Author Topic: Australian Investing Thread  (Read 1597027 times)

mjr

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Re: Australian Investing Thread
« Reply #4650 on: October 14, 2019, 09:57:51 PM »
I haven't mentioned the share price drop as an issue at all, neither for dividends nor franking credits.  You're doing that.  If you're a speculator buying and selling, yeah it would matter.  That's why I qualified my statements with for the long term investor.  The dividend and franking credits wiggles do not matter.

I did respond to your comments, some posts ago.  I'm not even disagreeing with you that concentration risk exists, I've already stated that I am not 100% Australian equities.

I'd like to ignore you, but you keep banging that drum.  My question was "why" ?  You pointed it out less than a week ago and unbidden you bring it out again.  As I said a few days ago, "ffs.  We get it".
« Last Edit: October 14, 2019, 10:40:01 PM by mjr »

Trevor Reznik

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Re: Australian Investing Thread
« Reply #4651 on: October 15, 2019, 01:33:32 AM »
Great debate going.  I guess all that needs to be agreed on, the ASX200 or 300 or the Australian market in general is great for investors who PREFER to receive their returns in the form of dividends and franking credits.  No it's not free money, it never was, and yes all it is is your shares or ETFs spewing out their share value as dividends, with the value coming off its share price in the process.  If they didn't post the dividends, you'd have higher capital gains returns instead.  Some people prefer to get their returns this way, others don't.

marty998

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Re: Australian Investing Thread
« Reply #4652 on: October 17, 2019, 02:38:04 PM »
I tend to agree with mjr on this one, with a slightly different take on it...

1. Your entire point is based on your idea that "Every quarter, it recovers.".
Do you really not see how fallacious this argument is?
If you set alight $500 and go and earn $500 more, it does not mean that the original $500 was never lost.

2. You are also saying that the price drop when shares go ex-dividend can be ignored for franking credits but not for dividends.

Well yeah, for most equities it does recover, because that's how equities are valued - future expectations. Only for ETFs and other funds traded at NAV does the academic theory on share price valuations perfectly hold. For every other business, it's based on expectations.

By the time a dividend is declared in respect of a previous half or quarter's results, the market is already looking forward to the next period's results.

Put up a graph of CBA's share price (down) against it's book value (up) and you'll see the difference, especially over the last five years.

Andy R

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Re: Australian Investing Thread
« Reply #4653 on: October 17, 2019, 06:41:33 PM »
I tend to agree with mjr on this one, with a slightly different take on it...

1. Your entire point is based on your idea that "Every quarter, it recovers.".
Do you really not see how fallacious this argument is?
If you set alight $500 and go and earn $500 more, it does not mean that the original $500 was never lost.

2. You are also saying that the price drop when shares go ex-dividend can be ignored for franking credits but not for dividends.

Well yeah, for most equities it does recover, because that's how equities are valued - future expectations. Only for ETFs and other funds traded at NAV does the academic theory on share price valuations perfectly hold. For every other business, it's based on expectations.

By the time a dividend is declared in respect of a previous half or quarter's results, the market is already looking forward to the next period's results.

Put up a graph of CBA's share price (down) against it's book value (up) and you'll see the difference, especially over the last five years.


I'm not really sure what your point is.

The future expectations were priced in the day before a dividend is paid out also. What changes on the day a share goes ex-dividend is based on
- all the usual expectation changes that have occurred in that 1 day; and
- the fact that a withdrawal has been made from the company to the owners (shareholders)

For the share price to "recover" back to the pre-withdrawal amounts, the future expectations of growth are going to have to be priced-in, meaning a recovery is based on (expected) new earnings, not on some idea that the drop in price when dividends are paid out is temporary and therefore irrelevant.

The point is that the price drop is definitely relevant and represents a value of your shares being removed from the company.
Similarly, when the share price drops more than the dividend amount due to franking credits being priced-in, the fact that the price eventually goes back up does not mean that a portion of your franking credits has not been eaten away.

deborah

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Re: Australian Investing Thread
« Reply #4654 on: October 17, 2019, 06:58:27 PM »
I donít see how franking credits has anything to do with price changes ex dividend. The business pays tax on its profits, and has to pay that tax whether or not anyone gets it back as a franking credit. In a purely rational world, the share price would go down by the cost to the company of the dividend (not necessarily the same as the amount the shareholder receives from the dividend). In such a world, taxes the company needs to pay would also be reflected in the share price on the date the company actually pays those.

