Author Topic: Australian Investing Thread  (Read 568407 times)

potm

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Re: Australian Investing Thread
« Reply #350 on: November 20, 2014, 04:38:24 PM »
Yeh, just had a look and it's 98% NA, Europe and Japan.
The net dividend reinvestment is interesting, I wonder how that is treated from a Tax perspective.

dungoofed

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Re: Australian Investing Thread
« Reply #351 on: November 20, 2014, 06:41:37 PM »
Hi potm - thanks for the heads up. Just to be clear, this is a potential alternative to WXOZ or IOO? And the reason is because it is domiciled in Australia AND has significantly lower fees. Sorry, still learning here.
« Last Edit: November 20, 2014, 06:48:29 PM by dungoofed »

potm

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Re: Australian Investing Thread
« Reply #352 on: November 20, 2014, 07:40:11 PM »
Yes, it is similar to WXOZ but by Vanguard so it has lower fees. Also provides full replication to the index unlike WXOZ.

dungoofed

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Re: Australian Investing Thread
« Reply #353 on: November 20, 2014, 08:16:37 PM »
Awesome, thanks.

slothman

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Re: Australian Investing Thread
« Reply #354 on: November 20, 2014, 09:44:18 PM »
thanks potm! finally an all-in-one low-cost international index ETF.

what are some markers to determine a good time to get in? i feel that the US market is overvalued at present, and the AUD dollar has already dropped so much

superannuationfreak

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Re: Australian Investing Thread
« Reply #355 on: November 20, 2014, 09:50:17 PM »
Good news people!
Vanguard have some new ETFs. Solves the tax problem we were talking about earlier.
https://www.vanguardinvestments.com.au/retail/ret/investments/etfdetailVISIFE.jsp

Also a hedged version available. World ex Aus, not a CDI, everything we asked for. The MER is a little high compared to the US ones but this is Australia and .18 isn't too bad. Now all we need is the dow at 10000 and the AUD at 1.05 again haha.

This is a great product, with cost the same as Vanguard's underlying (wholesale) index fund.  For most individuals who just want some additional diversification at low cost, this lowers the cost and hassle of international investing to much the same cost as investing in Australian Shares.

DrowsyBee

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Re: Australian Investing Thread
« Reply #356 on: November 21, 2014, 01:35:38 AM »
Since I'm only just getting into investing, can I just hold everyone up and ask the most amateur question ever (since we're on the subject of Vanguard funds)?

If I want to start investing, and contribute money each month, do I need to just either invest straight with Vanguard, or do I need to do it all through a broker?

Sorry, I just don't know where to start and don't want to make my first move a wrong one.

Edit - I probably should have been more clear on this. but what are some of the good brokers to go through, fee wise?
« Last Edit: November 21, 2014, 02:45:01 AM by DrowsyBee »

dungoofed

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Re: Australian Investing Thread
« Reply #357 on: November 21, 2014, 03:33:35 AM »
Hi DrowsyBee -

If it's Vanguard you want, you have the choice of investing direct with Vanguard's retail funds, or by purchasing ETFs on the ASX via a broker.

Discount online brokers are best - the cheaper the better. I think there have been a few suggestions in this thread already.

Personally I use HSBC who use the broker "Third Party Platform" which isn't the cheapest but HSBC's personal banking has served me well and their share trading integrates to an extent with my bank account. Otherwise I don't have any particular loyalty and would move if someone built a better mousetrap.

DrowsyBee

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Re: Australian Investing Thread
« Reply #358 on: November 21, 2014, 05:11:07 AM »
Thanks dungoofed, I really appreciate it.

I'll be looking in to all of this very soon as I've just built up my emergency fund recently and am keen to start investing in the new year.

AustralianMustachio

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Re: Australian Investing Thread
« Reply #359 on: November 22, 2014, 01:37:31 AM »
Thanks potm for the Vanguard update. Super interested in the new Vanguard fund - it means diversification without having to buy multiple ETFs and incur excess brokerage, which makes it much more efficient to implement a dollar cost averaging approach.

