stock moves 2% intraday. It seems some people still ignore this. ASX stocks can swing wildly by global standards and a good divvy can disappear in EOFY/May/October valuations.
A company's fundamentals are worth jack sheet in tough times and the swings and roundabouts havent settled yet. Yields can drop / disappear overnight. Look at QANTAS. Look at T2/T3. Look at Myer. Dividends be damned, these were bulls++t stocks and still are. And who got burned? Everyone and their super funds.
Buying any stock leaves you wildly exposed to institutional predators - and those psychotropic b+st+rds are everywhere. That's my $0.02.
Id steer well clear of insurance companies, personally - when things go wrong, they are the first to be shorted.
AMP used to pay a cracker dividend, but their share price....
Index funds are slow and steady and some pay reasonable dividends.
I try to tell people that a 4% dividend is no good if the stock moves 2% intraday. It seems some people still ignore this. ASX stocks can swing wildly by global standards and a good divvy can disappear in EOFY/May/October valuations.
A company's fundamentals are worth jack sheet in tough times and the swings and roundabouts havent settled yet. Yields can drop / disappear overnight. Look at QANTAS. Look at T2/T3. Look at Myer. Dividends be damned, these were bulls++t stocks and still are. And who got burned? Everyone and their super funds.
Buying any stock leaves you wildly exposed to institutional predators - and those psychotropic b+st+rds are everywhere. That's my $0.02.
At some stage one needs to take action. We can't be constantly paralysed by the what ifs. We have to deal with the consequences of our actions. After all its only money.
Brings me back to Charlie And The Chocolate Factory: The scene where Charlie has just won the golden ticket, but wants to sell it so his family can get some cash. Then the Grandpa gives a great speech about living life to the full, and why would one give up life experience for something 'as common as money'.
There is plenty of space to fill between my ears, but this has always rattled around. Funny how we remember some things.
pinkboy......Kudos China - thanks!
Hi China answering the questions helps define a strategy
It's no good just jumping into any investment without a strategy
i.e. For mine I have a set asset allocation and parameters, that if breached, assist me in re-balancing where required
I add to the holdings every three months and add to it according to my asset allocation targets and re-balancing ranges
Back to the subject of shares.
I opened up a Commsec account earlier this year. My basic strategy is this:
ASX Top 50 shares, >5% yield, 100% franked dividend.
So I have 9x shares in my portfolio (2x shares are just under the 5% yield, but had to include them to diversify away from financial heavy portfolio). Each week, I just average down the worst performer %age wise in my portfolio. So far my portfolio overall is positive....just. With dividends it would be say 2.5-3% in front so far. I just use the dividends as extra funds to average down the worst performer.
So far so good, but a few months is no indication weather this strategy works or not. Im just doing it instead of putting my cash in the bank. I feel this would e working slightly harder for me than a TD. I could be wrong.
pinkboy
I opened up a Commsec account earlier this year. My basic strategy is this:
ASX Top 50 shares, >5% yield, 100% franked dividend.
So I have 9x shares in my portfolio (2x shares are just under the 5% yield, but had to include them to diversify away from financial heavy portfolio). Each week, I just average down the worst performer %age wise in my portfolio. So far my portfolio overall is positive....just. With dividends it would be say 2.5-3% in front so far. I just use the dividends as extra funds to average down the worst performer.
So far so good, but a few months is no indication weather this strategy works or not. Im just doing it instead of putting my cash in the bank. I feel this would e working slightly harder for me than a TD. I could be wrong.
pinkboy
Good thread MTR.
personally i've been looking into various ways to execute my cash flow stage when i finally pull the pin from employment. high yielding shares or securities is definitely an asset class to consider. if one can get 5 to 6% dividends fully franked consistently it balances the pain of holding either residential or commercial properties where there is some overhead in respect to time to manage these assets i.e. no repairs or maintenance, no PMs to deal with, no tax to pay on rental income, no land tax, no rates, no insurance etc the only issue at the moment is capital preservation with this class of assets.
i think a combination of RIPs and high yielding securities with a small proportion of TDs is going to be my income stream when i pull the pin. the % split between these classes is yet to be determined.
personally i've been looking into various ways to execute my cash flow stage when i finally pull the pin from employment. high yielding shares or securities is definitely an asset class to consider. if one can get 5 to 6% dividends fully franked consistently it balances the pain of holding either residential or commercial properties where there is some overhead in respect to time to manage these assets i.e. no repairs or maintenance, no PMs to deal with, no tax to pay on rental income, no land tax, no rates, no insurance etc the only issue at the moment is capital preservation with this class of assets.
i think a combination of RIPs and high yielding securities with a small proportion of TDs is going to be my income stream when i pull the pin. the % split between these classes is yet to be determined.
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.
I'm just curious as to where in one's resi investing position it is wise to divert funds into shares.
MTR, if I was in your position, I would forget trying to pick individual shares and go with an Index Fund. Vanguard have a High Yield ASX Fund.
You can check out their range of funds here:
https://www.vanguardinvestments.com.au/retail/ret/investments/managed-funds-retail.jsp#fundstab
You can check out their range of funds here:
https://www.vanguardinvestments.com.au/retail/ret/investments/managed-funds-retail.jsp#fundstab
I use the VAS ETF too. Vanguard also has a higher yielding EFT (VHY), which is currently forecasting 5.5% @ nearly 90% franked. If you can stomach the volatility of the share indices, which iron themselves out in the long run, these make an excellent low-effort, high-return, tax-effective income streams.
With Vanguard if anyone was investing with them I was wondering...
Why the High Yield fund over the ASX300?
Managed or ETF and why?
