LIC & LIT Listed Investment Companies (LICs) Q1 2018

Yes you are, welcome to the clan...we're all a few sandwiches short of a picnic

 

Yea I plan on building up at least $7k (in a HISA) before I purchase each parcel just to keep brokerage as a % as low as possible without leaving too much time out of the market. That number I just pulled out of thin air, if I can keep it to less than 0.5% that’s good enough for now (for me at least anyways) The initial purchase was just to get my foot in the door.

 

1000 shares in a high quality fund beats a 1000 roses for sure. I wish I could explain to my husband why I don’t want him to keep buying me “things”.

 

Well you could be worse when it comes to being a weirdo, for example me. I purchased my first LIC over 30 years ago (AUI) and I’m still just as excited about LICs nowadays. And what’s there not to get excited about especially with the older style LICs. Others doing the work for a rediculously low fee, reliable growing dividend stream, been going for decades ... . Nothing to do but sit back and enjoy watching the dividends hit the bank account twice a year.

 

Oh I don't know. A bunch of roses, wine and dinner worked on my lady. And I didn't object either. Read into that what you will.

 

Cracking good deal there @Nodrog.

If it's as good as it claims to be, and as heavy as you infer, then no need to move or carry it should a fire sweep through the Ponderosa. Simply leave it there while you and yours skedaddle. Plus it'll sink to the bottom of the pond safe and sound. Dredge it up later.

 

My initial concern with the case is if someone breaks into the house and spots it they’ll assume it must have valuables in it. So given it’s only documents I’m going to leave one of the keys in it with a note on top saying “No valuables, check inside if you don’t believe me”. Hopefully they’ll leave it alone and look for something else to steal.

Anyhow there are copies of this stuff with other parties and a scanned copy of the documents on Cloud Storage. So hopefully we’ve covered most bases.

Really happy with Google Cloud and it’s free with our small storage required. I’ve changed directory structures many times and modified heaps of stuff with GD and the PC storage working wonderfully well together. Also have a backup facility that copies the data to an external hard drive as discussed in the relevant thread. Also free. Sure beats paper storage.

 

Me too..although I would have been slightly more happier had I bought Google shares in 2004. From $50 to $1070 in 14 years at compounded annual growth of 26.5%



Cheers,
Oracle.

 

Would certainly have been nice. But surprisingly I’ve never really thought much about what could have been if I’d bought this or that. I’m just glad that we had enough sense to save and invest. The likes of us here on PC really are a tiny minority of the population. The vast majority will get to the end of their working life with not much more than mandatory Super contributions wondering where the hell all their money went.

 

It always makes me smile when I read posts like this. I am not having a go at you per se (as I believe you have done the right thing) but thanks for tickling my warped sense of humour.

I am the process of slowly tidying up our SMSF share portfolio by getting rid of the weeds (non-performers, low holdings, etc) with the aim of reducing the number of different shares we hold (less admin) plus focus more now on stable dividends (as we in retirement; have been for 7+ years).

There is more work to be done but we had accumulated a reasonable amount in cash. So last month, we bought a tranche of AFI, ARG, AUI and MLT

Some might say “You should have waited until after the “Crash of February 2018” . Hindsight is a wonderful thing.

But does it really matter for a long-term B&H investor like me.

Earlier today, I compared today’s price against our buy price to calculate the current fall for each LIC. Two of the LICs (AFI and MLT) have recently declared a dividend; so I reduced their falls by these amounts.

Current situation is:

AFI, down 15c
ARG, down 11c
AUI, down 1c
MLT, down 5c​

Over the last 18 years (since 2000), the share price of these four LICs has increased by around 160%. So, all things being equal, one could probably expect a similar increase for the next 18 years.

So, the share price at that time could be:

AFI $9.80
ARG $13.25
AUI $14.00
MLT $7.40​

These numbers make the 1c to 15c falls listed above pale into insignificance PLUS the dividends will have gone a long way to funding our mandatory 4% / 5% / 6% minimum pension payments (especially when one adds back in the imputation credits) over those 18 years.

This is probably not the correct technical way to look at this BUT it is how I see it.

 

This makes for a good read.

Note: I'm probably not considered to be diversified as I'm 100% shares. Suits me.

 

We only have four direct shares left now which will also be sold over time with proceeds going into LICs. I’m just not interested in managing direct shares anymore. Simple, minimal admin and set and forget is my motto nowadays.

I’m sure you look at it like me. Price can do whatever but it’s the income stream we’re really interested in. And the company structure of a LIC allows for smoother income which is nice in retirement.