But although franking credits are generally related to company taxes, theyíre not the same thing.

Andy R

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Re: Australian Investing Thread
« Reply #4655 on: October 17, 2019, 07:31:52 PM »
I donít see how franking credits has anything to do with price changes ex dividend.

It is essentially free money, so people arbitrage it away (in part).

Vanguard's research
Quote from: Vanguard
Investors place a higher value on dividends paid by
companies that have imputation credits attached.
This is evident in the domestic market place.
Usually after a companyís dividend is paid, the
share price drops further than the cash payment of
the dividend due to the added value placed on the
imputation credit. Our analysis of the dividend
payments from one of the largest companies by
market cap in the Australian market, National
Australia Bank (ASX Code: NAB), found that out of
64 dividend payments since 1987, when dividend
imputation was introduced, the ex-dividend price
fell by more than the cash dividend 69% of the
time. Of the declines, nearly half were of an
amount greater than the grossed-up dividend, the
other half being an amount slightly less than the
grossed-up amount. Similar results were obtained
from analysis of other major Australian companies
paying dividends that have an imputation component.

Other research found the same thing.
The Financial Implications of the Dividend Imputation System
Dividend imputation Ė its rationale and its impact on superannuation outcomes
Estimating The Market Value Of Franking Credits

deborah

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Re: Australian Investing Thread
« Reply #4656 on: October 17, 2019, 08:07:09 PM »
Itís interesting that some of the papers you quote say that the research has found mixed results, rather than showing definitive results. It suggests that the research isnít as black and white as you claim.

Andy R

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Re: Australian Investing Thread
« Reply #4657 on: October 17, 2019, 11:33:06 PM »
Itís interesting that some of the papers you quote say that the research has found mixed results, rather than showing definitive results. It suggests that the research isnít as black and white as you claim.

I didn't claim the full amount was priced in. I said that it is partially priced-in, which is what the research shows, and is likely due to the fact that international investors don't receive the franking credits.

If over decades 40-80% is priced in, is the fact that it is not an exact number somehow saying that franking credits are not being priced in?

If you look at non-Australian share prices, they doesn't fall by exactly the amount of the dividend paid out when they go ex-dividend, sometimes it's more and sometimes it's less. This is because the rest of the time when dividends are not paid out, the share price moves up and down. The market is reacting to new information about the company, sector, or market it is in. When a share goes ex-dividend, these forces are still in play, and therefore the share price doesn't drop by exactly the price of the dividend. This doesn't mean it's somehow not "black and white" that dividends are priced into by a drop in share price. In the same way, just because it doesn't drop by an exact amount each time doesn't mean that franking credits are not priced in.

This amount (however much it is), means that for the franking credits you get in your hand, part this amount is lost due to a drop in share price.

If you mean that it is not black and white how much it is priced in, then yes, by the nature of not all of it being priced-in due to international shareholders who don't get franking credits, and with all the other information being priced in and changing constantly, it is impossible to tell exactly how much.

mjr

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Re: Australian Investing Thread
« Reply #4658 on: October 18, 2019, 02:58:45 AM »
This amount (however much it is), means that for the franking credits you get in your hand, part this amount is lost due to a drop in share price.

Golly, so all the income I receive from dividends that I get in my hand, 100% is "lost" due to a drop in the share price.

Silly me, I thought that that money was worth something.  Guess I'll completely ignore dividends from now on, they're worthless.

flaky

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Re: Australian Investing Thread
« Reply #4659 on: October 24, 2019, 08:16:09 PM »
I would like to thank all participants for the constructive discussions over the last few pages.

Can I run this general plan past you? I plan on buying both VEU/VTS in roughly equal measure to approximate the total world market until I approach retirement, how far away I am from retirement is still an entirely open question. I currently have low expenses. Over the last year, which is my first managing any investments, I invested roughly 25k which is above 50% of my after tax income. I make only the mandatory contributions to super, which is all invested in low-cost international equities (AUD hedged) too. I have submitted my W8-BENs on time and am happy to continue keeping it up to date.

My question relates to tax. I understand I should be approaching my tax agent to claim a tax credit, but I don't fully understand for what, how much I might get back based on my income or what documents to give them. Should I consider making pre-tax super contributions given my relatively low taxable income? If my income increases when should I start considering this?
« Last Edit: October 25, 2019, 03:58:59 AM by flaky »

mjr

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Re: Australian Investing Thread
« Reply #4660 on: October 24, 2019, 09:02:47 PM »
If you want VTS and VEU, why wouldn't you just buy VGS and be done with it.  No W8-BEN and no foreign tax credits.

