LIC & LIT LIC Educational Material

Discussion in 'Shares & Funds' started by Nodrog, 18th Sep, 2016.

Join Australia's most dynamic and respected property investment community
Page 1 of 2
  1. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,406
    Location:
    Buderim
    Three risk measures provide a fuller LIC picture
    Three risk measures provide a fuller LIC picture - Cuffelinks

    Capital management techniques in LICs
    Capital management techniques in LICs - Cuffelinks

    Consider a LIC before you bite into equities - Cuffelinks

    Caveat Emptor: LICs versus ETFs - Cuffelinks

    OPTIONS:
    Watch those unexercised options in LICs - Cuffelinks
    https://cuffelinks.com.au/wp-content/uploads/LIC-201512.pdf (Options article)

    NTA DISCOUNT / PREMIUM
    Why LICs trade at premiums or discounts - Cuffelinks
    Insights into LICs trading at a discount - Cuffelinks

    The evolution of Listed Investment Companies - Cuffelinks

    The major weaknesses of LICs and managed funds - Cuffelinks
     
    Last edited by a moderator: 18th Sep, 2016
    Nodrog, 18th Sep, 2016
    #1
    4,112 people like this.
  2. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,406
    Location:
    Buderim
    How to spot undervalued LICs

     
    Nodrog, 19th Sep, 2016
    #2
    2,058 people like this.
  3. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,406
    Location:
    Buderim
    Nodrog, 19th Sep, 2016
    #3
  4. pippen

    pippen Well-Known Member

    Joined:
    10th Aug, 2016
    Posts:
    1,429
    Location:
    australia
    How about articles features interviews videos etc on Peter Thornhill!?

    Anybody have any good links or insights from this guru?!
     
    pippen, 19th Sep, 2016
    #4
  5. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,406
    Location:
    Buderim
    Will create a new thread linking to the thread on PC. Not LIC specific.
     
    Nodrog, 19th Sep, 2016
    #5
    1,028 people like this.
  6. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,406
    Location:
    Buderim
    Nodrog, 27th Sep, 2016
    #6
    4 people like this.
  7. Indifference

    Indifference Well-Known Member

    Joined:
    30th Jul, 2015
    Posts:
    977
    Location:
    Banana Republic
    Thanks @austing Any chance of adding an "idiots guide" to acquiring LIC's as part of a portfolio? For example, are they bought/sold like any other share, what are the typical dividend options (ie. reinvestment etc..) & do they differ in their portfolio management to direct company shares? It might sound ridiculously rudimentary however not all of us are seasoned shareholders/traders....
     
    Indifference, 3rd Oct, 2016
    #7
  8. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,406
    Location:
    Buderim
    Maybe at some stage but I'm sure there's already plenty of similar guides already on the net. If I get a chance and I'm motivated enough I have a look to see what's around.

    Cheers
     
    Nodrog, 3rd Oct, 2016
    #8
  9. Hodor

    Hodor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,238
    Location:
    Homeless
    Yes.

    Just like other companies, some pay dividends and have reinvestment plans, some retain earnings rather than pay a dividend.

    LICs hold other companies shares and will have the combined weighted attributes of those assets. They will acquire and sell them based on their mandate (ideally, some follow it poorly). Some fancy LICs do other things like options trading which is probably a bit advanced for this discussion.

    Happy to answer any more questions or clarify.

    *Disclaimer: I'm just an enthusiastic beginner.
     
    Hodor, 3rd Oct, 2016
    #9
    2 people like this.
  10. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    * Any chance of adding an "idiots guide" to acquiring LIC's as part of a portfolio ? *

    ( major cringe )

    i would suggest neither LICs nor ETFs are suitable for 'idiots' ( no matter how 'easy ' the advertising suggests it is ) , less complicated holding them ... yes , but still plenty of research and thought needed .

    reading the monthly and quarterly reports of each LIC that interests you ( before AND after you buy ) is a good start

    also beef up your skills in maths and statistics , some put a LOT of shine on their reports ( usually at your expense )


    and LICs ( and ETFs ) can be very useful to experienced investors as well
     
    twisted strategies, 5th Oct, 2016
    #10
  11. Hodor

    Hodor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,238
    Location:
    Homeless
    I can't think of anything more suitable for those just starting out. With the major low cost LICs and index tracking ETFs like VAS and VGS you can't go too far wrong. The lowest chance you can get that they won't go bust (and everything else would along with them) and long term you are likely to do well.
     
    Hodor, 5th Oct, 2016
    #11
    2 people like this.
  12. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    but timing is the key

    most offerings aren't that cheap ( there WILL be exceptions though )

    possibly a novice would do well to research both types ( including asking a skilled advisor on the tricky questions )

    and another ( potential ) trap are new market offerings even from well-known managers (like ALI from Argo ) how much does reputation count when selecting a brand new investment vehicle.

    and of course , novices tend to be easily frightened , selling instead of holding ( or even adding extras )

    they ( the novices ) still need to think about what they are buying and how it will react in a correction ( or a full crash ) some of the boring ones SHOULD ( no guarantee ) hold their value better than others .
     
    twisted strategies, 5th Oct, 2016
    #12
  13. trinity168

    trinity168 Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    942
    Location:
    Sydney
    Or time in the market?
     
    trinity168, 5th Oct, 2016
    #13
  14. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    but will a novice show restraint in the early buying spree ??

    i was limited by odd job call-outs ( for better or worse )

    others might swim into deep waters quickly ( run out of ready cash ).

    the market could still correct this year OR jump up testing 6000(+) before Xmas .

    sometimes the divs earned before a big div. ( DRPed ) make up for not waiting for that low entry price .

    it is very hard to get it right ( without a lot of luck )

    and the worst thing you can do is worry about your decisions ( after you have done it ) learning from the outcomes is fine , but not losing sleep over it .

    i just have a 'what if ' plan for either direction ( and sideways )
     
    twisted strategies, 5th Oct, 2016
    #14
  15. trinity168

    trinity168 Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    942
    Location:
    Sydney
    Someone who has a shorter timeframe needs to time the market better. But for someone who is able to start early, then time in the market applies.

    What if You Only Invested at Market Peaks?

    As always, sleep at night factor is major.

    :cool:
     
    trinity168, 6th Oct, 2016
    #15
  16. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    although fictional the S&P 500 is a BAD benchmark to use not that the ASX top 200 ( XJO ) is a stellar example , either .

    also inflation needs to be factored in .

    but a dull and boring LIC like BKI ( near 12 month lows ) can still make generally poor market timing , relatively painless ( especially if div. yield is of major importance )

    most want one LIC to 'do it all' ( SP rise , div. growth and absolute safety AND cheap )

    over-expectation is the trap here .( imo)
     
    twisted strategies, 6th Oct, 2016
    #16
  17. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,414
    Location:
    Sydney
    For the average person who doesn't know how to choose the best stock or even a good LIC manager, there is nothing wrong with choosing a simple low cost index tracking ETF and just doing regular investments and reinvesting dividends.

    Over time, they will accumulate a decent asset base with relatively low risk.

    It's certainly better than cash in the bank or trying to pick stocks when you really have no clue.

    Of course, if you are near to retirement, your approach will need to be a bit different and certainly more defensive - but for everyone else, that's a good place to start. You can always diversify and become more specialised as you develop your skills.

    I think LICs are a little more complicated and require a bit more thought - but they are a good second step for those willing to educate themselves without resorting to the risks involved in picking individual stocks.
     
    Simon Hampel, 6th Oct, 2016
    #17
    2 people like this.
  18. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    my main gripe about novices starting with LICs ( or ETFs) is the trend to buy a big chunk ( for them) in just one or two , not leaving cash to average down , or pick up an opportunity as they are learning their way ( and what they need for their future ).

    i bought ( pseudo-LIC ) SOL ( my third holding bought ) before my first ETF and while a small holding of SOL was a great subscription , it was trying to understand the deeper workings of ETFs that was the education

    and of course it is all much easier once you have at least half a plan to work with .

    the ETF guys don't do themselves any favours with the 'short-cut ' info on what can be a very complex financial instrument ( some LICs are equally guilty , sadly)
     
    twisted strategies, 6th Oct, 2016
    #18
  19. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,414
    Location:
    Sydney
    This is where I think some of the index funds (as opposed to ETFs) are actually a better choice because they actually have structures in place to encourage regular monthly investments for DCA.

    As a form of automated savings with regular investments (even better if it comes out of your salary before it hits your bank account - because then you learn to live without it), with dividends reinvested - it's a great way for people to get started with investing.

    For a new investor, setting up a trading account and learning how to buy shares for an ETF or LIC is much more difficult than filling out a managed fund form once and having some money automatically taken out each month.

    Of course, once you've got your trading account set up, it can be easier doing it that way - but it can be daunting for new investors to get started.

    That's why I think low cost index funds are actually a good choice for the very new investors - more so than ETFs and certainly more than LICs.
     
    Simon Hampel, 6th Oct, 2016
    #19
    4 people like this.
  20. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    index funds never appealed to me for several reasons , but a young reliably employed investor might find them good , i seem to be doing well out of owning shares in the companies providing such funds .

    needing to rush and force my outcome result , probably made such a choice unwise for me anyway
     
    twisted strategies, 6th Oct, 2016
    #20
Page 1 of 2
Financial Advice – Do you need help

Do you need help with investment strategies, don’t want to buy the wrong stocks, or you just need a regular income stream? We provide the research to ensure your investment selections achieve the goals. This is the value of advice.