High yields from blue chip shares

[s_t]

That's right nonrecourse - never do anything high risk - you never know what might happen. Those poor investors had absolutely no possible way of knowing what there risk was did they? I think it best just to stick to term deposits and the like.

The investors who looked outside the box and invested through Opes Prime have descended into an abyss.
http://www.abc.net.au/news/stories/2008/04/02/2205593.htm

They too were looking for a higher return but forgot the maxim higher return equates to a higher risk.

It amuses me the number of people who like to drop into a property forum like SS and prophecise about the superior returns with shares. Most punters who put their money in the share market are traders not investors and have no clue of the difference.

If you want to argue this point explain to me how it was that these "investors in opes prime" were unaware that they did not hold title over their shares. Many of these punters had considerable amounts of money "invested" in opes prime.

I made the point on this site a number of months ago that with property banks are much happier to lend with the property as security and there is no margin recall like with shares. Another sooth-sayer shot back that you could get a similar deal with margin lending

 

[chilliaa]

The investors who looked outside the box and invested through Opes Prime have descended into an abyss.
http://www.abc.net.au/news/stories/2008/04/02/2205593.htm

They too were looking for a higher return but forgot the maxim higher return equates to a higher risk.

It amuses me the number of people who like to drop into a property forum like SS and prophecise about the superior returns with shares. Most punters who put their money in the share market are traders not investors and have no clue of the difference.

If you want to argue this point explain to me how it was that these "investors in opes prime" were unaware that they did not hold title over their shares. Many of these punters had considerable amounts of money "invested" in opes prime.

I made the point on this site a number of months ago that with property banks are much happier to lend with the property as security and there is no margin recall like with shares. Another sooth-sayer shot back that you could get a similar deal with margin lending

The main difference is one strategy relies of DEBT to HOPEFULLY increase returns.
The other relies on short term mispricing of financial securities. Let me give you an extreme example: If the share price of ANZ fell to $10 because of scare mongering in the market, but its operations were SUBSTANTIALLY the same, does that mean you have to engage in the use of debt to generate a decent return??? No its the mispricing of the shares that create the opportunity.

 

[chilliaa]

Hehe the great thing about investing is that the market place is not a democracy. People can pass comments/viewpoints. But the market place is not a voting machine instead its a weighing machine.
Every investor will not be proved right or wrong by the opinions of others, instead he will be proved right or wrong by the decisions he makes and by the market.

 

[im sparticus]

But the market place is not a voting machine instead its a weighing machine.

"How can you make a blanket statement like that" even benjamin graham knew that for the short term at least the market is a voting machine

 

[chilliaa]

"How can you make a blanket statement like that" even benjamin graham knew that for the short term at least the market is a voting machine

No its still a weighing machine, opinions dont count only action as represented through a trade. In the short term, opinion can influence the 'amount weighed'

 

[im sparticus]

opinions dont count,opinion can influence

lol............................

 

[nonrecourse]

Cynicism in property investing is for fiscal pygmies

That's right nonrecourse - never do anything high risk - you never know what might happen. Those poor investors had absolutely no possible way of knowing what there risk was did they? I think it best just to stick to term deposits and the like.

My point is understand your risk and act accordingly. Opes prime investors were anything but investors they relied on someone else to manage their investments because they did not read their contracts for margin lending. Anyone that did get out.... and yes some did read the fine print and got out before the house of cards collapsed.

This is a property site that is meant to be used to further our understanding about investing in freehold REAL estate and the tax and trust structures that can facilitate that.

I don't go onto share trading sites and spill my guts on the unrelated investments that involve property or denigrate their investment choice. This site is called Somersoft Property Investment forums....... it is not about shares, preference shares, options, puts, calls, derivatives or any other esoteric pseudo security, its about REAL estate specifically freehold REAL ESTATE not boxes in the sky but real property that individuals can control their financial destiny.

I love to tear strips off of so called investment advisors & share traders who try to tell me my property investments in residential, retail, commercial and industrial property lacks diversification because its all property The fact that investment (sic) advisors push script and earn commissions somehow makes it well diversified.... ya pull my other leg sheesh!

The reality is the much of the so called investment advisors focus is on shares because there is not a lot of money to be made advising people on property investing.

If you do not control your investments someone else will be happy to skim the cream and leave you with the dross.

As for blaming the banks or brokers and being misled..... that is why I invest in REAL estate. Initially geared for up to 5 years but then it has to pay its way. No shady directors, no boards that destroy shareholders wealth and total control

The rents continue to rise because they are managed by me unlike dividends where you are dependent on the board of directors. The depreciation schedule gives me the equivalent of the franking credits of shares. I do not have to sell the property to access funds, I can use a redraw and the initial 20% + deposits when set up through trusts and loan agreements comes back as untaxed original working capital.

When you have built up a portfolio of properties and paid them off you can withdraw some equity to live on tax free each year from say property number 1 the first year to property 7 the seventh year and then start again.

At the end of our time when the children inherit our estate they may be faced with a group of properties of which up to say 50% of their value has non deductable redrawn debt and 50% ungeared equity""" What a nice tax problem for them to have!

Gotta go; took the day off tomorrow to attend the NTAA Tax structures & Asset Protection Seminar in Melbourne. No I'm not an accountant just someone who enjoys managing my own investments so I continue to have absolute control.

 

[chilliaa]

My point is understand your risk and act accordingly. Opes prime investors were anything but investors they relied on someone else to manage their investments because they did not read their contracts for margin lending. Anyone that did get out.... and yes some did read the fine print and got out before the house of cards collapsed.

This is a property site that is meant to be used to further our understanding about investing in freehold REAL estate and the tax and trust structures that can facilitate that.

