IP3 vs Shares?

I use the S&P ASX200 Franking Adjusted Annual Total Return Index - Tax Exempt

S&P/ASX 200 Franking Credit Adjusted Annual Total Return Index (Tax-Exempt) - S&P Dow Jones Indices

As you can see the chart of the above index is much higher than it was 10 years ago.



Cheers
Oracle.

 

OP has little intention of buying PPOR in Aus from what I've gathered from copious other threads?

I understand your urgency at wanting to put that 100k to work for you asap @Realist35. Perhaps keep a little up your sleeve for a rainy day. What's the back up plan should things get "hard"?

 

Thanks for the suggestion, definitely keeping a stash for rainy days.

No PPOR for now, as Perth is very volatile and wouldn't buy there at the moment. Things might change though.

 

Sorry for a dumb question, but does this chart include dividend (including franking credits) reinvestment?

Thanks

 

It includes dividends re-invested and franking credits in zero tax exempt scenario. Not a real world scenario but you can see total returns of the investments without effects of tax.

Cheers,
Oracle.

 

Yes you are missing something. For example, if you bought LICs, you would have a dividend return each year. Think also, if you bought an IP in some Perth suburbs in 2007 you would have not recovered the losses 10 years later.

If you want a reliable and consistent income return, LICs and ETFs can provide that.

 

Hmmm all these index funds, LIC's and ETF's are looking more and more interesting. Especially when this awesome spreadsheet by @truong is taken into account. It shows leveraged property performs very similar to unleveraged shares.

If I'm to invest 100k in shares (index funds, ETF or LIC):

1. Should I "time the market" and wait or jump in now? My understanding is that with index funds, LIC's and ETF's it's impossible to time the market as they represent the overall market/many different companies, not just one company.
2. Would it be better to invest in 20k lots every couple of months (or maybe quarterly) or just all in one go?
3. For a beginner like myself, is it better to invest in the mix of the 3 (LIC's, index fund and ETF) or just one of them? I assume this is a hard question and it's more a personal choice.

Thanks

 

Hey thanks.

Just thinking now, is Perth the only capital where a rolling 10yr real growth decreased? I'm pretty sure if you look into Sidney, Brisbane and Melbourne, and select any point in time over the last 40 years, the last 10 year growth would always be positive. And I mean significantly positive! Not sure about smaller capitals though.

This just deters me from investing in Perth. Much like a mining town with boom/bust cycles. Any inexperienced investors could have invested in SMB over the last 40 years and made pots of money. Not the case for Perth. Much like a mining town.

From my understanding Brisbane is also dependent on mining to a certain extent. However after the 2013 bust Perth started falling and Brisbane kept rising (although moderately).

 

Have you read all of this thread yet?
Beginner's Guide to Investing in Listed Investment Companies

I believe it will provide answers to some of your questions. I also found reading the entire LICs thread very helpful. I know it's over 100 pages now - but it's very helpful.

 

OMG I just spent the last 6 months reading about property, another 6 months of reading

 

Not correct. Look at Sydney 2003 to 2013. Not significantly positive at all. Melbourne looks like it was pretty dead between 1989 and 1999. We are at the tail end of a big Sydney boom and a big Melbourne boom. Who knows what will happen over the next 10 years?

 

Good point! I suppose that underlines the importance of investing with a minimum 15 year timeframe in view.

 

Definitely, it cured my insomnia and printed, I've been able to build a garage out of the pages/brickettes .





Truthfully, I entirely agree with you.

 

Damn - you printed it??

I have actually been wondering how to get an offline copy. I was searching for a thread download button for a while there but couldn't find anything. Does anyone know who the web guy is - and can we get the 'DOWNLOAD A THREAD' functionality on this forum?

 

It is for a super account in pension mode.

 

Calling @Simon Hampel

 

...or rather post here - /Help & Feedback

 

Probably yes.

But I think it's just returns without factoring in tax. It could be for normal person below $18,200 tax free threshold for eg.

Cheers,
Oracle.

 

With the LIC Guide make sure you have version 3 attached: