LICs - are they all they're cracked up to be?

Thanks @SatayKing I am concerned that growth in companies is not happening in Oz to the same extent when compared to other countries.

 

Thanks @Nodrog yes it is. My retirement income is largely covered by my super pensions and a part-time job. Majority of my investment income is available for reinvestment. I think I saw written somewhere that your partner was younger than you. I am in a similar situation so feel that I need to still continue growing my investments.

 

I like it, invest for you, your risk profile, your goals, yourself.

 

No. Study required. The kind of assumption that
Seems neat but that’s all it is.

 

I honestly question how big a deal a rebalance that creates 10% or less long term capital gain being realized is, particularly where you have multiple beneficiaries.

 

I’m a very green investor, started with about $7.5k... Currently split between 2 holdings; AFIC ($4K) & VGS ($3,500).. I don't plan on touching this for at least 20+ years.. at least! My intention is to buy more shares in $1k amounts (2-3 times a year) + DRP.

I know I'm not talking about huge numbers, and in hindsight perhaps I should have gone 100% one way or the other... but for future buys, should I focus on growing my AFIC allocation? Or will I be better with more VGS exposure?

Not sure what weighting/ratio I should be aiming for/what will be more beneficial in the long run?

Appreciate your time

 

I'd chuck those numbers into a compounding interest calculator to give you an idea what it could potentially grow too.

This is not advice but I have 100% of my shares outside of super in AU. I currently hold BKI, MLT, AFI and QVE. Moving forward, at some point, I intend to buy VAS. All have DRP selected with exception of QVE.

I hold 100% of my super in international.

Cheers

 

Why not continue with the weighting you already have? You’re basically 50/50 already that’s a nice simple place to be.

If you’re comfortable with that, carry on. Not advice

 

thanks for your input

I guess that answers my query, I just wasn’t sure if I should sway it to 60/40 (but I wasn’t sure whether to have more weight in AFI or VGS)

what would be more beneficial (if any)?

 

Others have provided good suggestions so my comment is from a different angle and relates to the DRP arrangements. It isn't specific to you but is general.

With, say, 1,000 AFI shares a DRP arrangement could be considered as the amount of dividends over a financial year would not be huge ($0.24c pa) and depending on a person's overall tax situation, no large, if any, tax on the $240 additional income would be payable at EoFY. So until there is an impact and cannot be covered by other income, DRP could work in building up the holdings. Unlikely to cause someone to toss and turn at night worrying where to find money to pay any tax. I've deliberately ignored any franking.

Not so much with VGS as the income isn't high on 50 or so units. A few distributions carried forward would be necessary to get sufficient funds to obtain 1 unit under VGS's DRP arrangements. In that case, I think it'd be a case of keeping the funds in cash and along with other moneys, when there is a sufficient amount keep on buying say 10 or so units at a time.

 

Thank you In your opinion do you think VGS will return a better result (in say..20yrs time) than AFI will...

Hence my question, should I focus on one more than the other or continue putting money into each and keep roughly 50/50 ratio...? Cheers

 

Sorry mate but I don't know what will happen with the those today or next week let alone in 20 years time.

 

He he yes. Which is why some suggest 50% ASX / 50% Global as “the path of least regret”. Likely what l’d do if young. As a retiree though I prefer greater local allocation.

 

AUI

If the total provision for LSL increased by $2000 in a year, and no-one took any because there's only one employee and he's probably needed at the wheel, and you get a week LSL per year's service, and this is for 6 months, then the salary of said employee, at AUI, is $208,000 - question is, is he/she moonlighting over at DUI as well? Nice work...

Of course, perhaps he could have taken some LSL and still the provision went up... in which case he/she is getting paid a damn fortune. Someone raise this next AGM, will you?

It's such a bare bones report I had to find something to pick at. Love the cheery forecast for the full year...

 

Haha, love the detective work there @RogueBollard

 

And will the costs blow out even further as both DUI and AUI have an additional Company Secretary? Same person for both.

What is even worse is Plant and Equipment went from $3k to $32k pcp! Surely the floor mats could have lasted a few more years?

 

He he that will confuse 'em. It did me.