If VTS/VEU, you'll be paying 15% withholding tax which you can claim as a foeign tax credit, subject to some restrictions/conditions if you try and claim more than $1000 a year.  Dividend payment advices will show the amounts.

Regarding super contributions, there are plenty of articles around.  We don't know your age, income, wealth inside and outside of super, housing situation, etc.

Big picture, you need housing and living expenses to cover to you until super preservation age age at least, assuming you want to retire early.  So you'll want some tidy amount out of super.  How you get there is up to you.

Personally, I got most of that sorted first and then started maxing out my concessional contributions and making non-concessional as well.  But what worked for me may not be right for you.

You may want to look here as well http://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333550/#msg1333550

retiremefast

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Re: Australian Investing Thread
« Reply #4661 on: October 27, 2019, 11:45:01 PM »
    Good day fellow Mustachians,

    I have joined the Aussi investing culture with a FIRE plan in mind. It is a semi-RE as I am not excluding work 100% .. just part-time / project based consultancy instead of 9-5 daily enforcement.

    My case is presented here: https://forum.mrmoneymustache.com/ask-a-mustachian/fire-in-australia
    Q1: anyway to contact an Admin to move it from "ask-a-mustachian" to "case studies" category?

    Quote
    Gross Salary/Wages:
    me (IT Consultant): AU$92k / year (9.5% Australian Super included)
    her (Internal Auditor): AU$109k / year (10% Sun Super included)
    Take-home total income (after taxes and Super): AU$ 138k
    - no additional source of income outside salaries

    Current expenses: AU$ 61k / year
    1. Fixed expenses: AU$48.5k / year
    Rent: AU$2.2k / month (AU$26.1k / year)
    Utilities: AU$0.4k / month (AU$4.8k / year)
    Transport: AU$0.3k / month (AU$3.6k / year)
    Supermarket basket: AU$1k / month (AU$12k / year)
    Romanian household): AU$0.2k / month
    2. Casual / Temporary expenses: AU$12k / year
    Mortgage (Romanian apartment): AU$0.5k / month. It is planned to be fully paid by Julyí20
    Fun & Extras (Australian lifestyle): AU$@1k / month

    Assets:
    1. 3-bedroom apartment in Bucharest (capital of Romania). When it will be fully paid, we think on put it on the market for rent. Possible income would be AU$0.6k / month (AU$7.2k / year)
    2. Romanian Savings Account (EURO) of EUR5.5k = AU$9k with no interest at the moment. Will be converted to RON to benefit from the 4% Bonus interest in the first 4 months after which, most likely, will be used to advance repay the mortgage.
    3. Romanian Savings Account (RON) of RON28k = AU$10k with 1% annual interest (compound monthly) at the moment. Will be merged with EURO savings into 1 single account to benefit from the 4% Bonus interest in the first 4 months after which, most likely, will be used to advance repay the mortgage.
    4. Australian Savings Account (AUD) of AU$19k with 1.95% annual interest (compound monthly)

    Desired Asset Allocation:
    Ideally, my aim is for a Vanguard Australia Growth ETF Portfolio with 80% Growth / 20% Income, that will be adapted every 5 years (Income will grow up and Growth will shrink down). Until reaching the CASH cap will be hit (AU$100k), no BONDS will be included. After that, only BONDS will cover the 10% of Income. We will start with AU$5k which will be adjusted as long as family income will go up with time
    ē     80% Growth
         o     40% VAS (Vanguard Australian Shares Index ETF Ė Fact sheets) - AU$2k
                 Management Fee: 0.10%
                 Performance (since inceptions): 9.88% (4.68% distribution + 5.20% growth)
                 Equity yield (dividend): 4.1%[/li][/list]
         o     40% VGS (Vanguard MSCI World ex-Australia Index International Shares ETF Ė Fact sheets) - AU$2k
                 Management Fee: 0.18%
                 Performance (since inceptions): 13.04% (3.49% distribution + 9.55% growth)
                 Equity yield (dividend): 2.4%
    ē     20% Income
         o     10% VBND (Vanguard Global Aggregate Bond Index (Hedged) ETF Ė Fact sheets) - AU$0.5k
                 Management Fee: 0.20%
                 Performance (since inceptions): 5.3% (1.81% distribution + 3.49% growth)
                 Yield to maturity (dividend): 1.34%
         o     10% CASH = ING Savings Maximizer 1.95% / year (max AU$ 100k) - AU$0.5k