I thought some Australians might find this website useful for ideas for constructing their own portfolio using ETFs

https://www.stockspot.com.au/how-it-works/portfolios/
https://www.stockspot.com.au/how-it-works/our-chosen-etfs/

AustralianMustachio

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Re: Australian Investing Thread
« Reply #360 on: November 22, 2014, 01:39:45 AM »
I particularly like this list of various ASX ETFs, though I think it's not complete. If anyone has found a more comprehensive list please let me know

https://www.stockspot.com.au/insights/etfs-compared/

deborah

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Re: Australian Investing Thread
« Reply #361 on: November 22, 2014, 02:40:38 AM »
I particularly liked the pinwheel - https://www.stockspot.com.au/australian-etfs/#18



slothman

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Re: Australian Investing Thread
« Reply #362 on: November 22, 2014, 03:21:05 AM »
how is the liquidity and slippage of VGS or is it too early to tell given it's a brand new listing?

This_Is_My_Username

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Re: Australian Investing Thread
« Reply #363 on: November 22, 2014, 04:28:28 PM »
Good news people!
Vanguard have some new ETFs. Solves the tax problem we were talking about earlier.
https://www.vanguardinvestments.com.au/retail/ret/investments/etfdetailVISIFE.jsp

Also a hedged version available. World ex Aus, not a CDI, everything we asked for. The MER is a little high compared to the US ones but this is Australia and .18 isn't too bad. Now all we need is the dow at 10000 and the AUD at 1.05 again haha.

This is a great product, with cost the same as Vanguard's underlying (wholesale) index fund.  For most individuals who just want some additional diversification at low cost, this lowers the cost and hassle of international investing to much the same cost as investing in Australian Shares.

With VGS, would we expect to receive approx ~2.4% annual cash dividends (or DRP), similar to WXOZ http://www.spdrs.com.au/etf/fund/fund_detail_WXOZ.html ?

?

This_Is_My_Username

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Re: Australian Investing Thread
« Reply #364 on: November 22, 2014, 04:33:05 PM »
I particularly like this list of various ASX ETFs, though I think it's not complete. If anyone has found a more comprehensive list please let me know

this is a convenient and easy site, but the list ist not 100% complete.
http://en.wikipedia.org/wiki/List_of_Australian_exchange-traded_funds

this has the full list, but is slightly more difficult to navigate
http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm

deborah

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Re: Australian Investing Thread
« Reply #365 on: November 22, 2014, 05:07:03 PM »
I particularly like this list of various ASX ETFs, though I think it's not complete. If anyone has found a more comprehensive list please let me know

this is a convenient and easy site, but the list ist not 100% complete.
http://en.wikipedia.org/wiki/List_of_Australian_exchange-traded_funds

this has the full list, but is slightly more difficult to navigate
http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm
Not 100% complete!!! It only has 55 of them. The full list appears to be 74 - and the pinwheel is supposed to have 75. So maybe the pinwheel is complete?



superannuationfreak

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Re: Australian Investing Thread
« Reply #366 on: November 22, 2014, 06:42:18 PM »
Good news people!
Vanguard have some new ETFs. Solves the tax problem we were talking about earlier.
https://www.vanguardinvestments.com.au/retail/ret/investments/etfdetailVISIFE.jsp

Also a hedged version available. World ex Aus, not a CDI, everything we asked for. The MER is a little high compared to the US ones but this is Australia and .18 isn't too bad. Now all we need is the dow at 10000 and the AUD at 1.05 again haha.

This is a great product, with cost the same as Vanguard's underlying (wholesale) index fund.  For most individuals who just want some additional diversification at low cost, this lowers the cost and hassle of international investing to much the same cost as investing in Australian Shares.

With VGS, would we expect to receive approx ~2.4% annual cash dividends (or DRP), similar to WXOZ http://www.spdrs.com.au/etf/fund/fund_detail_WXOZ.html ?

