My portfolio. Does this look ok?

Discussion in 'Share Investing Strategies, Theories & Education' started by Frank Manno, 22nd Aug, 2017.

Join Australia's most dynamic and respected property investment community
  1. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,379
    Location:
    Buderim
    God knows who am I to get frustrated with the likes of Frank. When I think of all the stupid things I’ve done with trading / investing over the years Frank looks good in comparison:oops:. But the difference is I made the worst mistakes when much younger. I had plenty of time and human capital to recover and learn from these mistakes. It concerns me however when I see someone closer to retirement trying the find their way with all this. Messing up at this later stage can at times have devastating consequences:(.
     
    orangestreet, Sticky, Anne11 and 2 others like this.
  2. mtat

    mtat Well-Known Member

    Joined:
    7th Sep, 2019
    Posts:
    328
    Location:
    Sydney
    Yeah. If he invested the money he had 2 years ago he pretty much would have reached his goal already. But this isn't a case of "you can only say that now in hindsight" - because what he needs to do now is exactly the same as what he should have done two years ago! Dunno's post would not differ if it was posted two years ago.

    So glad I'm starting in my 20s and get to learn from others.
     
    number 5, mdk, Burgs and 6 others like this.
  3. geoffw

    geoffw Moderator Staff Member

    Joined:
    15th Jun, 2015
    Posts:
    11,654
    Location:
    Newcastle
    I was like Frank - it took me a long time to get into the market.

    I needed to go to a financial advisor first. He set up a strategy with specific advice on what funds to invest in. I was ok with that, before I realised that ongoing costs would take a hefty proportion on my annual earnings. So I took his strategy (after paying for it in full), ditched the platform and his ongoing management, and invested in a number of different ETFs across sectors mirroring the allocation he had suggested. So I have Aussie shares, overseas shares, bonds and real estate in ETFs, which suited my wariness for having everything just in equities - at a much smaller cost than his suggestions. It still took a little while to work through this though, with help from suggestions from this forum.
     
    willair, Burgs and mdk like this.
  4. Kelly88

    Kelly88 Well-Known Member

    Joined:
    27th Jul, 2015
    Posts:
    75
    Location:
    Sydney
    It's sort of my position now too and one of my friends (~45 years old). I just started to buy from mid this year (very slowly). Albeit all of these Frank is still in a very good position with 1.3M and equity in the house.

    @geoffw:
    what are the ETF that you decided to go with at the end (and their percentage)?
     
  5. geoffw

    geoffw Moderator Staff Member

    Joined:
    15th Jun, 2015
    Posts:
    11,654
    Location:
    Newcastle
    I'm not a good model, I have a selection which suits me. Most people here would say that I have too many, but in my defence, I'm trying to spread my risk and not be too dependant on one sector.
    Most heavily VAS & VSO for Aussie shares
    IVV and NDQ for US. I had international but they were very heavily weighted with US shares
    VAP for property
    VGB for bonds
    Some QAU and physical gold for defence
     
  6. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    ...well

    I know you all agree that I shouldn't be trying to time the market but I'm not going to cope well if I invest all the money now while the market is at an all time high.

    So..

    I think I'm going to dollar cost average in equities through 2020. I have $170k invested already in a conservative fund, I will leave that alone.

    I'm going to now dollar cost average 20k per month ongoing in a balanced portfolio of growth and dividend Australian and overseas funds no mater what through 2020. Also, if I happen to see dips through 2020 I'll invest more on top.

    This way I feel I'm kind of meeting the situation half way..

    I know that by not going in all the way now that I'll miss out on dividends through 2020, but what do you think of this plan as a compromise?




    -Frank
     
    Last edited: 17th Dec, 2019
    Big A likes this.
  7. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    10,729
    Location:
    Extended Sabatical
    Frank, if that's your plan AND you stick to it, well done you.

    Noticed you've not mentioned super. What you do or don't do about that is up to you but at least give some thought to placing funds. Super isn't anything magic. Money in goes in the share market same as outside it. Simply taxed at a smaller level. What tax rate do you want to pay? 30% or more versus 15% because that's what is happening.
     
    number 5, sharon, Anne11 and 2 others like this.
  8. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    The reason I have been indecisive about super all this time is because I'm not too sure where I stand with employment.

    I am self employed and the industry I am in isn't what it used to be, I am busy with work at the moment but I'm not very optimistic about the near future.

    So in regards to super I think I am worried that once I lock money away I won't have the liquidity which I may need.

    But yes I will look into locking some investment in super as well so long as I have available cash in case things go bad with work between now and when I can draw on the super.


    -Frank
     
  9. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,379
    Location:
    Buderim
    Ignoring asset selection the DCA approach over time seems like it’s a good fit for your conservative nature. I also have a lump sum around the value of your initial inheritance to invest. I’m doing similar with DCA over an extended timeframe plus additional purchases if dips occur. I’m well read on lump sum vs DCA but despite the arguments in favour of investing the total lump sum at once given my conservative nature nowadays I need to invest accordingly.

