Share investing now

Discussion in 'Sharemarket News & Market Analysis' started by Niche, 30th Aug, 2019.

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

    Niche Well-Known Member

    Joined:
    6th Jun, 2019
    Posts:
    94
    Location:
    Newcastle
    Good afternoon all,

    I had a question I wanted to ask the wise people of PC around share investing. I'm sure we have all heard the old sayings like "be fearful when others are greedy and greedy when others are fearful" and "the best time to invest is yesterday" which in principle I agree with, however with so many events currently occurring that have the potential to throw a huge spanner in the works e.g. Brexit & the USA-China trade war, I am curious to know what everyone's view towards share investing currently is?

    Is it a time to just keep money in offset and see what happens, is it time to be aggressive and increase investments or is it just business as usual when it comes to shares (whatever that may mean for each of you).

    Looking forward to hearing everyone's response,
    Nick
     
  2. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    6,456
    Location:
    Melbourne
    1. you can't tell good time from bad if you don't watch it - this is same as realestate

    2. the share market is like the property market - it's full of all-sorts. You can't IMHO just say "share investing". The exchange is just a platform to trade all sorts of stuff - like ownerships in businesses ("true" shares), units in REITs, LICS, ETFs..... all of these things behave in different ways at different times (bit like commercial vs residential property)

    Given that preamble, I currently have a decent sum of money in bank shares and listed REITs ~ mainly for income. I have justified to myself that now is a good a time as ever as long as I can get 6% or better yield.

    The Y-man
     
    Silverson, Bunbury and kierank like this.
  3. Niche

    Niche Well-Known Member

    Joined:
    6th Jun, 2019
    Posts:
    94
    Location:
    Newcastle
    Valid point around the vagueness of "the share market" I guess my question should probably more be worded as where are people currently investing their money (sub 10k)
     
  4. Hodor

    Hodor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,135
    Location:
    Homeless
    Indexes and LICs when at a sizable NTA discount. Business as usual.

    $10k isn't going to change your life, developing regular investment strategies might.

    Given the questions you are asking you probably don't have the experience for direct holdings, $10k wouldn't get you a balanced portfolio. So you'd need to be a hot shot stock picker or lucky (maybe they are the same thing).
     
  5. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,586
    Location:
    Qld
    Like property, share investing should be seen as a long-term investment.

    What is your time frame for your $10K? If you don’t envision needing the money fir 5-10 years, invest in a solid LIC or similar. Plenty of advice on other threads.

    If you want it available in the next few years, leave it in the offset.
     
  6. Niche

    Niche Well-Known Member

    Joined:
    6th Jun, 2019
    Posts:
    94
    Location:
    Newcastle
    Thanks for the input all, I do plan to leave my money in offset as I plan to be purchasing again in the next 2 years. I was just curious what other people were currently thinking in current questionable times.
     
  7. Ross36

    Ross36 Well-Known Member

    Joined:
    14th Aug, 2015
    Posts:
    189
    Location:
    Sunshine Coast
    Sounds like a good plan. The share market is not much better than betting money at the horse races if you need your money back short term (<5yrs).

    However - if you aren't used to shares it's not a bad idea to dip your toes in. I was in a similar boat in 2007 and put my 10k in the market. I made all the mistakes you can make (bought 3 direct shares including speculative resource rubbish based on investor reports instead of a broad index, watched share prices everyday, bought just before a crash etc.) Except i didn't sell my main holding in MQG. The GFC taught me a lot about investing and "experts". MQG got hammered by 75+% and experts were saying it was going to blow up but I was convinced it was a good company. Now 11 years later my portfolio is worth a lot more and I've learnt my lessons. I don't think I know anything about predicting short term share market returns, but now I know that nooone else does either.

    Putting your 10k in now into diversified ETFs (if it was me I'd go something like 40%ASX200, 20%IVV, 20%IHVV and 20%VAE). This way you would get some experience with the aussie market, us market, the effect of currency hedging and emerging markets respectively. I have no idea if this will perform better, the same or worse than anything else but I think it would be a great portfolio both to learn with and for the long term. Not advice, just random thoughts.
     
    number 5, Froxy and Burgs like this.
  8. skater

    skater Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,801
    Location:
    Sydney
    I think, if it were me, and I only had $10k available to invest, I'd keep it in my offset. While $10k can seem like a lot of money, it isn't really much if you are going to want to pull it out again for another purchase in two years. In that time your money could halve, or double. There's no crystal ball, and stocks fluctuate constantly.

    I am no shares guru, but my philosophy is that what I put into shares, stays there, as an income stream. At the moment I'm drip feeding into it, in lumps of $10-20k at a time.
     
    Redwing likes this.
  9. NG.

    NG. Active Member

    Joined:
    9th Nov, 2016
    Posts:
    40
    Location:
    Sydney 2219
    IMO, it comes down to time in the market, not timing the market.

