Investing for total returns vs income stability

People focus on role models..

 

Not so,for dumdums like me the message needs to be continually hammered home.Have liked how you analysed the diffs between LIC's & ETF's & now have both.Thought provoking as one child of mine is ready to begin this journey but also great for me going forward,keep it up.

 

Income stability every day of the week, as someone mentioned no one knows the future (except me) and I foresee my income stable shares outperforming everyone else’s income volatile shares

 

At the moment I don't care about the stability of the income - just as long there is some.
Having said that - I am all LICs and no ETFs (at this stage).
I know - it doesn't make sense - but it feels right to me.

 

I have 3 LIC holdings. AFI, ARG and WAM.
Due to your continued insightful posts I have been adding funds to each one on a quarterly basis and acting on any "Specials" they offer. I would not have done this without your input on this site. I would have just left my initial capital investment in each one and not continued to add, simply just parking additional earnings in cash reserves earning a small pittance.
Now that I am winding down and looking for income stability, your posts over the years have helped steer me in the right direction. For this I thank you.
Please continue to add input as I along with other posters (I'm sure) have found your knowledge invaluable.
Now you can get back to your craft beer!!

Cheers
TAJ.

 

It makes complete sense, if you ask me.

I have 6 LICs in my portfolio at this stage. When funds and the right time comes along, I can easily envisage adding VAS and AUI to it at some stage. When the US and the rest of developed world is out of favour, I will also consider adding some VGS. I might even add VAE to it at some point in time. It is a long life (hopefully).

My broader point is I have to keep reminding myself that, within this forum, just like everywhere else, things go in cycles. LICs are all the rage and then it is not. ETFs are the way to go and then some thing else is in. I have seen it at close up multiple times and I can’t see it ever stopping.

As much as I like and respect the opinion and thought leaders on the forum, it is important to back yourself and keep doing what you consider is the best possible approach to YOU. Nobody knows your personality, temperament and behavioural tendencies better than yourself. And often times, some of our deepest instinctive tendencies are often hid from ourselves too.

Most likely, successful outcomes in investing (and elsewhere) will result in knowing yourself today much better than you did yesterday. You just have to look at the successful investors on this forum and you will see a strong undercurrent of authenticity and a conviction of belief in their abilities and mindset. Their decisions are based on what they feel is right for them and their families rather than the popular sentiment going around. Which explains why they are all so uniquely different to each other but the thread of independent thought permeates from each of them. It is always the ‘follow the fad’ mob that get burnt.

Not advice. Not aimed at anybody in particular.

 

One way of preserving capital - bury it in the back yard. I like it! But you will be fertilising and watering it won't you?

 

For me the answer to the poll would depend on how much capital is available to invest at the point of making the choice

If starting off with a small amount, I'd go for total returns

If the capital base is significantly large, then I would take the stable income route as it seems to offer better sequencing risk management.

In the context of an investing lifetime, slightly higher risk adjusted returns is probably unlikely to make up for an initial 30-50% drawdown