LIC & LIT Selling share portfolio to buy LIC's

Discussion in 'Shares & Funds' started by bamute, 13th Feb, 2017.

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  1. bamute

    bamute Active Member

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    Looking at selling my shares in individual companies and buying LIC's to hold forever. Main reason is to spread risk and avoid surprises many years later when tax makes it difficult to sell. Such as Woolies and Coles market share being eaten by Aldi. This will happen more in the future as the world is changing so fast.
    Anything to consider besides capital gains tax and brokerage? Perhaps buy and sell in the same day to avoid market fluctuations. Don't be buying and selling when major market news is being released etc.
    Appreciate your thoughts. There's plenty of good LIC advice on here.
     
    bamute, 13th Feb, 2017
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    ownership structure
    debt recycling strategies
    deductibility of interest
     
    Terry_w, 13th Feb, 2017
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  3. Zenith Chaos

    Zenith Chaos Well-Known Member

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    What @Terry_w said.

    I also think the experienced amongst us, not including me, might be able to give guidance about how to buy/sell at the most opportune moments.
     
    Zenith Chaos, 13th Feb, 2017
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  4. Nodrog

    Nodrog Well-Known Member

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    Before anything do you know what LICs you want to buy? Are any of then trading at a high premium at the moment?

    As mentioned previously have you looked at the best structure to hold the LICs? Is the CGT going to be substantial if shares sold now? How can you best manage CGT?
     
    Nodrog, 14th Feb, 2017
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  5. Vassago

    Vassago Well-Known Member

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    I am looking at moving our portfolio across to LICs as well.

    Planning to do it over 3 to 4 years to reduce the CGT impact.

    Currently thinking AFI/WHF (due to DSSPs) & QVE as we have a high weighting in MLT & ARG via the superfund. Could look at a bucket company setup but not sure it is worth it.

    Have selected the LICs to invest in, will probably purchase $x of LICs each month and increase if the LIC price drops. The portfolio is currently all speccy shares so slightly different to your scenario.
     
    Vassago, 14th Feb, 2017
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  6. bamute

    bamute Active Member

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    No PPOR so debt recycling and deductability not applicable atm. However this will be applicable in a few years.
    The LIC prices are all trading higher than I'd like to buy them for. But the direct shares are similar. If there is a market drop the direct shares will be more volatile than the LIC's. Therefore would rather make the change sooner while the market strong.
    Buying ex dividend will minimise income tax.
     
    bamute, 15th Feb, 2017
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