How to invest 100K

First time share investor here. FYI, I am not looking for trading. I am looking for investing.

I have about 100K which I can either park in an IP offset or put in shares. I don't have any stocks at the moment but it is something that I definitely want to have in my portfolio as I don't want to expose myself extensively to property asset class. What is the best course of action here? Cash flow will be my preference at this stage.

 

Read the LIC and ETF threads here.

Possible trap for cash flow investors is looking at spot yield only and not growth. Also some ETFs are "high yield" and include companies based on certain metrics which often results in high turnover, more fees, capital gains events and some rubbish companies.

Another thing is don't open your brokerage account until you are ready to go. Most of the big four (and others) offer great deals such as $500 brokerage or x free trades in the first month or similar.

 

Why use the cash if buying another asset class? Keep the cash and borrow for investment.

 

You mean borrow against PPOR?

Onto it now. Any recommendations? Would you name a few LICs ETFs which you think offer cf and modest cg?

 

@hash_investor - LOC if available or share trading account (subject to margin calls).

 

Both @austing and @The Falcon have shared their holdings in the LIC and ETF threads. But more importantly, what is your timeline?

 

Maybe look at it like this ,if you join one of the several trading sites linked too several banks most will cover 80% on margin loans plus several free trades per month,now with 100k ..Then look at the portfolio if you want a average 10% return then maybe over 70% will range from 2% into 20% on any standard deviation 16 week span,but some will drop over 10% depending on the size of the portfolio,one single holding or buy into several so you would want to understand the sleep no night risk factor and the way a margin call works,then have a read of the "Pareto Principle"..imho.
Pareto principle - Wikipedia, the free encyclopedia

 

If you have a PPoR and loan then pay that off and reborrow. (possible) Free kick of $100k non deductible to deductible debt.

Not recommendations, I will name a few that are commonly mentioned (disclaimer I own them all).

ETFs - VAS (for Australian) + VGS (for international, probably excluded based on yield) - After reading more on ETFs these two I will continue to add to. As an opinion ETFs with more complex rules I don't think offer a value add and with increased costs this results in a net loss in value.
LICs - ARG, MLT, WHF, BKI, QVE - Some offer better value than others at the moment IMO, make your own judgement. For better or worse I largely ignored NTA when I used equity to purchase LICs earlier this year.

 

I am going through those threads. They are just too long and lots of useless posts there too.

I don't have a timeline as such. I am looking to build a portfolio for the long term and looking to keep it.

 

Then wouldn't you say the time spent reading those threads would be well worth it? As with anything in life, you get out what you put in.

 

Just looking at your above posts suggests you started reading the LIC / ETF threads at 8.16 AM (or perhaps 7.13 AM) today then at 9.22 AM posted that they are too long and useless? As a new share investor about to throw $100K at the market may I kindly suggest you try to make the time to read these threads.

Not trying to be a smartar*e but it will be time well spent and will have you feeling much more comfortable about what you're investing in and less likely to do something stupid when volitility goes through the roof.

 

@hash_investor -- don't be intimidated by the 60+ pages on the LIC thread, there are so many nuggets of gold in terms of information and experience in there. I read through it thrice, and still find something new to learn from it. I remember asking a question about DRP and, realized when I read it again, the question had already been answered in earlier pages. It just depends on your focus at that point when you are reading.

Good to hear it's a long term plan, because LICs and ETFs are long term investments, which would pay handsome dividends.

I'm only on my L-plates here so take what I say with a grain of salt. Good luck.

 

I always maintained that I am going through those threads. They are indeed long but I am still going through them. There are some useless posts but I am still going through them. I am not complaining just putting it out there and justifying the time it is taking for me to grab all that knowledge.

Never said I will not read it because they are long and useless.

 

In fact, I would go even further. Even after reading (and perhaps re-reading) the threads mentioned, spend some time away from the forum and think carefully about what your long term goals are, what kind of tolerance you have towards risk and what your capacity is to absorb volatility. No use in following advice in those threads blindly (not suggesting you will) unless it is customised to your own unique set of personal circumstances.

 

Personally, I've got VAS and VGS in super with long term hold timeframe. As many here mentioned before those two are a perfect portfolio core ETFs. ETF and LIC threads help to understand things better. Going to read those again...

 

Its a form of debt recycling that converts non deducible debt (cash in offset) to deductible debt by paying down your PPOR loan and re-borrowing the 100k and separating it into a separate split for 100k.