Asset Allocation

Discussion in 'Share Investing Strategies, Theories & Education' started by dunno, 25th Feb, 2019.

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  1. ChrisP73

    ChrisP73 Well-Known Member

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    Hey all - not directly related to asset allocation per se , but there's a great resource on the asx website that contains a spreadsheet of all asx listed investment 'products' - EFTs, LICs, Infrastructure companies, A-REITS, as well as key Australian indexes S&P/ASX 200 Accumulation, S&P/ASX Small Ords Accumulation, S&P/ASX 200 A-REIT Accumulation, S&P/ASX Infrastructure Index Accumulation etc.

    ASX Investment Products Monthly Update

    Lots of useful data including MERs, FUM, inflows/outflows, transactions/trades/liquidity, performance, historical distribution etc, etc.

    Not the only place you can find most this information - but I've found it very useful being in spreadsheet format - link to Jan 19 update here

    Enjoy :)
     
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  2. Hodor

    Hodor Well-Known Member

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    I agree with what you are saying.

    What are some of your criteria to identify these growth companies?
    How do you decide entry and exit?

    Lots of people try a similar strategy and do very poorly. It seems you have a talent for identifying growth companies do care to share or point in the right direction to learn. How did you learn?
     
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  3. JasonC

    JasonC Well-Known Member

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    I'll come in late and share my current investment asset allocation.

    Aus Share 9.73%
    Intl Share 3.46%
    Bond/Fixed 0.66%
    Global Infr 0.75%
    Global Prop 0.17%
    Cash 0.17%
    Aus Resi Prop 60.62%
    Aus Comm Prop 18.34%
    P2P 6.12%

    This is excluding our PPOR, so residential exposure if extremely high. Also excluding fully chocked offset accounts so the cash percentage is probably artificially low.

    I'm at the stage of my journey of re-balancing away from Residential prop so expect that this balance will change dramatically over the next five years. This thread has been useful in prompting me to think more about what this balance should in a 5/10 years time.

    Regards,

    Jason
     
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  4. ChrisP73

    ChrisP73 Well-Known Member

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    @JasonC feels like I'm in a similar situation.

    Australian Shares 31%
    International Shares 13%
    Cash, Fixed Interest 9%
    Property Trusts 3%
    Infra & Private Equity 1%
    Direct Property 44%

    As per you, this excludes PPOR (so residential exposure high) and offset cash.

    Australian shares and direct property held in individual names (not joint), as well as exposure through super. International shares, fixed interest, property trusts, infrastructure and private equity all through super exposure. The cash/fixed interest in super is higher than I'd like and is destined to be re-balanced into international shares when I see value (ie not right now - just got to be patient ;))

    At this point accumulating Australian shares via broad based low cost index or equivalent outside super, and targeting build up of international share exposure in super again via broad based low cost index options.

    No more direct property required. Holdings are high net yield, low maintenance, with significant upside through future developer buyout - not factoring this in though. Makes great security to borrow at residential mortgage rates to invest in Australian shares.
     
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  5. Greedo

    Greedo Well-Known Member

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    Another late contribution here.

    Excluding 2xIPs which are pretty highly leveraged, my allocation is skewed by purchases made almost at the bottom of GFC and the subsequent growth. I borrowed a small amount not knowing what I was doing only that it was potentially a once in a generation type event. I focused on other things and didn’t purchase any further equities until last year!

    - Direct shares from GFC 55% (Big 4, WES, WOW)
    - LICs 25% (ARG, BKI, WHF)
    - VAE 7%
    - VAS 3.5%
    - other directs 10% (SYD and others)

    Going forward the plan is to increase holding in VAS up to about 25%. I’m concentrating on Australia only equities over the next 3 years to build a base level of dividend income that can theoretically be used for all current debt commitments but also provide mental freedom to potentially change jobs and other personal stuff. This won’t be buys that are yield traps like VHY. I’m ok with 4-5% yield for diversified assets. I’m also hoping to add some more infrastructure. I’ll look into IFRA. Not sure on REITs at this stage.

    Post that I will look to diversify internationally through ETFs through VGS and VAE up to 25% hopefully!

    Cheers
     
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  6. Greedo

    Greedo Well-Known Member

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    Mate, great name. I’m a ChrisP75!
     
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  7. Nodrog

    Nodrog Well-Known Member

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    Getting back to VHY vs VAS it surprises me how well VHY has done given what I would have thought especially the 10 year returns. But perhaps the chase for yield contributed? Note that I’ve used the unlisted versions of the funds for longer history:

    2165B7BC-E380-4A53-BF37-5AD70E6E59C2.jpeg

    Of course depending on one’s tax circumstances portfolio turnover suggests a worse tax outcome given the much higher turnover of VHY:

    4EC7ADCF-C73E-4FC0-81F4-AA8CE2EC8C8A.jpeg

    Finally I would be uncomfortable with the even higher concentration risk of VHY vs VAS:

