LIC's vs ETF's Historical Performance

All comes back to Peter Thornhill's price and value argument!

I myself prefer to allocate savings in such a way as to invest quarterly whilst having a cash reserve and dip into the lic which is providing most value,yield at the present time between argo milton bki and qve and if these fail to provide enough value or excitement to me I won't be wasting my precious time and days logging onto commsec and calculating present ntas and waiting for pdf announcements I will just top up my old favourite whf instead of VAS given the 100% franking and industrial tilt with minimal resource and crappy stock exposure!

Everyone is different tho!

 

This "price" only chart might be a little clearer:


That said I think comparing price in the case of LICs is not that useful for those of us investing for dividends. Portfolio (NTA) total return is the most useful measure.

 

Hey MTR, I don't think I'll ever use debt for shares. Just but lump sum now and contribute as much as I can every quarter. Also buy more in the dips if I can. Should compound quite nicely over time.

If the market drops 20%, no problem. Dividends are less volatile, don't drop as much and the final goal is the number of shares anyway.

 

I like the sound of that! When u figure out when the market tanks let me know ASAP!

 

How do you know if they are providing enough value and excitement if you are not calculating present nta?

 

I will pm you......cos i am waiting too

 

I just do a quick div yield calculation takes about 1 minute! What I meant was I don't sit on commsec all day looking at buy and sell orders waiting for world news and events etc! I set up a little system showing when the chosen lic's have historically presented share purchase plans and also when they announce their dividends along with 52 wk high and lows so it took a little while setting it up but now I get on with life and live within my means as if you can save, you can't invest then if you can't invest you can't achieve financial independence! If I buy argo at 7.60 instead of 7.55 for a 1000 share parcel is not going to break the camels back in 25 years! Well I hope not anyway!

 

What if you were buying 100,000 shares, any difference or same method?

 

I guess that opens up a new argument of dca v lump sum investment! I probably wouldn't be having the greatest nyts sleep if I bought 100 000 shares in one parcel and then the market tanks and I have no other funds to put in or have to rely on debt which I'm not a fan of! I would opt to invest lumps at a time for the fact that I don't know what the market is doing but I definatley don't want the market to ruin my waking and sleeping hours that's for sure! If you have the testicular fortitude to go all in with 100 000 share purchase and then have no worries with the market tanking then go for it! I opt for capital preservation myself!

 

#AORD @ 5000 coming soon!

 

I question this. Roughly, the last peak was around 6,760 in Oct 2007. We are sitting at 5,874 today. Is that "pretty close"? I would not have thought so. There's basically 1,000 points to go before we hit the previous high. It doesn't seem to me that it is due for a correction just yet. If Sydney and Melbourne property markets eventually slow down, perhaps some of those investment dollars will find their way into the stockmarket. If so, there may be a rally and a correction but surely this will take a few years?

 

The market has continued to rise since inception. It is generally going to be approaching past highs. Today we are near the mark of ten years ago during the GFC. Look at the sharemarket history and analyse what happens when the sharemarket hits an all time high. Obviously it goes higher. How do I know. If it didn't then it couldn't possibly keep increasing. My point, you don't know what will happen to the market and saying it is at a high therefore it will go down is wrong. Agreed that it could go down, but it could go up. It's always the same.

You can always get half VAS and half LICs for your Australian allocation. I choose based on the LIC NTA, but I tend to keep buying at fixed intervals.

I agree, minimise fees. Buffet is right on this.

 

100,000 ARG shares will buy you an ongoing income stream starting at around $30,500 per year net and around 43,650 grossed up, most likely growing faster than inflation. That's all you need to worry about.

 

For sure just have to come up with $ 760,000 bucks to get that income stream!

 

Lots of people said the same thing about Sydney property market 5 years ago and many other markets that have performed well in the past.

This is the longest period that the ASX hasn't hit a new all time high.

No one knows the future, to say there is limited upside is simply not true. I received a warning that VAS would drop before $60 just over 12 months ago and to wait.

You may end up been right and the future will show it was a poor time to buy. Someone always calls the crashes and booms correctly, imo in most cases this is a function of luck. We all like to sing our own praises when we can.

My recentish sale of BHP, RIO and FMG and reallocation of capital were luck, not analysis of the markets, macro factors and companies. Easy to convince one's self otherwise.

 

Not bad at all. This conveniently covers my living expenses.

 

Kudos to you Hodor. I can see from many of your posts, that you clearly respect how difficult it is to invest well or even outperform, and I believe this will actually give you the greatest chance of doing so long term.

 

That was a back of a coaster calculation. You should confirm the calculation yourself and the true grossed up income stream based on your tax circumstances.

But it's quite impressive with franked dividends.

 

Yep the calculation checked out for me.

A fully franked dividend stream is mighty powerful when you don't have any other income (i.e. retired)

What also continues to surprise me is that the capital requirements are fairly modest meaning early retirement is very much achievable for anyone willing to set aside some money. Compare to property investors that typically require $2m+ in net investible assets for a retirement income stream.

Combine that with low living expenses, not inflating lifestyle, practicing gratitude, and "to have more than you expect" (Thornhill, retireondividends interview) you have a recipe for an extremely early retirement.

 

I agree. @Hodor shows a lot of investor maturity which many of us lack at times. I enjoy his posts a great deal. Only negative is I think at times he gives himself less credit than he deserves.