    Firstly I invest in Equities primarily for the dividends to help pay off my non-deductible debt. As a result majority of my portfolio is made up of banks/financial sector that return a very nice dividend yield. I also leverage off a margin loan where I also make speculative positions purely for a growth story. For example bought CSL at $185 and sold just after 12 months for a 14% profit. Still holding A2M (at $9ish) but looking to see where it goes mid 2020. Have recently acquired CSL again in the latest dip a few weeks ago to repeat the same. The outcome I seek for these growth plays is to earn a sizeable profit that covers the interest i incur on the loans associated with the equities, given the fact I direct all divvies to my non-deductible debt.

    Additionally I invest in property primarily to reduce income tax, and secondly for the growth in 30-40 years to come!

    As above I choose which asset class to invest in based on the outcome I wish to achieve. I really dont know if this is the proper way at looking at investing/setting myself up for the future, but this is how I look at it and justify, why.

    My 2 cents.
     
  10. San2018

    San2018 Well-Known Member

    Joined:
    22nd Nov, 2018
    Posts:
    107
    Location:
    Sydney
    What if someone invest 10K in some stable dividend paying LIC so that in worst case, returns from dividends will be better than returns by putting money in offset account. I was in same situation as OP last year and bought 10K worth of Milton LIC. Returns from dividend is ~5% and with franking credits it's ~7% which is better than leaving funds in offset?
    my wife's income is within tax free threshold so I invest on her name.

    And also bonus is LIC value gone up 10%.

    In less than 1 year, 16% returns from this LIC as per my Sharesight account.

    I see there is a risk but believe it's not a huge risk as dividends can mitigate the risk.

    I also bought PL8 recently which pays monthly dividend. If i need to sell PL8, i will be fine bwcause i got paid monthly dividend.

    I am new to all these, appreciate seniors input.
     
    Niche likes this.
  11. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    4,986
    Location:
    It is still all about ME!
    Short term: 10 years
    Medium term: 40 years
    Long term: Your entire life.
     
    Snowball, sharon and Niche like this.
  12. willair

    willair Well-Known Member Premium Member

    Joined:
    30th Sep, 2009
    Posts:
    4,927
    Location:
    ..Dividend --Bludger ...
    Sometimes you have to think outside the box..With the 10k sitting there as i invest in ASX listed Banks and a few UK based ..You could have bought into CBA before the div cut off a day or so ago... picked up the 231.000cps per unit and signed up into the DRP and the payday is on the 26/09/2019 and just let compounding work it's silent magic ,imho..
     
  13. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    6,456
    Location:
    Melbourne
    I'm not eligible for a seniors card yet so my input may not count :D:D:D:D

    It comes down to what we call the risk profile and financial context of the person.
    The "sticking your money in the offset" choice is less volatile than than the "let's go get units in an LIC or shares or similar"

    Many people equate volatility with "risk" - and rightly so, as the individual *may* need the capital to be returned at a certain date with a degree of certainty ~ this is where the context comes in, as the OP states they want to "purchase" in 2 years time (purchase "what" we are not told ~~ a car? a house?) and how "necessary" this is - i.e. can they delay the purchase of <whatever> if the market is down at the time.

    We also don't know the OP's financial position - eg unemployed? self-employed? earning $50k per year? Without that sort of info, it's hard to give an opinion on what people should do, and we can only give examples of what we ourselves are doing right now (and some context if possible).


    The Y-man
     
    San2018 likes this.
  14. Niche

    Niche Well-Known Member

    Joined:
    6th Jun, 2019
    Posts:
    94
    Location:
    Newcastle
    Thanks for the input,

    To expand on my situation a bit, currently full time employed earning ~80k and my partner is on ~40K, we are saving about 2k per month. The purchase is of PPoR within 2 years as my partner and I are looking to have kids withing 3-5 years. PPoR purchase can be delayed if neccessary as we are currently living in a property in my name ~86% LVR. I would say I have a medium risk appetite and my purchase of a new PPoR is currently my number 1 priority right now so as @San2018 described in their situation I feel like until it is time to purchase, my money could be doing more in LICs rather than sitting in an offset.

    I know as you said it still comes down to personal preference however I am curious to see if your recommendation changes knowing more info.
     
  15. virgo

    virgo Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    367
    Location:
    Sydney

    Is there a reason why you can't do BOTH?:D
     
    Alex Straker likes this.
  16. Alex Straker

    Alex Straker Financial Life Coach Business Plus Member

    Joined:
    30th Oct, 2015
    Posts:
    515
    Location:
    Gold Coast, Australia
    Yeh agree there is a way to structure this for receiving benefit of both but it's very dependent on circumstances. Most likely a lot of scope for strategy. Also need to be a little cautious of equities markets, showing evidence of being some what overheated at present. Likely to be cheaper by December 2019 and Xmas rally up in to Jan 2020 then begin another decline for a good chunk of 2020 also. Time will tell.