This is the factsheet for the underlying fund: https://static.vgcontent.info/crp/intl/auw/docs/funds/factsheets/ret/visif.pdf?20141119|125200
Looks like we can expect distributions around the 2.5-3.5% range under current conditions.

Re: liquidity, I saw spreads of 14c by the market-maker per roughly $50 share.  So we're looking at around 0.25-0.3%, which is about the same as the buy-sell spread on an index fund and about the same as WXOZ.  Since spreads on most of the international ETFs remain wide (see the last few pages here: http://www.asx.com.au/documents/products/ASX_Funds_Monthly_Update_-_October_14.pdf ) it may be some time before we see much improvement.  Still, not too bad, similar order of magnitude to moderately-sized brokerage costs ($11-20 for $3000-5000 worth of shares).

AustralianMustachio

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Re: Australian Investing Thread
« Reply #367 on: November 23, 2014, 01:48:42 AM »
What do people think is the better long term option - the hedged or unhedged version of Vanguards new World Ex-Australia ETF?

Clearly in the short to medium term the unhedged one looks more appealing, with the falling dollar predicted to continue. But for the long term, if one was to contribute regularly over the next decade and more, is it better to go hedged?

At least in the short term, my unhedged holding of VTS has balanced out VAS nicely. As the AUD fell, the "carry trade" appeared less attractive for the international investors, and the banks sold off. This dropped the value of VAS and VHY, but the falling dollar vs the USD also lifted the value of VTS.

superannuationfreak

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Re: Australian Investing Thread
« Reply #368 on: November 23, 2014, 02:17:07 AM »
What do people think is the better long term option - the hedged or unhedged version of Vanguards new World Ex-Australia ETF?

For the long term I prefer unhedged.
- Hedging is imperfect and does create some drag in returns
- In expectation over the long term a costless perfect hedge should be neither positive nor negative
- Historically for those with a long horizon and less than about 50% international equities results have been stronger without hedging for Australians, providing better diversification (See page 5: https://careers.jpmorganchase.com/jpmpdf/1158630198939.pdf ).
- The currency hedging throws off income so isn't tax efficient

In the past I've split 50:50 hedged to unhedged (which I think will also be fine) but now more than 90% of my international equities are unhedged.

Later note: there's a Vanguard paper discussing the issues of hedging here: https://www.vanguardcanada.ca/documents/to-hedge-or-not-hedge-tlrv.pdf
I haven't read it in detail yet, the overall conclusion suggests there isn't a one-size-fits-all approach for equities (but hedge global bonds, as most funds do).
« Last Edit: November 23, 2014, 07:24:25 PM by superannuationfreak »

dungoofed

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Re: Australian Investing Thread
« Reply #369 on: November 23, 2014, 04:31:24 AM »
I have trouble coming up with any scenarios where getting a hedged version of a product would be worth the premium on the currency conversion/drag compared to non-hedged. Assuming, of course, one cannot predict the future.

Watch Japanese stocks - every time an announcement is made that drives down the value of the yen, stocks immediately respond by shooting through the roof. The value of the underlying business doesn't change.

AustralianMustachio

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Re: Australian Investing Thread
« Reply #370 on: November 23, 2014, 05:09:11 AM »
Thanks for the responses, that's pretty much the conclusion I'd come to

AustralianMustachio

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Re: Australian Investing Thread
« Reply #371 on: November 24, 2014, 06:58:56 PM »
Yeh, just had a look and it's 98% NA, Europe and Japan.
The net dividend reinvestment is interesting, I wonder how that is treated from a Tax perspective.

The fund has 1.9% allocation to "Asia Pacific ex-Australia, Japan." I'm guessing that would have to be South Korea, considering it's a developed markets fund?

I noticed, when comparing our options for emerging market ETFs, that Ishares Emerging Market ETF (IEM) contains a 15% allocation to South Korea, whereas Vanguard's (VGE) doesn't have any South Korea. So I for one am happy it makes it into the VGS allocation, if that's what it is.