As for comparison against the Index etc well I really don’t care. I invest for relatively reliable income and hence look for listed funds that match my investing objective.

Total return investors will say well you can sell part of the portfolio to create income. But that requires a selling decision and focuses one’s mind on volatile “capital” value. The last thing I want during a Share market crash is having to be focused on “capital volatility” worrying about what to sell to create income. Having my mind firmly focused on the less volatile dividend income (even more so with quality LICs) along with a cash buffer to top up any dividend shortfall if necessary is what let’s me sleep well when markets tank.

 

Sorry, I stuffed up here. Over the last 18 years (since 2000), the increase in share price of these four LICs has been around 160%. So, to arrive at a likely price in 18 years time, I should have multiplied today’s price by 260% (not 160% as I did in my original post).

So, the share price in 18 years time could be:

AFI $15.90 (an increase of $9.80)
ARG $21.50 (an increase of $13.25)
AUI $22.70 (an increase of $14.00)
MLT $12.00 (an increase of $7.40)​

These numbers make the 1c to 15c falls listed above pale into even MORE insignificance .

Sorry about the stuff-up; I under-reported the results.

 

It’s funny because I look at it a similar way too, I wonder if I’m being too simplistic but when I was looking to buy AFI and watching the price go up and down by a few cents, I was like this is not going to matter in 20 years time for us.

I’m keeping my portfolio fairly simple to start with, LICs for Aus equities and mostly ETFs for international (although I’m interested in adding FGG to my portfolio as well) aiming for a 50/50 split between LICs and ETFs.

I have a “shopping” list of what I want my portfolio to consist of but at this point as a core:

Aus Large Caps: AFI, MLT, ARG

Aus Mid-Small Cap: FGX, MIR

International: VGS, VGE, FGG

I’ve kept my rules simple to start with:

- Target 60% international, 40% Aus
- 3:1 ratio Aus Large:Aus Mid-Small
- 4:1:1 ratio VGS:VGE:FGG
- Fees as low as possible, 1% will be my max at this point. I may look at higher fee funds later as I become more experienced in evaluating but at this point I’ll avoid until I’m more confident.
- Buy in 7k parcels and as I’m just starting out, will buy my biggest holdings first before adding the smaller ones and adjust/review at the end of the year.
- I’m not going to fret too much about NTA but it will be used to assist which company I buy into next.

I don’t intend to ever sell. Probably easy for me to say that now that I have no skin in the game yet but I think I’m more afraid of the paper work and the tax implications than whatever the share market will do in the future good or bad (famous last words probably).

 

Fantastic to see someone who’s done their research so well upfront. And wonderful to see more women on here interested in Shares. Research suggests women in general tend to be better savers and sharemarket investors than us menfolk for a whole host of reasons.

 

I’ve learnt heaps from you guys here (been lurking for awhile now) and definitely still have a lot more to learn, so thanks! I know a lot of the posts here are “not advice” but it gave me a strong starting point to have a look into these companies to begin with (didn’t know what LICs and ETFs were until two years ago).

 

ACQ, half year report and accounts.

CommSec - Online Share Trading & Investing. Start trading today with Australia's leading online broker.

15 February 2018
ACQ Announces Record Interim Profit and Increased Fully Franked Interim Dividend
Acorn Capital Investment Fund Limited (ACQ) reported a net profit after tax of $9.166 million for the half year to 31 December 2017. The result is a record interim net profit for ACQ and has been generated by strong underlying portfolio performance. For the 6 months to 31 December 2017, the Pre- and Post-Tax NTA (including dividends paid) has increased 24.8% and 17.3% respectively.
ACQ is also pleased to announce that it has declared an interim fully franked dividend of 2.7 cents per share an increase of over 80% when compared to the 2017 final dividend(1). In declaring today’s dividend the ACQ Board reaffirmed its previously communicated intentions in relation to future dividend payments:
“Acorn Capital Investment Fund Limited intends to pay annual dividends targeting at least 5% of closing post-tax NTA for each financial year, franked to the highest extent possible without the Company incurring a liability. This is subject to the Company having sufficient profit and cash flow to make such payments.”


http://imagesignal.commsec.com.au/d...nZXNpZ25hbC9lcnJvcnBhZ2VzL3BkZmRlbGF5ZWQuanNw

 

Neat. Means I get a portion through the SOL holdings.

 

Hmm, I see.

I'm out of here.

 

PMC should be announcing dividend any day now?