ASX Shares What's looking cheap on the ASX?

Certainly Berkshire and MFF have been great compounders. For better or worse income investing is what I'm comfortable with and it has worked out well for us fortunately. Our goal was always to replace income from work with "passive income" from investment assets. Having to regularly sell off part of our capital (regardless of whether it is funds or individual shares) for income as opposed to receiving dividends would impact my SANF. If I was in the accumulation phase with employment income coming in then perhaps some allocation to these so called compounders may be tempting. But now in retirement and uncomfortable with the "selling of capital approach" I'm afraid these low or no income compounders regardless of expertise aren't going to fund our day to day living and lifestyle expenses.

The critical thing for anyone reading my posts is to bear in mind that these views are mine and mine only. It's what through experience I feel comfortable with and allows me to sleep well at night. They are not recommendations or suggesting that my way is superior to countless other investing alternatives. Far from it. But if someone finds something useful well and good, I still continue to learn and get enjoyment from other posters here. No matter what anyone of us says if it doesn't sit comfortably with an individual it is more likely to fail regardless of its merit.

 

Spot on.

 

Any thoughts about the other bank shares - NAB, Westpac, Commbank?

 

lol.
I heard their administrators are taking offers for the whole or part of their business via email.
Almost sent them an email last nite...wanted to take a laptop off their hands..

 

You can probably buy the whole company for less.

 

haha, how maybe ill put an offer in, I wonder if 6 figures would be a decent lowball

 

I think everything is cheap at the moment.The question is, will it be even cheaper tomorrow?

 

If you're chasing yield, ANZ and NAB are currently 'on sale' @ 7.3% yield on $25 and $27 respectively. They would be ok entry points if you were starting out and DCA.

Personally though, I have no cash at the moment, and going forward Im really only looking at accumulating ETF/LICs and have been researching while I am on the sidelines.

pinkboy

 

looks like its going to be another rough day out there.....

 

So it seems and the economic news out of the US seems quite positive..seems like quite the disconnect.

 

What shares would you guys buy for yield?

Am I reading this right as an example?
BHP paid total dividends of $1.66 last year. Plus $0.7 franking credits. With share price today at $15.50, total yield is 15.2%.

Notwithstanding that the market has priced in a reduction in eps and dividend.

 

So did you buy BHP? Yesterday morning was only 14.50 I keyed in a buy and the price went up 5 cents before I could capture it and I decided to abort.

I had bought at 17.52, 16.14, 15.75, 15.52, 14.57

Interesting times indeed, especially when the stock market reactions are not dictated by what happens within our shores but rocked by external events and markets.

It's a good time to have cash in hand.

KY

 

Quoted once again for truth!

I am an income focussed investor like yourself. I am curious if you (or the Falcon, or anyone else interested in this area) are attracted to the high yielding ETFs at all? In general, I am skeptical of the "smart beta" approach, and would pretty much always avoid it and go for market cap, lowest cost (i.e. Vanguard).

However VHY doesnt sit well with me, and I seem to remember at one stage owned large holdings in resource companies due to the high "forecast" dividend. It has underperformed VAS, their standard ASX300 ETF.

But I have just discovered Russel has a high yielding ETF, called RDV, which has a methodology which seems more solid - screening for stability of dividends, not just the highest forecast, if it doesn't meet filters, the holding is kept at index weight, etc. And unlike VHY, it has actually outperformed the ASX200 over the last 5 years.

What do people think of this ETF - RDV?

 

I am the opposite. Given the choice at the very least during your accumulation stage always prefer CG assets over Income assets. Reason is very simple, on every dollar you receive as income a portion (depending on your marginal tax bracket) goes to the Tax department which means that money will never ever compound for you. Read following post I made on Somersoft forums.

I have decent portfolio of VAS (no VHY) but nowadays I am only DCA on VTS. The yield is 1.5% or thereabouts. I am fine with that I don't need the income for several years still.

Cheers,
Oracle.

 

Thanks for the response Oracle. Yes I am well aware of the preferential tax treatment of capital gains vs income. But due to my circumstances and own personal preferences, similar to those Austing highlighted, income investing is what suits me best.

 

Own VHY but it was a mistake in hindsight. I rarely sell but this one may go at some stage. Many of these smart beta ETFs result in much higher turnover and are flawed in my view. Of course there may be a few worth looking at, I know the Falcon likes one of them. However I just don't like or feel comfortable with them. Hence I much prefer old fashioned Market Cap indexes as my only ETF holdings even though they are not entirely without issues. If I want so called smart beta (stupid names the industry creates) I will just stick with low cost "active" managers such as the older LICs (ARG, AFI etc) or the higher cost quality LIC fund managers such QVE, MIR, PMC ... .

As for the preference of CG assets over Income assets you could argue endlessly about which is best with both sides throwing up convincing data to support their case. I don't even bother getting caught up in such debates nowadays. I just stick with the one that suits my investing style, circumstances and lets me sleep well at night.

 

Looking like things will be a lot cheaper on Monday......

 

Yep. Watched the Dow drop as much as 500pts last night (eventually 390pts down) and was thinking to myself that 10 minutes into Monday there are going to be some real opportunities!

pinkboy

 

MY DCA into Managed funds kicks in on the 20th of each month. Looks like I will be buying some cheap units this month.

 

How do you plan to transition to more income focused investments in several years?
Surely it means selling your CG focused assets for more income focused ones. Which likely means a large cgt bill and then buying the new assets at the then higher price.
Phased selling/buying over a number of years I presume? How many years is right? What happens if the market wont co-operate?
Not saying right or wrong just genuinely interested. Ive never quite got my head around it.