Stock investment resources

Yes fully agree except in our case we reinvest noticeably more than 1.5% of the current dividends. As I said earlier I like to be conservative.

A new thread would be great. It should be noted I'm no expert of this topic and may not be able to add much. But given out financial circumstances I'm quite confident our conservative approach should see us through the worst of times based on market history TO DATE. As for what happens in the future that's anyone's guess?

 

It's probably fair to say that the research done on this topic has never included franking credits since they only became fully cash refundable around 2000.

So it seems to me that living on 4% divs in Aus is essentially still meeting the 4% withdrawal rate... Just so happens we get that boosted to 5.7% from franking.

It does sounds very high but I think it's just a querk of the Aus market/tax system.

I'm in the camp of having cash and other backup plans for large dividend reductions etc, so I'm definitely not at all saying that the cashflow approach is bulletproof!

It just seems franking is likely to have never been included in any of the studies...

 

Not sure what you mean about cash refundable since 2000. It's been that way since the 80's to varying degrees depending on your tax rate. Oops I just noticed your use of the word "fully" refundable. I assume you mean tax free account based Super pensions.

@Snowball at your age it really doesn't matter too much, 4% is likely fine. Even though it's probably not what you want to do the reality is you still have lots of Hunan capital to draw upon in a worse than historical worst case scenario.

I sleep well at night using the cashflow from Dividend approach with cash buffer. I've read countless SWR studies over the years and there's been nothing that has convinced me to change my existing approach as a retiree.

In case you didn't see it this is essentially what we do:
Sequence of Return Risk

 

Cheers mate.

Oh I meant 2000 since franking credits became refundable in cash, not just reducing tax bill.


Meaning no wasted credits and lower income earners receive franking credits as tax refund. Effectively meaning franking became equal to cash and as part of the natural yield.

That's the way I understand it?

Sorry I just noticed the other thread... My bad... I've been away and I'm trying to catch up on the goss

 

I don't know the history as I was gambling with any shares back in the day, and had a hit (then later miss, record) but apparently Keating introduced the dividend imputation system in 1987?

Happy for the grey nomads/silverbacks to chip in here and give us a history lesson

 

Yeah that's my understanding too. But back then I think you could only reduce tax bill to zero but not receive any actual cash refund.

Copy and paste from wiki:

A franking credit on dividends received after 1 July 2000 is a refundable tax credit. It is a form of tax paid, which can reduce a taxpayer's total tax liability, and any excess is refunded. For example, an individual with income below the tax-free threshold ($18,200 since 2011/12) pays no tax at all and can get the franking credits back in full as cash, after a tax return is lodged.

Prior to 1 July 2000 franking credits were "wasting", any excess over one's total tax payable was lost. For example, an individual at that time paying no tax would get nothing back, they merely kept the cash part of the dividend received.

 

The dirty secrets fund managers don’t want you to know!

 

Have not watched it yet, but heard of it from Tim Ferriss podcast interview with Ray Dalio



This is the link to the podcast
Ray Dalio, The Steve Jobs of Investing

 

Found a new podcast, Ted Seides runs (better interviewer than investor lol) It’s a mix of personal / insto focussed stuff but some real gold in there. Always great to hear Tom Russo and Charles Ellis.

Podcast – Ted Seides

Also amazed by how strongly “The Investors Podcast” continues to go, I remember finding them when they had only done about a half a dozen eps, now up to 172 !

Podcast

 

Might have been mentioned already but another great podcast with an equities focus is "Adventures in finance"

 

This is a very good presentation from Morgan Housel

Morgan Housel on What Other Industries Teach Us About Investing - MicroCapClub

 

One of my mates sent me this the other day..

Running with the Bulls..

https://russellinvestments.com/-/media/files/au/insights/2018-global-market-outlook.pdf?la=en-au

 

From Ashley Owen’s firm: Outlook

https://lx236.infusionsoft.com/app/...0743d31970609817bb9d816cd900e0c2920bcc3d6c39c

 

Fund managers, can't live with 'em, can't burn 'em.

 

These are an old newsletter we use to receive from Ashley Ormond (Ashley Owen) before he got involved with Stanford's.
The one with the "Fear and Greed Index" if any one can sort out the math behind this please let us know.
The other one "Dividend Yields" read his last sentence and check out the date.

 

Some people I think will find this useful if they have enough interest in the subject matter. Coursera is one of the main providers of MOOCs (Massive Open Online Courses). They have a program called Financial Markets which was put together by Robert Shiller at Yale.

The course is FREE if you dont want the certificate.

Financial Markets | Coursera

About this course: An overview of the ideas, methods, and institutions that permit human society to manage risks and foster enterprise. Emphasis on financially-savvy leadership skills. Description of practices today and analysis of prospects for the future. Introduction to risk management and behavioral finance principles to understand the real-world functioning of securities, insurance, and banking industries. The ultimate goal of this course is using such industries effectively and towards a better society.

This is a wide ranging overview of financial markets (US centric), probably 20-25 hours of work. It will introduce you to concepts for further investigation / study. Adults with rational expectations only, not a program to teach you how to get rich quick Knock yourselves out!

 

Read up the forums, followed a lot of back and forth between @austing and also @The Falcon in his stock 'picks'. Attended Peter Thornhill back in early 2016 and then took the jump in May. Bought some MLT, WHF, QVE for LICs and FLT when it nosedived from poorer than expected results.

Nearly 2 years in, excluding dividends, MLT up 6.25%, WHF up 12.3%, QVE up 15.15%, FLT up 50.96%. In hindsight, Warren Buffet's saying 'Fearful when others are greedy and greedy when others are fearful" really rings true. Especially with FLT.

The LICs were okay, steady, does their thing, I dont have to worry about beating the market. They do their thing and I get a dividend check every so often.

FLT in hindsight, being greedy when people were bashing the stock was good! Obviously 2 years is a short term, maybe FLT will eventually go bust... who knows...

Didn't really logged into Commsec to check. Moving forward, I'm just going to wait until some crash starts happening, then start to take interest

 

Well done on FLT @Wukong

 

@The Falcon thanks to you. Have your list saved up for me to pick n choose during the next crash.

 

Like hearing these stories. Nice work!

I got lucky on FLT, managed to pick it up for $29 - up around 70% plus divs.