    Above plan being shared with you guys, I know that improvements can be made. Shoot .. but be gentile:
    Q1: what are the flows that you can easily spot in the above plan?
    Q2: most likely will use SelfWealth when I will go live with the plan. Will I be able to find VBND when I will decide to invest into BONDS? (currently playing around with SaxoTrader and VBND is not available. Will there be a better alternative?
    Q3: as my current CASH savings will go on closing the mortgage, is it OK to just focus on CASH safetynet and put BONDS aside in the beginning? For sleeping better everynight, I was planning on raising AU$ 100k in our ING Savings Account and only after that to switch to BONDS and focus more on investing plan above. What do you think about this?
    Q4: my income will most likely increase starting Feb.20 to around AU$110k / year which will bust our yearly NET income (after TAX and SUPER) to AU% 150k. That is the time when I will consider applying Salary Sacrifice to match our employers 10% paid into Super. This will lower our Tax Margins as well as will increase the Super allocation. Is there a better way to make our income tax-efficient?

    marty998

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    Re: Australian Investing Thread
    « Reply #4662 on: October 28, 2019, 01:03:52 AM »
    Are you staying here long term @retiremefast? Or are you ever going back to Romania? Are you a tax resident here? If not, then you will get slaughtered with tax on your superannuation when leaving the country

    I don't understand what you need $100k cash for if you are not buying a house here.

    Where in Australia are you located? Where do you want to live after you FIRE? You are looking at all the sexy investing stuff without planning your endgame, which is more important IMO. Once you know that, then you can figure out a roadmap for how to get there.

    retiremefast

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    Re: Australian Investing Thread
    « Reply #4663 on: October 28, 2019, 04:16:17 AM »
    Hi @marty998

    I am Permanent Resident in Australia, living in Melbourne, paying all my taxes and following all the rules that are in place (earning a salary from a full time job with a contract). Not yet an Australian Citizen - that will come in the next 3 years or so (based on the rules in place for this)
    My wife and I we migrate here a year ago (2018) planning the next step in our life (upgrade / evolution)
    Going back to Romania is an idea (at the moment) to follow for lowering the cost of life, after preservation age (be it early retirement or normal retirement)
    The Superannuation Tax is something I am trying to understand now and make it as efficient as possible, before ever starting the journey. As I said, I am still learning my way in this investing world. This is my plan (if I can make it happen):
    1. reach Preservation Age (60 now, may change), keep money in the Super account. Pay my Cost of Life with Salary / Investing earnings
    2. reach Pension Age (65 now, may change) moving all my assets into Super account
    3. get money from Super using the Super Income Stream and spend money both in Australia (summer time) as well as my other country I chose to spend the rest of the time (most likely Romania for a better cost of living, family, easy traveling opportunities)

    Just to be clear, I am not trying to go around the system, I am just trying to use it in my advantage, following the rules. Does this make sense?

    marty998

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    Re: Australian Investing Thread
    « Reply #4664 on: October 28, 2019, 02:23:55 PM »
    I wasn't saying you were trying to cheat the system. I was trying to make you aware that your residency status would have an impact on your tax situation.

    At your incomes you should definitely be salary sacrificing into super, up to the $25,000 concessional caps. This means you can each sacrifice about $14-$15,000, since your employers already contribute about $10-$11,000 per year.

    Your tax saving (for the both of you) will be about $7,000 from doing this - your combined after-tax income will go down by about $18,000, but your super balance goes up by ~$25,000 leaving you better off overall.

    deborah

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    Re: Australian Investing Thread
    « Reply #4665 on: October 28, 2019, 02:32:59 PM »
    You need to look into how the OAP is affected by the amount of time youíve worked in Australia if you go back to Romania. Putting everything into super used to make you eligible for more OAP but doesnít now, so Iím not sure why OAP age is relevant - and itís probably 67 for you anyway.

    retiremefast

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    Re: Australian Investing Thread
    « Reply #4666 on: October 28, 2019, 02:41:35 PM »
    I know you weren't @marty998, but I felt it is better to have it cleared (others have considered my curiosity of understanding the ATO rules as a way of cheating). You are correct, the SUPER will go up very fast by Salary Sacrificing yearly to the max allowed AU$25k which would benefit, as I said, in two ways.
    About my portfolio approach, is there anything I could do better?
    Focusing on equities until I "recharge" my Cash Savings (AU$100k) is such a bad thing? I see this cash buffer a good safety net in care something goes wrong for a while (my understanding was that one should have such an account to cover monthly expenses for at least 3 months)

    @deborah we don't plan going to Romania anytime sooner. At least 15 years we should spend on Australia gaining capital for investment. Will study the OAP limits and see how is this impacting us. Thank you!