VGE came out this year, unlike IEM which has been around since 2003. Perhaps by the time VGE came out South Korea wasn't considered "emerging" anymore

superannuationfreak

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Re: Australian Investing Thread
« Reply #372 on: November 24, 2014, 07:28:53 PM »
Yeh, just had a look and it's 98% NA, Europe and Japan.
The net dividend reinvestment is interesting, I wonder how that is treated from a Tax perspective.

The fund has 1.9% allocation to "Asia Pacific ex-Australia, Japan." I'm guessing that would have to be South Korea, considering it's a developed markets fund?

I noticed, when comparing our options for emerging market ETFs, that Ishares Emerging Market ETF (IEM) contains a 15% allocation to South Korea, whereas Vanguard's (VGE) doesn't have any South Korea. So I for one am happy it makes it into the VGS allocation, if that's what it is.

VGE came out this year, unlike IEM which has been around since 2003. Perhaps by the time VGE came out South Korea wasn't considered "emerging" anymore

I checked the holdings of the underlying fund for VGS:
https://static.vgcontent.info/crp/intl/auw/docs/funds/holdings/visif_holdings.xls?20141124|095500
No Samsung but it does have Singapore Telecommunications so I think it is just Singapore and Hong Kong, not South Korea.

A tiny little (%-wise) bothersome gap.  Vanguard (US) moved to indices allocating South Korea as developed a while back.  There is wide variation though (e.g. the various iShares ETFs allocate South Korea to Emerging, while different Schwab ETFs go each way).

potm

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Re: Australian Investing Thread
« Reply #373 on: November 24, 2014, 07:52:23 PM »
It should just be based on the http://en.wikipedia.org/wiki/MSCI_World index minus the Aus companies.

AustralianMustachio

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Re: Australian Investing Thread
« Reply #374 on: November 29, 2014, 07:20:17 AM »
That pinwheel is great. Tho I'm not sure if it's 100% accurate. It has the dividend yield of MVW at 0.56%, but I've seen a video where the ETF developer stated the dividend yield is 3.7% or something, which seems much more likely

AustralianMustachio

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Re: Australian Investing Thread
« Reply #375 on: November 29, 2014, 07:23:33 AM »
Also, what's with the Stockspot model portfolios all having 10% in Gold? I didn't think gold was considered such a mainstream investment, more of a specialty which appeals to some people.

I also find it strange the Stockspot idea - they simply buy ETFs for you, and charge you for it. Unless they automatically perform things like tax loss harvesting and rebalancing (ala Betterment in the US) then I can't see the point of paying them fees to do something as easy as buy you a list of ETFs.

dungoofed

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Re: Australian Investing Thread
« Reply #376 on: November 29, 2014, 11:03:08 PM »
Stockspot is trying to position itself as Better-front for the Australian market, and have come to market with just  their MVP to at this stage. Unfortunately fancy pinwheels and graphs and a slick interface only take you so far if the underlying product is lacking.

Someone mentioned elsewhere that they rebalance at 15% drift from the targeted holding (so they would rebalance a 10% targeted holding when it was outside 8.5%/11.5% of your portfolio), which seems quite frequent to me, especially seeing as you still pay brokerage. For comparison, Permanent Portfolio suggests rebalance at 25% (so that would be a 7.5%/12.5% band for a 10% target allocation) or once a year, whichever comes sooner.

Regarding 10% gold, I am also a little baffled by it. On the one hand their portfolios have a massive home bias, which I'd say reflects the average Australian investor quite well. But then there's odd 10% gold allocation. All I can think is that they're trying to include something that is not correlated with the other holdings, to give more rebalance opportunities perhaps?

dungoofed

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Re: Australian Investing Thread
« Reply #377 on: November 30, 2014, 05:05:07 PM »
....although looking at the open this morning you'd have to wonder how uncorrelated gold is. Gold down almost 3% since the open, VAS down almost 1%.

