Opinions on what to do please Lics/individual shares/ ETFs

Hi all finally got some funds to play with Long story but doing a debt recycling strategy and looking for best way to use funds

I have around 19k

I am much more familiar with LICs and individual companies shares

So what should plan of attack be?
I would think high yield so I then can put the money back into my mortgage but what is the best way to do this ?

I have looked at cuffelinks and know which ones are high yield and whether at discount or not is this the best way to go about it?
Or do I just invest a small amount in just LICs or go individual stocks with higher dividend yield?

I don't want anything under 4% yield

I also may keep a little to buy some prospect ones that will grow

Also is this the best time to invest? As if market crashes i will have no more funds to buy with which is what I would want to do

Sorry so many questions but would love to know your opinions

Cheers

 

Hate to say this,
But research
Research
Research

Then make a plan and run with it.
No one knows the future - we are just running with the uncertainty.

 

Read about the "yield trap" as it is something that might come up with the type of strategy you are likely to pursue.

Focusing on low fees also helps avoid a lot of potential downside, especially long term.

There are so many strategies each with pros and cons so don't expect any specific answers.

 

Hey @Hodor and @BKRinvesting i am hearing you I have I am at the stage of analysis paralysis seems like everything I'm interested in is at a premium too

Thanks for replying

 

Decide your end goal.
Figure out how you're getting there.
Then act.
PS. DCA is a pretty nice cure to analysis paralysis

 

Keep your money in your offset and wait for a really bad news to hit (eg: Brexit or Trump). When that happens, don't be scared but look for an opportunity.

 

Know where you want to jump, be it criteria for selecting a possible LIC/share/fund, or the specific LICs/shares/funds. Sorry, I think I've just continued your analysis paralysis, it comes back to @BKRinvesting 's posts above.

Would the Beginner's guide to LICs thread and guide (in thread) assist with the analysis paralysis, even for some other thoughts/approaches? There's lots of info on the many threads; I've printed pages and highlighted posts that resonate with me (old school, others have much more brain power and can digest the info, but I like notes and scribbling).

 

Try and focus on fully-franked dividends and look for consistency of dividends over time. Marketindex updated their dividend yield scan service to show gross dividends. If you view on a desktop/laptop browser you will also see forecast dividend growth.

e.g. Dividend Yield Scan (1 August - 43 Results)

Do be wary of one-off dividends that may make the yield look attractive so make sure you research why.

That said. NAB is comparatively cheap at the moment and has a great gross yield ( but perhaps mix it up with an LIC or ETF for diversification ).

National Australia Bank Limited

A few things I like to look at. DYOR/not advice.

• Good yield and gross yield

• Consistently growing dividends

• It's helpful to look at trading range in the last year and look for price being well below the 52-week high

• Comparison to the index and itself over time. Look to buy when the price looks "cheap" compared to history or it is in an obvious dip.

 

See attached

 

I think price / earnings ratio is an important metric, especially for single shares.

In addition, check the dividends vs earnings. The dividends are less likely to be sustainable if they are higher than earnings.

Consider 52 week low and moving averages.

 

Just read through some of 'our' replies (which are all helpful) but it's....pretty technical stuff! It is easy to forget that Nlang doesn't have any experience in the stock exchange. A comment like this makes me think that stocks might not be for you!

Another option is to regularly invest in the Retail Vanguard index funds. A simple set and forget option. Also there are some fairly major changes coming to the Vanguard retail funds next year which will enhance their overall investment merit!

 

Thanks all for your replies

@devank totally agree I am going to keep some aside for when someone does something stupid in regards to trump I'm sure will be soon enough!!

@Mac Fields you are not alone I don't seem to absorb anything from a screen only when I print it out
Thanks @austing yes I have read this before it's great thanks for all the hard work. I am just trying to apply it and to me seems like the ones I like at are a larger premium ( more than usual)

Thanks @wombat777 and @ErYan that is really useful Ethan that is definitely things I look at! Wombat practical advice that is simple I will try looking at that I think I was trying to get to technical and need to scale it down and keep it simple like gockie always says well and a lot of others!

Thanks @unwillingwillis i haven't really looked into retail vanguard funds I have only really looked at VHY and I prefer LICs and I really haven't looked into these.
Who knows if stocks are for me i am just trying to get ahead in life I only have 19k to invest but to me it feels like 100k. I don't have a lot but no risk no reward I am just trying to do my best and calculate the risk. I currently own HHV and WMI.

 

Oh and another tip.
Don't model your strategy on strangers advice on the internet.

 

Hahahaa yep @BKRinvesting i don't know if anyone jumped on the wmi ship but I am well happy with it so far

 

It's worth playing with the free version of sharesight.com. It's great for looking at investment return/performance (both capital and income) by entering in dummy trades or using the share checker.

New feature: Quickly check share performance and dividends

 

Rather than stashing all money in offset, probably buy a small parcel now (like LIC) and use the other part whenever market tanks. Though the market correction is anticipated, no one really knows when it is going to happen. I'm following the same approach since April this year via debt recycling albeit in small parcels.

Some benefits....
- $19K non-deductible debt interest savings(assuming you recycling PPOR debt )
- Exposure to market and any growth that occurs until the impending correction happens
- Franked dividends & tax deductible interest

 

Small parcels is good!!

Mine is from IP refinance etc so all doing debt recycling so I can't. Chuck it in Offset as then it's too hard tax wise to work out

All good I'm sure I'll invest soon enough going to crunch some numbers and see what has decent value tonight in the lic area

 

If you're going for small parcels consider brokerage as a percentage of the trade.

 

Is this because you want a discount? Many shares consistently hit 52 week highs due to strong performance.

If it's at a 52 week low and it continues on that downward trend, then you'll have bought at the highest point.

 

I have posted this before but attach it here again as it is quite pertinent:


If you think you have 1) already over-analysed the market and 2) already acquired a grasp of what is good value, then all that remains is to get started. Don't go all in (wait for the market to dip on "bad news" as devank said) but tip-toe and make your first investments part of your most important lesson: Starting.