    Reversifi

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    Re: Australian Investing Thread
    « Reply #4667 on: October 29, 2019, 12:52:48 AM »
    Hi all. I've recently discovered this thread and working my way through the pages (up to page 17 now) so apologies if this has been tackled before. I've got some VAS, VGS and a little VGE but I'm looking around at REITS, I'm guessing once (if) the federal budget is in surplus there will be a splash of cash to stimulate the economy with a bunch of infrastructure projects. I've been looking at some REITS but some seem more residential targeted. Does anyone know one that would be investing in infrastructure? Part of me is tempted to just buy the Vanguard ETF for REITS (VAP). MER is .23%.
    Thanks!

    mjr

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    Re: Australian Investing Thread
    « Reply #4668 on: October 29, 2019, 01:58:53 AM »
    There's a couple of global infrastructure ETFs (like VBLD), but none that are just Australian, as far as I know.  Infrastructure funds are hard for individual investors to get into.  You can check out IFM, but I don't know if they let any ol' person in.   At the least, I think you'd need to be a sophisticated investor.

    VAP is mostly industrial, commercial/retail and office.  One or 2 small-scale residentials in there.  See https://www.vanguardinvestments.com.au/retail/ret/investments/product.html#/fundDetail/etf/portId=8206/?portfolio
    « Last Edit: October 29, 2019, 02:02:30 AM by mjr »

    vinland

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    Re: Australian Investing Thread
    « Reply #4669 on: October 29, 2019, 03:50:33 AM »
    Long time reader, first time poster here...

    Can i get some advice on my current situation. I have circa $700K cash after selling my property and planning to invest them into VAS/VGS should I just invest them in lump sum OR follow the dollar cost averaging method (e.g 20k every month)?

    My concern is that if I go for the lump sum method the price of the ETFs might drop soon after I bought them, especially there has been hype recently about there is a possibility of Australia going into recession soon in 2020 which might affect the price to go down.

    But on the other hand if I go with DCA method, I might miss the opportunity cost if the recession isn't happening and the stock prices steadily going up. Moreover since I'm selling my house I need to rent somewhere else and I need the dividend from the overall $700k to pay for the rent, if I go with DCA method I'd be bleeding money until the whole $700k invested.

    Thanks for the help! Cheers

    deborah

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    Re: Australian Investing Thread
    « Reply #4670 on: October 29, 2019, 04:07:42 AM »
    Generally it works out better if you invest it all as soon as possible. However, there is always a risk, and it depends on your tolerance for risk. Do what youíre comfortable with. No one has a crystal ball that tells the future with certainty. Itís you who needs to be able to sleep at night.


    Wadiman

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    Re: Australian Investing Thread
    « Reply #4672 on: October 29, 2019, 06:33:35 PM »
    Hi all. I've recently discovered this thread and working my way through the pages (up to page 17 now) so apologies if this has been tackled before. I've got some VAS, VGS and a little VGE but I'm looking around at REITS, I'm guessing once (if) the federal budget is in surplus there will be a splash of cash to stimulate the economy with a bunch of infrastructure projects. I've been looking at some REITS but some seem more residential targeted. Does anyone know one that would be investing in infrastructure? Part of me is tempted to just buy the Vanguard ETF for REITS (VAP). MER is .23%.
    Thanks!

    Another option to look into is the VanEyk ETF - IFRA - global infrastructure https://www.vaneck.com.au/funds/ifra/snapshot/?audience=retail

    Reversifi

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    Re: Australian Investing Thread
    « Reply #4673 on: October 29, 2019, 06:53:24 PM »
    Thanks for that, IFRA (VanEck) is Hedged. From the reading I've done UnHedged does better over the long term? Also someone mentioned IFM which from what I can see now is available to people outside HostPlus but you need to do it inside you SMSF (if you have one, I don't).

    https://hostplus.com.au/self-managed-invest/your-tailored-investment-options/ifm

    vinland

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    Re: Australian Investing Thread
    « Reply #4674 on: October 29, 2019, 07:09:08 PM »
    Generally it works out better if you invest it all as soon as possible. However, there is always a risk, and it depends on your tolerance for risk. Do what youíre comfortable with. No one has a crystal ball that tells the future with certainty. Itís you who needs to be able to sleep at night.

