LIC & LIT Listed Investment Companies (LICs) 2019

Thank you Zenith Chaos. I like how you explained that.

Yes, I have definitely learnt not to speculate on prices movements. In a way, I even consider holding gold to be speculating on it going up. I've actually book marked the discussion between SMA and Thornhill where he talks about deriving an income. I personally got a lot out of that interview.

My friends often tempt me into Crypto "DUDE, did you hear about **** Coin?" ... I literally have no interest anymore!

Thanks for the comment!

Cheers

 

As a ten year old I walked to and from school - about 1km each way. There was a corner store on the, well corner, at the end of the street and about once a week I would stop in with my 20c piece ready to select my 1c and 2c lollies from under the counter to be placed into a white paper bag. Of course with so many choices, at first I wanted to try everything and would carefully select out 15 or so individual lollies (I'm sure this infuriated the shop assistant/owner, although come to think of it there was never anyone else in the shop so they were probably just happy to have a customer). Overtime I figured out which ones I preferred and then would load up on just a tight selection of choices. Feels like this is the journey many LIC investors take.

..... And then there's ETF crew that stomp on into the shop and go straight for the 2kg black and gold brand suger, thump it on the counter and hand over 80c...... They might be efficient, optimal, and right, but no imagination and ohhhhh so crewd (checks which thread this is and then ducks for cover)

 

Been helping a relative with some research for their first property purchase tonight and stumbled across something that really started appealing to the property investor in me. Thankfully @Snowball's latest blog post hit my inbox at the same time to resue me from my own stupidity.

An Open Letter to Property Investors and Sharemarket Newbies - Strong Money Australia

 

The truth hurts sometimes. I'm facing exactly this dilemma. Will be keen to read his next post re the transition.

 

Further to this I had a glance at the 2018 annual reports of a couple of LICs. From the position of cross holdings in other LICs, the cleanest, for want of a better word, seem to be DUI and WHF.

 

The Good Ship ETF crewed by a crude crew? Or this mob?

 

Haha, doh.

 

Last time I checked I thought AUI was pretty clean san cross investment in DUI, might have changed.

Interesting re WHF, the relatively high MER puts me off somewhat tbh, still hold it though.

It does get to a point when you find yourself spending so much time figuring out which LICs NOT to invest in that you might as well save yourself the trouble and go straight to index funds. Personally I'm not there yet but the ETF / index force is strong!

 

@ChrisP73

Read Gluskies investment style gibberish and you’ll bin WHF quick smart. Another one down!

 

I'm also feeling the lure of ETFs after being almost exclusively in LICs so far. Lots of great analysis on this forum and a desire for simplification has got me thinking about my future investing approach. Not sure why its taken me so long to properly consider ETFs as an alternative, maybe because I've been very happy with LICs to date, I've just never found a compelling reason to change strategies so far.

I love buying the big traditional LICs when they're at a discount to NTA but when they move to premium I've tended to look for better value in other LICs. This takes a fair amount of effort though, looking at each of their holdings, performance, historical premiums/discounts, management fees etc to try to find value. I'm thinking a far simpler set-and-forget strategy is to continue buying the big LICs when they're at a discount, but then switch to buying ETFs like VAS when the big LICs move to premium. Take advantage of the LIC discounts when they're there but not get slugged with paying a premium when they're not. Basically buy the index with NTA as a maximum price but with the ability to buy it at a discount at certain times in the cycle as well. Best of both worlds right there?

 

The funny thing is @SatayKing was likely one of the earliest investors in index ETFs in Australia having invested in STW when it first listed in 2001 from memory. I followed suit not long after. God forbid I even invested in SLF (Areit Index) despite SK’s negative wise view on listed property at the time. I even recall the occasional Bogle quote from @SatayKing. But such was the attraction of consistent income and regular SPPs as a reminder to keep adding more LICs generally seemed a more attractive option than STW.

Of course over time since then more and more evidence has come to light in support of indexing, fees have reduced etc.

But it does go to show at least early on SK and I were investing radicals back then.

 

LOL. Not only do LICs have overlap on themes but appears to be rife with forums.

BKI Announces payment of another Special Dividend

When you find that reason it'll happen I think. While I've held one EFT for a long time, it's only in recent times I have added another.

It is always possible my approach will change. If it does, it does but only when I am ready to adopt it. Will take effort probably but as I am conservative about such a change I will bounce concepts of the FP I occasionally see. Doing such things solo now I tend to find a daunting prospect so I find having an impartial view (and this FP isn't wedded or aligned with any particular product) useful for me.

 

One shouldn’t rush these things.

 

I have personally used this resource NTA Tracker which was created by another blogger to determine discounts.

Disclaimer: Not sure of its 100% accuracy, so beware.

 

I may require a more sedate mode of transport than that number after my first walk in quite a while. Boy, am I feeling it and not only in my bones.

 

Yeah. Only did it to see if there were maybe clean skins around.

 

It was always a decision between the cheap Rainbow Balls, or the more decadent Cobbers. And I could never pass up a Strawberry and Cream or a Jersey Caramel.......

 

@geoffw for the vgs index try this https://www.msci.com/documents/10199/c27eeea3-ad05-4944-bef4-fbaef9ef34ec

25 year performance is 7.75% (before fees)