LIC & LIT Could you please critique my portfolio?

No such thing as paranoia, it's just a higher state of awareness

 

given your strong preference for LICs , wouldn't WES deserve to be in at least the 3% to 5% range it has already spun-off COL and is trying to decide what to do with the Office-Works asset

( i class WES as an investment company )

BHP is classed as a 'core holding' for me but follows long cycles opportunistic buying over the decades might work well for you as well ( BHP spins-off companies as well and though unimportant in the larger portfolio , might add the odd cherry of the way whether you sell or hold BSL was once a BHP divestment , it negotiated rough times but if you hadn't paid a cent for them ... )

one might raise 'concentration risk' but your strategy of doing so through multiple managers should be educational to watch ( MIR's tendency to play with options offsetting MLT's conservative rebalancing as an example )

i might also ask AUI v. DUI they LOOK very similar but here do they stack up on results

cheers and good luck


PS investing is never safe , if it was there would be no reward to tempt you to take the risk , and nervous is a healthy reaction ( much better than smug and complacent IMHO )

 

BUT was the FIL looking for rapid growth , for example i bought into a microcap oil play OTE , it struggled for a bit , but one day a reverse take-over move and consolidation rebadged it as a fin-tech stock and listed as ISX so OTE cost me 1.4c ( a new share ) but i eventually sold ISX at $1 , when it looked like evolving into a NEO-bank , now ISX is having regulator difficulties currently

but the profit made on ISX well and truly offset several other poor results

but yes i always factored in poor choices and company failures when i chose my 'shotgun ' approach to investing

but hindsight can be very educational , and always encourage it

cheers

Kenny Rogers mentions ' know when to fold them and know when to run away' in one famous song investing works better when several skills come together

 

If that was the allocated investment to AUI, then I would say based on mathematical capability alone, investing should be outsourced - 100% VDHG.

 

sometimes those tiny differences compound i remember one 'high dividend ' ETF had an outsized holding in Toll Holdings , when TOL was taken over that ETF had a very pleasant bump in divs that year , a similar deviation could occur in any LIC ( rather than an index ETF ), however the reverse ( under-performing by being underweight in a fortunate event ) is less likely in an index ETF , so does one 'hug the index' or roll the dice hoping for a fund-manger gem every now and then .

remember 'that bump' adds extra units if you DRP

decisions , decisions

 

Let’s look at at this way.

what’s the stats on active managers underperforming the index? 70%-80% or something like that. So let’s say you have a 30% chance of picking the active manager that will outperform for you.

now speaking of rolling dice. If you go into the casino and the odds of you picking the winning cards was 30%. Would you roll the dice?

I am personally not much of a gambler so I don’t gamble full stop. If I wouldn’t gamble $50 at the casino with a 30% chance of winning I ain’t taking a gamble with my portfolio on a 30% chance of winning.

Full disclosure, I still hold active managed funds. It took me a few years and this forum to see the light and become an index convert. All future capital going into index rather than selling down active. Over time the active will become a small satellite holding beside the index funds. So contrary to what I said above I am playing that game of chance with what will soon become a small part of the portfolio.

 

my problem with the 'stats , is selective comparisons and selective benchmarks (LICs , REITs and ETFs can all be guilty of this )

IDEALLY we should have a rock solid starting point say the ARG portfolio on Jan. 1st 1990 see how that portfolio travels ( NOT allowing any portfolio changes in the stating point over the time )

sure compare ARG with the rest ( allowing changes as a separate entry )

the obvious flaw is past performances do not guarantee future returns but heck that is true in all investing

and if you want a small portion of high risk and that suits you , good

i am chasing 'growth ' so i can resist inflation ( not so i can buy a luxury yacht )

i see index funds ( as compared to high beta funds ) as different styles to a managed fund , and i want a little of both and adding the one that is currently facing headwinds hoping to get a boost in the tailwinds

the only stat ( two actually ) i care about is , i should really double my. portfolio $value BUT not wipe out the portfolio in the attempt ..

since we seem to be in uncharted territory all savvy investors should be watching and learning ( even if the portfolio is going well ) these times could become timeless lessons

used to gamble ( and i mean big odds bets , rarely a favourite ) but now i am trying to be more cautious but not be terrified to move when an opportunity appears

 

@twisted strategies , I appreciate the situation you are in and what you are trying to achieve. I hope my posts don’t come across as judgemental. My approach is different to yours because our situations are significantly different.
Sometimes I have to keep those differences in mind when critiquing or judging someone else’s responses or approaches. We tend to respond and judge or recommend things to others from our perspective and position. Though it’s done with the best of intentions.

Maybe that’s just part of the problem of giving opinions and sharing ideas on a forum in which you really only know very little about the person on the other end.

 

debates can become robust and i consider airing our different approaches as good i would like to see more 50 year old members AS WELL AS new 30 year old members

all retail folk need to become at least financially aware in what is coming if they can pick good options for them even better

cheers

 

Hey guys and girls, would love to hear your thoughts on mine.

TGR 44k
EHE 42k
BIN 41k
WBC 37k
NAB 33k
TWE 29k
IZZ 27k
SCG 24k
VEU 24k
AGL 21k
CSL 20k
FLN 20k
EML 18k
ORG 15k
TPG 15k
NXL 12k

 

Firstly welcome to the forum.

I'll try to be gentle, but really this portfolio is carrying significant uncompensated concentration risk of both specific companies and being significantly overweight in Australian equities.

NXL is a recent listing this year so I'll ignore that due to lack of historical data. It has lost over half its value since listing ... ouch.

From May 2017 - Apr 2021, this portfolio of $410k would have returned 5.78% p.a.

If you had instead invested in a simple ETF portfolio of $359k in VAS (ASX 300) and 51k in VEU (merging your IZZ and VEU holdings) you would have had a return of 8.67% p.a. over the same period.

Note, I wouldn't recommend this portfolio as it is too concentrated on the ASX and has zero exposure to the US, but I'm using it as an example of idiosyncratic risk from individual holdings leading to underperformance compared to a simple passive index.

Some further viewing

 

Thanks for the input, I appreciate it. Good food for thought.