Share investing now

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

 

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)

 

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).

 

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.

 

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.

 

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.

 

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.

 

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.

 

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.

 

Short term: 10 years
Medium term: 40 years
Long term: Your entire life.

 

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..

 

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.

 

Is there a reason why you can't do BOTH?

 

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.