    9971E3A4-7E88-4C08-94FA-F4A92DFF4DA9.jpeg
     
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  8. Fargo

    Fargo Well-Known Member

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    I don't plan an exit that is the secret, almost companies I buy are for the long term if they drop it is good I buy more, when they rise I sell to keep balanced. I buy with a minimum 5 year view and the share are often going through a cash burn scaling, they are often at what appears very high valuations I simply get the idea to look at them from Morningstars list of most overvalued companies. Morningstar have a different view on how to value companies. than the most successful advisors which was explained to me by Matt Joas from Livewire and Joe Mayger AFR. I believe in hedging my bets and the first rule don't loose money. You have to ask what do people see in these companies that are considered overvalued and find out. I choose to look at small cap Tech stocks often with low liquidity so a very limited field, and take small position depending on conviction, then put in some buy orders at perhaps - 5% as the price falls to near it I may place an order lower again. One day I will look and the order will be filled and I will already be 5% up as often the price will momentarily dip for only seconds, caused by large fund managers just dumping who don't care what price. If the price goes up I may buy more but have an averaged down cost. For example I took a position on XRO at what appeared a very high price $32, but you have to enter somewhere but as the price fell I didn't sell kept buying more and more as the price fell loaded up at $12.00 as nothing changed with the company and it still had blue sky. I advised on sommersoft to buy then. I sold the $33 ones at about $55 when I became very overweight and to limit taxation The shares owe me nothing now I consider then free.
     
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  9. SatayKing

    SatayKing Well-Known Member

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    If you don't mind I'll add a couple of other points.

    11. If you tell others, inadvertently or otherwise, of your preferred investment approach, be prepared to cop criticism. Some of it will be good and a lot could be bad.

    12. Try and ignore it and not take it to heart.
     
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  10. Nodrog

    Nodrog Well-Known Member

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    Great points.

    I tried to restrict my list to the popular “10 Rules of ....”.:)
     
  11. SatayKing

    SatayKing Well-Known Member

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    There is a religious joke there but I'm going to stay well away from it.
     
  12. Nodrog

    Nodrog Well-Known Member

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    Usually I combine the 10 into a single commandment. That is, When in doubt drink more beer.

    I have absolutely no idea of the relevance of this to what’s being discussed but it just popped into my head:confused:.
     
  13. PKFFW

    PKFFW Well-Known Member

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    I'm a little late to this thread but here's my allocation.......

    Inside Superannuation:
    60% VGS
    40% VAS
    I intend to increase VGS to 75% over time. This provides the entirety of our international diversification.

    Current outside Superannuation:
    58% VAS
    42% residential property which includes our PPOR, currently rented out and in the process of being sold.

    So within the next couple of months our asset allocation outside Super will look more like......
    86% VAS (or possibly VAS and ARG, MLT and maybe BKI but still undecided on the LICs)
    14% residential property

    In 5 years time the 14% resi prop will be sold off in the most tax efficient manner we can and the proceeds put into VAS and any LICs we have.
     
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  14. Redwing

    Redwing Well-Known Member

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    @Nodrog VHY have been in and out of RIO holdings a few times also haven't they?
     
  15. Nodrog

    Nodrog Well-Known Member

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    Yes, from memory. Resources being cyclical in nature can have erratic dividends. So given VHY’s high forcast yield criteria stocks are in or out depending on whether they meet the rules. Never been a fan a smart beta ETFs in general. Churn, high tax and overall seldom beat the simple cap weighted index over the long term.
     
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  16. almostthere

    almostthere Well-Known Member

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    My current allocation :

    MLT 23.07%
    A200 29.41%
    BKI 12.59%
    NAB 10.75%
    WBC 11.50%
    QVE 12.68 %

    Super contributions is 100% International shares.
     
  17. SatayKing

    SatayKing Well-Known Member

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    My preferred allocation is 75% OZ and 25% International. It's a rough split and there is no rigid adherence to it. However, when I feel it's out of kilter, I start to bring it back.

    My personal holdings were 67%/33%.

    I have commenced to do that with a couple of recent purchases. Plus, being me, I also wanted to round the numbers. I sometimes think I have mild OCD. It jars to some extent when the holdings don't have an even number and the last three digits do not end in 000.

    The split in super is a bit underweight internationally but my preferred holding, VGS, seems to me to be a little too pricey so I'm holding off Nor am I inclined to add to PMC.

    As to property, the only one I hold directly is my home and I don't view it as an asset in the usual sense. It provides me shelter and presently that's its only value to me. Useful for keeping the rain off my bed.
     
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  18. Islay

    Islay Well-Known Member

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    I have not given an asset allocation yet. Truth is we are not as organised as many of you yet! Consider it a work in progress! In terms of shares we are about 80% Australian, mostly direct holdings but some in LICs. The 20% of international shares are via etfs and managed funds. Also hold cash, property, and direct business investments in different investment structures. The plan is to simplify over the next 5-10 years - no rush
     
  19. Snowball

    Snowball Well-Known Member

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    I suppose I should share too. Breakdown currently is...

    40% property.
    35% shares.
    15% cash.
    5% p2p lending.

    Shares are 100% Oz.

    Mostly MLT BKI ARG VAS. Also QVE and a few REITs.

    Shares allocation is increasing steadily as we sell off property over 10 years.

    Cash is to live on, pay for remaining properties and DCA into shares.

    Eventually be almost all shares and cash.

    International shares (VGS) will make an appearance only after hefty income stream is built from Oz shares.
     
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  20. Nodrog

    Nodrog Well-Known Member

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    :eek: Now you’ve ruined your future blog post on this. I had bets running on what you potentially held but now I’ll be in the poorhouse. FIREees from near and far had been hanging out for you to expose your portfolio:).

    I’ll be ruined I tell you, ruined:(.