Primm

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Re: Australian Investing Thread
« Reply #378 on: November 30, 2014, 05:44:40 PM »
Speaking as one of the Completely Unknowledgable, could this not be a quirk of the Australian stockmarket though, where a largish proportion of the companies held by an index ETF like VAS are miners? I could just be talking out of my arse...

dungoofed

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Re: Australian Investing Thread
« Reply #379 on: November 30, 2014, 06:00:24 PM »
You're right, VAS and gold are coupled more than, say, VTS and gold.

Gold is down a lot because of the result of the Swiss referendum over the weekend. VAS is lower because of lower commodity prices across the board (starting with oil).

bigchrisb

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Re: Australian Investing Thread
« Reply #380 on: November 30, 2014, 08:40:32 PM »
I've been pleasantly surprised at how un-correlated my international ETFs have been with the Aus market over the last couple of months.  While this is largely an exchange rate story, it has certainly softened the blow from the ASX.

Over the last 12 months:
VAS - price approx 0% income approx 5%, total = 5%
VEU - price approx 6% income approx 3% total = 9%
VTS - price approx 23% income approx 2% total = 25%

Over 2 years, the story is even stronger, with VTS up close to 80% plus some dividends.

Means my current purchases have been focused on Australian shares - basically a re balance without capital gains tax

sirdeets

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Re: Australian Investing Thread
« Reply #381 on: November 30, 2014, 08:57:31 PM »
Black friday sales across the ASX...
A bunch of companies I'm interested in in argiculture, health care and resources down 5-10%.
Anyone stocking up?

potm

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Re: Australian Investing Thread
« Reply #382 on: November 30, 2014, 09:08:27 PM »
I think Cyber Monday sales might be more apt :P

While I'm not surprised with the overall market movements, I am surprised at how well my main holding is doing.
I've taken the chance to sell down and buy other companies to diversify my holdings a bit. It still makes up about 45% of my portfolio.
TGA for those interested.

In the process I've increased my dividend income as the other companies I'm buying are higher yielding now. Quite happy about that!

AustralianMustachio

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Re: Australian Investing Thread
« Reply #383 on: December 01, 2014, 05:37:22 AM »
It's days like this that make me wish I'd invested in MVW over VAS! :p

That being said, I've bought a little bit today

The Falcon

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Re: Australian Investing Thread
« Reply #384 on: December 01, 2014, 08:24:31 PM »
I've got WOW and BHP on the watch list at the moment.

bigchrisb

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Re: Australian Investing Thread
« Reply #385 on: December 03, 2014, 07:49:09 PM »
Yep, I'm casually shopping at the moment too.  Had intended to pick up some BHP but missed it when it was below $30.  Snapped up some STO today while it was in the low 8's.  I figure that the energy stocks are going to have a tough couple of years, but as long as they survive, the underlying energy consumption story will keep on.

The Falcon

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Re: Australian Investing Thread
« Reply #386 on: December 03, 2014, 11:28:48 PM »
For sure Chris. I am with you on that. I've just printed out a bunch of research on BHP/STO/WPL/ORG/OSH to take with me for some light reading on an overseas trip next week. Oil and Gas will be depressed for some time, so no need to jump immediately, but want to know what I want!

AustralianMustachio

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Re: Australian Investing Thread
« Reply #387 on: December 04, 2014, 04:40:19 AM »
"Perhaps the point of this is that in the equity market we have, with its high concentration of large banks and large miners, investing in “the index” may not make as much sense as it does elsewhere. If your local index happens to be well diversified and stocked with a wide range of world-class enterprises, then by all means invest in it. In Australia, perhaps a more thoughtful approach is warranted."

From Roger Montgomery's website - http://rogermontgomery.com/a-good-year-for-active-fund-managers-2/

In this article the writer is obviously hinting at using a managed fund, i.e. Montgomery Fund, but that website has had some quite educational material on it in the past for me and I found the article compelling.

The risk of the huge skewing of our index towards the top ten stocks has been shown recently with BHP going downhill along with WOW and a few others. However the higher dividends of Australian shares and attached franking credits are an obvious positive. If it wasn't for those, I'd consider having a "reverse-home bias" and investing a much greater amount in the Vanguard World Ex-Australia ETFs, probably choosing the hedged version if I had very little Australian share exposure.

MVW seems to address this problem nicely, and my interest in it is still very much there, however the lack of liquidity troubles me a little.

What do people think about investing in the ASX as an index, considering it's pretty much gone nowhere this year?

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« Reply #388 on: December 04, 2014, 04:50:29 AM »
>What do people think about investing in the ASX as an index, considering it's pretty much gone nowhere this year?

meh..   it goes up, it goes down. 

4% dividend yield is fairly easy to find, and that will fund FIRE.

so., I don't really care. 

AustralianMustachio

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Re: Australian Investing Thread
« Reply #389 on: December 04, 2014, 05:09:06 AM »
Fair enough!

However for me the reality is that higher returns will bring about FIRE much quicker. For instance, if one had invested more in VTS over VAS for instance over the last few years:

https://www.google.com/finance?q=asx%3Avts&ei=IEeAVJGsNcTskAWo4YHYDQ

potm

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Re: Australian Investing Thread
« Reply #390 on: December 04, 2014, 05:56:12 AM »
Be careful at looking a specific timeframe and thinking that's what will keep happening in the future. If anything I think it decreases the chances.
Look here for a longer timeframe of performance for various asset classes:
https://www.vanguardinvestments.com.au/retail/ret/investments/managed-funds-retail.jsp#grossperformancetab

AustralianMustachio

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Re: Australian Investing Thread
« Reply #391 on: December 04, 2014, 06:47:30 AM »
Thanks potm I've seen that before but it's a very good point. I don't think I made my last post very well - I'm not concerned at all that the asx hasn't gone up. My concern regarding the asx is the concentration risk of the biggest companies making up such a high proportion. This has been illustrated recently with the falls I mentioned in bhp, Sto wow etc leading to the market being flat. And this is not the case with VTS, which is a much more diversified index. That's my main issue, the diversification ,  not the performance.

Personally I love that the market is flat because as you say things are cyclical, and part of me thinks it has further up to go! I personally keep looking at the small cap vanguard fund VSO for that very reason - it has gone down over the last three four years, and I wonder now and then if it's time for a rebound! Haha though I'm only partly serious on that - the small caps have probably gone nowhere due to a small cap resource players that either fail or are looking to get squeezed out of the market by the big guys with the falling commodity prices

cakie

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Re: Australian Investing Thread
« Reply #392 on: December 04, 2014, 06:02:22 PM »
I have a basic question about tax. If I have a higher income than my partner, should we put all our savings and investment accounts in his name? Then the tax on the interest/dividends will be less, yeah?

Does it matter if the money comes straight from my pay into his accounts?

Typos fixed! That looked very painful to read before...
« Last Edit: December 04, 2014, 07:07:44 PM by cakie »

HappierAtHome

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Re: Australian Investing Thread
« Reply #393 on: December 04, 2014, 06:13:42 PM »
I havea basic questipn about tax. If I have a higher income than my partner, shoukd we put all our savings and investment accoumts in his name? Then the tax on the interest/dividenda wi be leas, yeah?

Diea it matter if the money comes straight from my paycheck into hus accoumts?

SOREY FOR THE TYPOS my phone is bwing weird...

I asked this question at an MMM Meetup (where we had some mustachian accountants present) and their answer was that the ATO would view this as tax fraud (or some other kind of illegal tax avoidance... can't remember whether the word fraud was used or not).

My understanding is that the legal way to do this is via a family trust, but I don't know much about those. 

deborah

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Re: Australian Investing Thread
« Reply #394 on: December 04, 2014, 06:23:51 PM »
I havea basic questipn about tax. If I have a higher income than my partner, shoukd we put all our savings and investment accoumts in his name? Then the tax on the interest/dividenda wi be leas, yeah?

Diea it matter if the money comes straight from my paycheck into hus accoumts?

SOREY FOR THE TYPOS my phone is bwing weird...

I asked this question at an MMM Meetup (where we had some mustachian accountants present) and their answer was that the ATO would view this as tax fraud (or some other kind of illegal tax avoidance... can't remember whether the word fraud was used or not).

My understanding is that the legal way to do this is via a family trust, but I don't know much about those. 
Anything that is in joint names can be claimed by either person - either as a deduction or income. Secondly, some investments (for instance fully franked dividends) can give you tax benefits, so you need to think this through.



potm

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Re: Australian Investing Thread
« Reply #395 on: December 04, 2014, 07:19:29 PM »
I havea basic questipn about tax. If I have a higher income than my partner, shoukd we put all our savings and investment accoumts in his name? Then the tax on the interest/dividenda wi be leas, yeah?

Diea it matter if the money comes straight from my paycheck into hus accoumts?

SOREY FOR THE TYPOS my phone is bwing weird...

I asked this question at an MMM Meetup (where we had some mustachian accountants present) and their answer was that the ATO would view this as tax fraud (or some other kind of illegal tax avoidance... can't remember whether the word fraud was used or not).

My understanding is that the legal way to do this is via a family trust, but I don't know much about those.

It's definitely legal, some very basic tax planning. Money you earn at your job is attributable to you and taxed under your name. What bank account it goes into doesn't matter. What you do with the money after that is completely up to you. If you buy investments or keep money under your partner's name then income earned on it will be attributable to him and taxed under his name.

cakie

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Re: Australian Investing Thread
« Reply #396 on: December 04, 2014, 07:22:13 PM »

I asked this question at an MMM Meetup (where we had some mustachian accountants present) and their answer was that the ATO would view this as tax fraud (or some other kind of illegal tax avoidance... can't remember whether the word fraud was used or not).

My understanding is that the legal way to do this is via a family trust, but I don't know much about those. 

This was my first assumption, but I couldn't find anything on the ATO website (which is usually helpful for these things). Then I thought about it - in Victoria, lots of people put their assets in their spouse's names (namely real estate), so that if they are sued, they can't lose these assets...if you can do it with real estate, why not other stuff?

Though it sounds like I should be depositing the whole salary in our joint expenses account and then dividing it up from there.

Secondly, some investments (for instance fully franked dividends) can give you tax benefits, so you need to think this through.

Good point, thanks :) To be honest, I still don't understand this well. I know that it means the company has paid tax on the dividends already, but I will go read up some more about the tax side of it now.

cakie

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Re: Australian Investing Thread
« Reply #397 on: December 04, 2014, 07:53:35 PM »
http://www.investors.asn.au/education/shares/understanding-shares/franking-credits/

This article was very useful! It also backs up what potm said:

Quote
Investor 4 might decide to buy the parcel of shares in his spouse’s name who doesn’t earn any income and therefore take advantage of the capacity to gain a full refund of the franking credits instead of him having to pay an extra $176.79 in tax.

Though it's weird that they used male pronouns for that one, while the other lower-income investors (1, 2 and 3) were neutral... :P

My top tax bracket will be 32.5%, but my SO will probably be 19%, unless he magically gets a well paying job...which means for every $100 of interest/dividends, he would keep $79, while I would keep $65.50 and have to pay more towards my HECS.

Well, that answers both my questions then! Thanks everyone :)

The Falcon

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Re: Australian Investing Thread
« Reply #398 on: December 05, 2014, 01:59:02 PM »
All of the above is on the money, quite hilarious the extremely poor advice you where given at a MMM meet up. So this works both ways too, should you ever wish to acquire an asset that is negatively geared, and will be for a long time then it makes sense to hold that asset in the higher earners name. Of course a trust structure is optimal, but for most people the ongoing costs involved probably aren't worthwhile.

marty998

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Re: Australian Investing Thread
« Reply #399 on: December 05, 2014, 02:53:58 PM »
It's not only applicable for investments.

Any charity donations should be made in your name cakie, if you are the higher income earner.

If you have a tax accountant, s/he should bill you only for both returns, not you and your partner.