    Thanks, you are right able to sleep in any market condition is the utmost priority. Cheers!

    vinland

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    Re: Australian Investing Thread
    « Reply #4675 on: October 29, 2019, 07:11:43 PM »
    Some advice for lump sum investing
    Managing a windfall - Bogleheads
    6 Things To Consider When Investing A Lump Sum - Rick Ferri
    The Lump Sum vs. Dollar Cost Averaging Decision - A Wealth of Common Sense

    Seems like lump sum is the winner here on top of that my risk tolerance is quite high. Thank you very much for the great reading and enlightenment!

    Andy R

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    Re: Australian Investing Thread
    « Reply #4676 on: October 29, 2019, 07:29:09 PM »
    Thanks for that, IFRA (VanEck) is Hedged. From the reading I've done UnHedged does better over the long term? Also someone mentioned IFM which from what I can see now is available to people outside HostPlus but you need to do it inside you SMSF (if you have one, I don't).

    https://hostplus.com.au/self-managed-invest/your-tailored-investment-options/ifm

    The cost of hedging itself is around 3 basis points (3/100ths of one percent), so we can call that insignificant.
    The difference you are seeing is due to the AUD moving down in that specific period of time. It will be the opposite when it moves upwards.

    Andy R

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    Re: Australian Investing Thread
    « Reply #4677 on: October 29, 2019, 07:34:53 PM »
    Some advice for lump sum investing
    Managing a windfall - Bogleheads
    6 Things To Consider When Investing A Lump Sum - Rick Ferri
    The Lump Sum vs. Dollar Cost Averaging Decision - A Wealth of Common Sense

    Seems like lump sum is the winner here on top of that my risk tolerance is quite high. Thank you very much for the great reading and enlightenment!

    Yea, the "expected" (or average over all time periods) return is highest with a lump sum.

    Although for that amount, I'd be crapping my pants at the idea that the market could crash right after, so I'd put in half and DCA the rest over a few years. It has a lower "expected" return, but since I'm exactly one instance and can not get the average return over all time periods, I'd be willing to forego some expected returns for this. Obviously this is just what makes me comfortable and everyone will be different and I'm not suggesting this is right for anyone else.

    Reversifi

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    Re: Australian Investing Thread
    « Reply #4678 on: November 03, 2019, 07:03:17 PM »
    A question about DRPs (Dividend Reinvestment Plan) on ETFs like A200.
    I currently have ETFs with DRP activated but I need to sell some shares. With the share price of $112 the last dividend I have a part dividend as it wasn't enough to buy another share (say $80) so it gets held over until next quarter and added to that DRP. But what happens if I sell now? Do I get a cheque for that $80? Or is it better to turn off DRP and get the dividend in cash before you sell to ensure you've been paid out the full amount?

    JimmyMac

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    Re: Australian Investing Thread
    « Reply #4679 on: November 04, 2019, 03:36:17 AM »
    A question about DRPs (Dividend Reinvestment Plan) on ETFs like A200.
    I currently have ETFs with DRP activated but I need to sell some shares. With the share price of $112 the last dividend I have a part dividend as it wasn't enough to buy another share (say $80) so it gets held over until next quarter and added to that DRP. But what happens if I sell now? Do I get a cheque for that $80? Or is it better to turn off DRP and get the dividend in cash before you sell to ensure you've been paid out the full amount?

    If you sell now, when the next dividend event occurs you'll receive the residual amount ($80) as cash in your nominated bank account.

    marty998

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    Re: Australian Investing Thread
    « Reply #4680 on: November 04, 2019, 01:16:40 PM »
    A question about DRPs (Dividend Reinvestment Plan) on ETFs like A200.
    I currently have ETFs with DRP activated but I need to sell some shares. With the share price of $112 the last dividend I have a part dividend as it wasn't enough to buy another share (say $80) so it gets held over until next quarter and added to that DRP. But what happens if I sell now? Do I get a cheque for that $80? Or is it better to turn off DRP and get the dividend in cash before you sell to ensure you've been paid out the full amount?