    I cop flack about it at times but I’m very much of the belief that one should invest according to their risk tolerance and behavioural weaknesses. It doesn’t mean one shouldn’t try to improve on these attributes over time but trying to follow some so called perfect strategy / asset allocation etc if it causes stress and worry is likely to fail. The best approach is the one you’re comfortable with and able to stick with through good times and bad regardless of whether it’s optimal or not.
     
  10. Big A

    Big A Well-Known Member

    Joined:
    18th Nov, 2018
    Posts:
    2,390
    Location:
    ?
    Hey @Frank Manno . I think that's a good idea and have done a similar thing myself. Which strategy will deliver the best result in this current market is anyone's guess. More importantly is that you are comfortable with this plan and your on the investment journey rather than sitting on the sideline.
     
    Frank Manno likes this.
  11. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,379
    Location:
    Buderim
    Frank from memory you’re around 54 so only 6 years away from gaining access to a tax free Super pension and or lump sum at 60. So should you lose your job and assuming you don’t have a mortgage at worst you need to cover 6 years living expenses. Say that’s $70k pa then for 6 years simply keep $420K in cash or a bit more to allow for inflation. Get as much of the remainder of the inheritance into Super as soon as you can.

    Their’s no excuse as you have cash set aside for the worst case scenario, most of the rest will be in professionally managed say a low fee moderate risk Balanced Industry Super fund which can become a tax free pension at 60. If the cash set aside hasn’t been needed then invest that or whatever’s left at 60.

    Not advice.
     
    Anne11 and Big A like this.
  12. Big A

    Big A Well-Known Member

    Joined:
    18th Nov, 2018
    Posts:
    2,390
    Location:
    ?
    Great point. This is what your advisor should be telling you. Actually he or she should be screaming this at you. There is no doubt that it would be a much better strategy for some one your age. I am already working on building up super and I am still 20 years away from accessing it.
     
    Anne11 and Nodrog like this.
  13. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    Well hey you've done the math for me too easy thanks.

    How much money should I be able to get into Super do you think?

    While I'm at it I just want to thank you and to everyone else in this group for your continued help, I would be lost without you people :)


    -Frank
     
  14. FredBear

    FredBear Well-Known Member

    Joined:
    7th Aug, 2018
    Posts:
    467
    Location:
    Sydney & Abroad
    The effective tax rate could be very much less in super due to franking credits.

    Example: Let's say you have an AustralianSuper Member Direct fund. The only investment in the fund is in VAS. Latest dividend on 16/10/19 was 107.096c with 87.19% franking, so 93.377c franked and 13.719c unfranked with a franking credit of 42.02c.

    So the franking credit is more than enough to cover the 15% tax. What I don't quite understand is what happens to the excess - does the member fund get the refund which can then be used to buy more VAS?
     
  15. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    6,776
    Location:
    ....UKI nth nsw ....
    Frank you may find this interesting and the simple way Warren Buffet lay this out..
    [​IMG]
     
  16. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,379
    Location:
    Buderim
    From memory you’ve both got the same advisor. He’s a highly experienced knowledgable one who I’m sure would be strongly suggesting Frank get Super sorted. I’d be very disappointed if this wasn’t the case given Frank is 54 hence not far off preservation age. However an advisor can only advise, they can’t force a client to do something.
     
  17. Big A

    Big A Well-Known Member

    Joined:
    18th Nov, 2018
    Posts:
    2,390
    Location:
    ?
    I believe you do get the difference back as a refund. That's as long as a labour government doesn't get into power and take away our franking credit refunds.

    Sorry I did not realise that. Speaking of Alex I shall be giving him a call right now to discuss where to from here. The market drops we keep expecting have continued to elude us and am keen to get his thoughts on what he sees ahead.
     
  18. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,379
    Location:
    Buderim
    As I explained in an earlier post.

    $100k non-concessional contribution plus $25k concessional contribution this F/Y. $300k NCC using 3 year bring forward rule and $25k CC next F/Y. That’s $450k invested in Super over the next 6 - 7 months. Your advisor should be well aware of this strategy.

    Get that done first more can be invested over time into Super as the rules allow.

    I personally think it’s crazy not to be putting money into Super given the circumstances.

    Not advice.
     
    Anne11 likes this.
  19. FredBear

    FredBear Well-Known Member

    Joined:
    7th Aug, 2018
    Posts:
    467
    Location:
    Sydney & Abroad
    You can now make catch-up concessional contributions if you balance is under $500k. So if you didn't fully use the $25k last year you can us it this year - so a possible $50k cc this year.
     
    Anne11 likes this.
  20. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,379
    Location:
    Buderim
    I personally don’t think Frank should choose the members direct path. Given his nature it’s perhaps best invested in one of their core diversified products such as Balanced fund where it is totally hands off, set and forget for Frank. The less he’s involved the better.
     
    sharon likes this.