ASX Shares Major Miners

Discussion in 'Shares & Funds' started by Hodor, 12th Nov, 2016.

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  1. Hodor

    Hodor Well-Known Member

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    Interested to hear what opinions of the major miners (BHP, RIO, FMG) are at the moment.

    Currently I hold all three (up on RIO and FMG, down on BHP a lot) and have been trying to decide when might be the best time to sell them off and buy up LICs instead.

    Long term I am planning to follow the industrial indexing/living on div's approach so these are legacy holdings from before I had a plan.
     
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  2. pippen

    pippen Well-Known Member

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    Work for south32 and previously bhp billiton and personally hold stocks in both through employee share schemes however sold off majority of bhp and bought into lic's and paid off ppor with that!

    Good approach and similar to one im taking and will continue employee share scheme with s32 and either hold or sell off half again and jus buy bki, mlt, arg, qve and or vgs!

    Life's too short to be speculating on mining stocks IMHO!

    Prefer to work, save, invest and enjoy it, and lic/etf approach ticks this off perfectly!
     
  3. Realist35

    Realist35 Well-Known Member

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    Hey mate, I'm in a similar boat to you. Do you think BHP's matched shares program is worth participating in? Or would you say the money is better invested in LICs due to mining volatility?
     
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  4. pippen

    pippen Well-Known Member

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    Hi mate, just responded to your inbox and just saw this post!

    So check your inbox for the response I provided! ;)
     
  5. Hodor

    Hodor Well-Known Member

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    What are the rules around said plan? 1:1 matched? How long do you need to hold for?

    FYI I have dumped the above, at a time that to date makes me happy, I even almost convinced myself I was a clever market timer before I came back to reality.
     
  6. Realist35

    Realist35 Well-Known Member

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    So basically you buy shares quarterly, 6k worth of shares per year (1.5k per quarter). For the simplicity reason, let's say I bought 200 shares in 2017 at $30 per share. In three years (in 2020) I receive another 200 free shares that I pay income tax on (at the price of the share on the day they were given to me) as they form my taxable income for FY2020. And of course I pay CGT when I decide to sell.

    I played in Excel today and I think it's all worth it even with the volatility of the mining industry. It all works out well because of DCA. I started buying in 2014 at 35$ per share. The industry slumped and the shares next year dropped to 18$ but I bought some more. Altogether it turned out that I was buying shares over the last 3 years at an average price of 22$ per share. Today they are 24$ so even without receiving matched shares I haven't lost any money.

    Then I compared this to a scenario where I was buying LICs for those 6k per year, and I assumed the total return of 9% per year. The first option turns out to be a lot better.
     
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  7. Hodor

    Hodor Well-Known Member

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    Thanks that's very clear. Never thought about the income tax, again it is clear once you mention it.

    It is a fairly large free kick. I would be adding BHP given the free shares. There is value in some desirable companies at a point and no value in very good companies at a point
     
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  8. Realist35

    Realist35 Well-Known Member

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    To me it was just amazing what DCA does. The effects are great. Until I actually set down today and put everything in a spreadsheet, I thought I lost money as I was buying when the shares were 35 or so. However DCA looked after it; I was also buying when they were at 18. The net result - I haven't lost any money even at today's low price of 24, and not taking any matched shares into account.
     
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