My portfolio. Does this look ok?

It would less risk than picking individual stocks but your yield return would be limited to the average of the index.

 

Here's a few off the top of my head

More complex.
More to think about.
More cost.
You have significant exposure to those companies anyway so you aren't really diversifying anyway. Not varying returns to the LICs.
If you're trading more tax events

 

BKI formed in 2003 doesn't seem to fit the PT approach of using LICs that have been around for 50+years

Is this inclusion for a bit of 'young blood' in with the grandfathers?

 

BKI is just a new face to the portfolio

 

Give it a crack, it's not as easy as it sounds. You'll either make some money or you won't, either way you'll learn some lessons about both the market and yourself

 

The original portfolio which became BKI was run for a long time by BKW (another Millner related company). It was then spun out of BKW as a new LIC BKI. So it is quite old in totality. BKI then took over another older LIC originally created by Ian Huntley. I think Huntley still sits on the board?

Despite it not being as old as Thornhills other LIC holdings it meets the more important criterea he looks for in a LIC.

A recent report on BKI:
http://bkilimited.com.au/investment/wp-content/uploads/2017/08/IIR-Report-BKI-2017.pdf

 

The history of some of this LIC's is interesting

BKI History

BKI was formed on the 17th October 2003 to take over and manage the investment portfolio of Brickworks Limited (BKW). BKW established the core portfolio during the 1980’s with the objective to generate an increasing income stream through long term investment in a portfolio of securities that would grow over time.

Also look at Brickworks (BKW) History

 

Thanks guys - always the fountain of knowledge

 

In regards to Peter Thornhill's having older LIC's in his portfolio, is there anything negative about this? When you think 'old' you tend to think that maybe there is a newer better option.

Older LIC"s v newer LIC's should this even be taken into consideration of what I buy into?




-Frank

 

Old ones are proven. They have been accumulating for so long and got so big that it's unlikely they are going to have returns significantly different from the index, any new holdings are going to be relatively small as a proportion of the portfolio. Buying below NTA and during dips still offers long term benefit. The performance of some has been surprisingly different from the index IMO.

New LICs can be nimble (or chase a popular fad), especially with the first allocation of capital. So performance can be significantly different from an index. As they are smaller fees will be higher proportionnally and they are more likely to be active to have a point of difference further increasing costs.

Survivorship is another consideration, if the LIC closes there will be costs and possible capital gains events. Any stumble in the first few years could be judged more harshly.

Lots more pitfalls with newer LICs and more research and understanding should be undertaken. Generally Too much work for someone like myself.

 

@Frank Manno Thanks for asking the question to begin this thread, Ive got a lot from it.

 

No worries PJ.. I got a real lot from it too.. I even review it occasionally.. So many investing great minds here thank you everyone for all your help..


-Frank

 

Has your thoughts on your portfolio changed any at all?

 

Since my original portfolio? Yes absolutely.

I've learnt a lot since having that original portfolio created by an advisor. I can better identify and question other advisor's advice now plus I have a much better understanding of what I need. i.e., passive income stream from industrial dividends.

There was noting actually -wrong- with my original portfolio other than that it needed to be managed by an advisor due to the added level of complexity. Totally un necessary and expensive to maintain.

The advisor called me last week and asked if I want to invests some more money and I asked him what he suggests.. He said Telstra and BHP.. Telstra for the high dividends and that they are very cheap now and BHP has good growth.. He seems to be thinking differently to me so I said no thanks.

At least I have some idea of what I'm doing now rather than no clue whatsoever, like I was 2 months ago.

I'm getting comfortable with LIC's now and am itching to put some money in, I just want to make sure the portfolio is diversified and balanced.. .. Maybe in a week or so I'll start investing.

How do I time when and how much to invest anyway? I don't want to be buying at the wrong time and paying too much when I could be buying cheaper and getting more shares in.. Do I just sit there watching share prices and make a decision to buy or what?


-Frank

 

Coming back to the psychology side of share investing, this post in the LIC thread resonated with me. KISS.

 

Frank, hope all is well!

If I was in your position I would book a week off work (if you are employed) sit at home and read the LIC thread, ETF thread, vanguard way to retire thread, Dividend Aristocrats and how to find them thread in addition to others with a notepad and start with a blank slate and read and take notes and I swear at the end of the week you will have more knowledge and you will be in a much much more comfortable position and you will be able to assess and question peoples opinions and views because in my opinion asking how much to invest and how to make it a portfolio balanced and should I watch share prices will cause some serious grief in my opinion down the track as you will burn out and it will constantly consume you and you will try and jump from one theme to another based on all the financial porn available now with all the mediums in society.

Investing is simple if you know what you are after I suggest figuring out your why (I cant do that for you) and then implement a plan of attack to target your selected markets but don't be too cute in trying to get 20 different funds in order to capture US mid caps, US small caps , developing countries this or that.

Please read all the threads mentioned above (sorry I haven't done the hyperlinks I'm at work and typing away at a brisk pace and use the search function on this forum it is your best friend and don't get bogged down and try and keep it as simple as possible and you will feel much more comfortable in developing a winning portfolio for the long long term.

Get reading!!!!

 

Hi Pippen,

I found all those except for the ETF thread.. Which ETF thread do you mean?

Thanks , I already read some of the LIC thread.. Will read the others for sure.


-Frank

 

Good work! I think it's just listed as etf to be honest similar to the lic thread! I like your commitment!

 

@Frank Manno I think there is even a lics v etfs thread too

 

Somersoft I take it.