So we have 2.15M in USD.

loving it

 

Franking credits on
VAS are about the 80%
VGS 0%
VAP (also div alter per year must be some capital return) 0 -15%
VGE 0%

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The imputation credit for CBA = 100% and also that CBA seems to attain higher max price then VAS.

Difference in grossed up figures from my example at buy price $30 would have CBA give $208,000 as against VAS at $173,600

Have you considered investing in the USA market. You mention that you had USA shares so can I assume that you can hold US shares direct. I enquired about opening trading account as we have US bank account but couldn't do it without Social Security Number.

Couple of USA shares I have looked at are Six Flags (SIX) Down from $44 to $10 and were paying $3.20 pa but divy was just smashed to 25c pq and Cedar Fair (FUN) down from $53 to $13 and was paying $4 pa divy. They run amusement parks which I figure is a business that is going to suffer short term but should recover fairly quickly.

Also the cruise companies CCL and RCL. Again pay dividends and have been smashed.

Just some thoughts

This is not advice.

 

That's just because you're conditioned to the way a market will act because of past behaviours, thinking it's always safe to go long, whether in real estate or hold cash or buy shares on the way down.

There's risk in everything we do.

In America pre the GFC, you'd lose your shirt in real estate. And in Ireland, people's deposits went bust. Shorting is just as risky as as buying a house or buying BHP. In Japan if you ever went long over a 20 year period, you'd be in big trouble.

 

I don't believe it's always safe to go long.

I don't believe it's always safe to hold cash.

I don't believe it's always safe to go long on property and I have sold property before because I thought holding was too risky. Selling was a good move by the way.

While all of those are true I am not suggesting people invest in America, Ireland or Japan. My suggestion is for someone investing in Australia. Instead of attacking me personally, how about you critique my suggested porfolio and explain how the investor is going to lose their shirt, go bust or be in big trouble? I'll wait.

For you perhaps but what about for a novice who does not know what they are doing? For a novice, shorting is far riskier than buying BHP. With BHP, worst case scenario is that the investor will lose what they invested. With a short going wrong, the novice investor can lose more than they risked.

Unfortunately, it is easy to lose more money than you invest when you are shorting a stock, or any other security, for that matter. In fact, there is no limit to the amount of money you can lose in a short sale.

How Can You Lose More Money Than You Invest Shorting a Stock?

It's ridiculous to suggest that for a novice, shorting is no riskier than buying BHP.

 

Opinion: Why you should never short-sell stocks

Famous investors do it, but the average investor has too much to lose

Shorting, or short-selling, is when an investor borrows shares and immediately sells them, hoping he or she can scoop them up later at a lower price, return them to the lender and pocket the difference.

But shorting is much riskier than buying stocks, or what’s known as taking a long position. When you buy shares of company, you obviously hope they will rise in the short term or over a long period or maybe that they will just provide dividend income. When you “go long,” your maximum possible loss is 100%, or your entire initial investment. That can happen, for example, if a company goes bankrupt.

But if you have a short position, there’s no limit to how much money you can lose if the shares rise. If the share price increases soon after you place a short position, you could quickly “cover” by buying back the shares and returning them to the investor you borrowed them from. If you’re lucky, you might not lose very much.

Why you should never short-sell stocks

 

The big question is how much of a haircut are the dividends going to be now....

 

I would say a lot in the short term. Some companies are already deferring dividend payments. The pain will be felt for some time, maybe years.

No one knows when dividends will recover to normal levels. I guess that's the downside to buying quality assets at a 30% to 40% discounts with further falls in prices expected.

I don't think it is the right time for the average investor to be buying. All us average investors can do is watch and wait and hope we don't screw up the timing too much.

Edit: spelling

 

Not attacking you personally - what makes you think I'm doing that?

I'm just suggesting shorting is nowhere as risky as you say. What's your suggested portfolio? Why you so defensive lol...?!

 

Is that never like never never? My fund just saved itself a 30% fall in the market like most people experienced these 4 weeks, by shorting...

 

For a novice? I don't agree.

I posted it.

You made up a bunch of stuff that I supposedly believe that I don't believe. Why would I not be defensive? lol

 

Are you a novice investor?

 

Fair enough. I think it’s good to have more strategies up your disposal, because diff times call for diff strats. I’ve had so many Gen X and Boomers ask me abt picking bottom lately - they’d be crushed if they did it.

If you learn abt other strats, it’ll be good. If you don’t know it, then try a little and get a feel. Losing a few k initially is often best way to figure out what’s going on.

 

Hi,
I see no one has mentioned , the possibility that holding cash right now is big risk. With a big historical reserve bank bond buying program. And cash injection into the Australian money supply.
The buying power of today's cash won't be that strong in tomorrow s economy.

 

Very cognisant of the exposure of my funds to a real financial meltdown. The irony is that I have had funds spread in all sorts of accounts to ensure the funds deposit insurance (for what it's worth) since this started I have been bringing it all into my trading bank accounts and exceeding the insurance balance limits.

One of the reason I want to buy as many shares as possible is that if there was to be a financial meltdown then over time shares in good companies may be more secure.

 

It is a risk but the o.p. is holding US dollars. The Australian dollar is still falling, so holding cash in US dollars isn't actually that risky right now. The o.p. can actually make a decent amount just in the currency conversion.

 

Would you not leave your excess funds with someone like Perth Mint which provide 100% guarantee on all cash and metals backed by WA' gov? Beats keeping cash with the banks in my opinion. Wondering if you still thought shares could tank another 20% then surely keeping the powder dry in cash might be a better option?

I am trying to understand this from more experienced share guys.

 

Good question. This is where @Omnidragon's knowledge of shorting the market becomes very valuable. If the pro's are shorting then it is a strong indication to us novices that the market is still going to fall. Of course there is the possibility they are wrong but we all need to undertake our own due diligence and make our own investment decisions.

 

The accounts that the money is now sitting in are the trading accounts.

I am still sitting on the side lines apart from a smaller purchase which may or may not have been to early.

 

If you’re a property guy like all of us you should really try to diversify away from AUD and banks for a start. Nice positive correlation.

 

USD is very powerful. I actually had some US shares like Xilinx and TSMC. I’m down on the share but overall I’m up because of currency. Talk about hedge.