I don't go onto share trading sites and spill my guts on the unrelated investments that involve property or denigrate their investment choice. This site is called Somersoft Property Investment forums....... it is not about shares, preference shares, options, puts, calls, derivatives or any other esoteric pseudo security, its about REAL estate specifically freehold REAL ESTATE not boxes in the sky but real property that individuals can control their financial destiny.

I love to tear strips off of so called investment advisors & share traders who try to tell me my property investments in residential, retail, commercial and industrial property lacks diversification because its all property The fact that investment (sic) advisors push script and earn commissions somehow makes it well diversified.... ya pull my other leg sheesh!

The reality is the much of the so called investment advisors focus is on shares because there is not a lot of money to be made advising people on property investing.

If you do not control your investments someone else will be happy to skim the cream and leave you with the dross.

As for blaming the banks or brokers and being misled..... that is why I invest in REAL estate. Initially geared for up to 5 years but then it has to pay its way. No shady directors, no boards that destroy shareholders wealth and total control

The rents continue to rise because they are managed by me unlike dividends where you are dependent on the board of directors. The depreciation schedule gives me the equivalent of the franking credits of shares. I do not have to sell the property to access funds, I can use a redraw and the initial 20% + deposits when set up through trusts and loan agreements comes back as untaxed original working capital.

When you have built up a portfolio of properties and paid them off you can withdraw some equity to live on tax free each year from say property number 1 the first year to property 7 the seventh year and then start again.

At the end of our time when the children inherit our estate they may be faced with a group of properties of which up to say 50% of their value has non deductable redrawn debt and 50% ungeared equity""" What a nice tax problem for them to have!

Gotta go; took the day off tomorrow to attend the NTAA Tax structures & Asset Protection Seminar in Melbourne. No I'm not an accountant just someone who enjoys managing my own investments so I continue to have absolute control.

Whilst i mostly agree with your comments, at the end of the day property is like every asset class it will have times of out performance and times of underperformance.
I am fundamentally a value driven investor. Most of my money is still in property. However i feel that property, especially residential property as had a VERY good run post 1997.
At this point of time i believe shares offer a more attractive long term return than property and thats why i am allocating NEW capital to shares.

At the end of the day, returns are governed by two main criteria:
1) the future return on the asset class
2) the price paid for that asset class.

Overpaying for an asset class will impair the future return.

 

[Alex P Keaton]

A good site for share questions is
www.invested.com.au

cool thanks I havent come across that one yet. Looks good

 

[Rino]

My point is understand your risk and act accordingly. Opes prime investors were anything but investors they relied on someone else to manage their investments because they did not read their contracts for margin lending. Anyone that did get out.... and yes some did read the fine print and got out before the house of cards collapsed.

This is a property site that is meant to be used to further our understanding about investing in freehold REAL estate and the tax and trust structures that can facilitate that.

I don't go onto share trading sites and spill my guts on the unrelated investments that involve property or denigrate their investment choice. This site is called Somersoft Property Investment forums....... it is not about shares, preference shares, options, puts, calls, derivatives or any other esoteric pseudo security, its about REAL estate specifically freehold REAL ESTATE not boxes in the sky but real property that individuals can control their financial destiny.

I love to tear strips off of so called investment advisors & share traders who try to tell me my property investments in residential, retail, commercial and industrial property lacks diversification because its all property The fact that investment (sic) advisors push script and earn commissions somehow makes it well diversified.... ya pull my other leg sheesh!

The reality is the much of the so called investment advisors focus is on shares because there is not a lot of money to be made advising people on property investing.

If you do not control your investments someone else will be happy to skim the cream and leave you with the dross.

As for blaming the banks or brokers and being misled..... that is why I invest in REAL estate. Initially geared for up to 5 years but then it has to pay its way. No shady directors, no boards that destroy shareholders wealth and total control

The rents continue to rise because they are managed by me unlike dividends where you are dependent on the board of directors. The depreciation schedule gives me the equivalent of the franking credits of shares. I do not have to sell the property to access funds, I can use a redraw and the initial 20% + deposits when set up through trusts and loan agreements comes back as untaxed original working capital.

When you have built up a portfolio of properties and paid them off you can withdraw some equity to live on tax free each year from say property number 1 the first year to property 7 the seventh year and then start again.

At the end of our time when the children inherit our estate they may be faced with a group of properties of which up to say 50% of their value has non deductable redrawn debt and 50% ungeared equity""" What a nice tax problem for them to have!

Gotta go; took the day off tomorrow to attend the NTAA Tax structures & Asset Protection Seminar in Melbourne. No I'm not an accountant just someone who enjoys managing my own investments so I continue to have absolute control.

My God what a drama queen.

Any investor worth his weight knows there is nothing to argue about when it comes to quality blue chip shares vs property. It's just not a bad idea to have a bit of both.

 

[jingo]

And further if you can look outside the box you can invest in other securities apart from the mother share. I recently bought some preference shares in a stock that WILL pay a net yld of 9.2% fully franked, so long as the mother shares pay ANY dividend. In addition the difference between the face value and market value has created a margin of safety where the value of the mother common share has to fall by 55% before i have any exposure to a loss situation.
In addition i will be able to convert the preference shares into ordinary shares at a fixed profit of more than 30% in a few years time, once again with a margin of safety of the mother common share falling less than 55%.

Please dont ask me for details of this because its a relatively unliquid position, and i am trying to increase my exposure.
I mention this merely to highlight that you always must look outside the square.

Thanks chillia,

I am looking for shares that produce high yields. I shall start looking further afield from the mother share.

I think many of us on here invest in both property and shares. Can't see a problem in discussing both on this site, and the two can be used concurrently to create a diverse and effective portfolio.

Regards Jason.