    If you sell now, when the next dividend event occurs you'll receive the residual amount ($80) as cash in your nominated bank account.

    Yep, but only if you sell the entire stake. If you are selling part of your shareholding then the cash will stay in the DRP account.

    _____________________

    Westpac results were interesting yesterday. It seems as if they are getting in early with the capital raising in anticipation of higher capital rules from both APRA and the RBNZ. Dividend cut as well, though not unexpected.

    Two ways you could look at it, either they are smart for raising capital now before the economy hits the skids and APRA slaps higher capital rules on them, or someone has hit the panic button a bit early.

    Regardless, the share price is in for a rocky ride today.

    Reversifi

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    Re: Australian Investing Thread
    « Reply #4681 on: November 04, 2019, 05:21:38 PM »
    Thanks Marty998 and JimmyMac, that makes sense.

    mjr

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    Re: Australian Investing Thread
    « Reply #4682 on: November 05, 2019, 01:39:17 AM »
    It seems as if they are getting in early with the capital raising in anticipation of higher capital rules from both APRA and the RBNZ. Dividend cut as well, though not unexpected.

    Two ways you could look at it, either they are smart for raising capital now before the economy hits the skids and APRA slaps higher capital rules on them, or someone has hit the panic button a bit early.

    My opinion of Harzter is quite low (the only shares I have that aren't index funds are WBC).    However,  I think that seeking the capital now, in conjunction with the negative earnings reports and dividend cuts was the right thing to do.

    marty998

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    Re: Australian Investing Thread
    « Reply #4683 on: November 05, 2019, 02:18:09 AM »
    It seems as if they are getting in early with the capital raising in anticipation of higher capital rules from both APRA and the RBNZ. Dividend cut as well, though not unexpected.

    Two ways you could look at it, either they are smart for raising capital now before the economy hits the skids and APRA slaps higher capital rules on them, or someone has hit the panic button a bit early.

    My opinion of Harzter is quite low (the only shares I have that aren't index funds are WBC).    However,  I think that seeking the capital now, in conjunction with the negative earnings reports and dividend cuts was the right thing to do.

    I agree. But I also think ANZ Bank is looking to be a better bet than WBC at the moment. Strategy just seems to be a bit more coherent and a bit more advanced in terms of implementation. Capital management seems better too.

    CBA probably won't need to raise equity given the sales of Sovereign, CFSGAM and CMLA have/will deliver $8 billion.

    Though NAB has been a basket case for a decade or more, it will more than make up for it if its digital investments take off. In some respects those small blue sky tech investments could be the best thing they've ever done.

    Alchemisst

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    Re: Australian Investing Thread
    « Reply #4684 on: November 12, 2019, 08:01:42 PM »
    I have decided on a portfolio of: Vanguard Australian Fixed interest (VAF), Vanguard MSCI index international shares (VGS), Vanguard MSCI International Index hedged (VGAD), VANGUARD U.S total market (VTS), Vanguard all world ex U.S (VEU).

    I decided to have VTS and VEU for the broader exposure and lower costs than VGS, added some VGAD for currency hedging, however I'm not too sure what weightings I should have of each of these?

    Possibly to simplify I could make it only VAF, VTS, VEU, VGAD?

    Reversifi

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    Re: Australian Investing Thread
    « Reply #4685 on: November 12, 2019, 08:11:03 PM »
    Anyone used NTA calculator?

    I found this website with a lic discount estimator
    https://lifelongshuffle.com/2018/10/28/pat-the-shufflers-lic-discount-estimator/

    It seems Milton (MLT) is trading at a discount and I'm guessing this is because they have a bigger holding in banks (around 31%) than some of the other LICs
    https://www.strongmoneyaustralia.com/lic-review-milton-corporation-mlt/

    lush

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    Re: Australian Investing Thread
    « Reply #4686 on: November 17, 2019, 05:43:37 PM »
    Has anyone seen this?

    https://www.financialsamurai.com/forums/


    A bit of a rip off right! But interested if anyone has found it useful.

    marty998

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    Re: Australian Investing Thread
    « Reply #4687 on: November 18, 2019, 01:22:36 PM »
    Has anyone seen this?

    https://www.financialsamurai.com/forums/

    A bit of a rip off right! But interested if anyone has found it useful.

    Not a lot of love for that guy from what I've seen.

    happy

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    Re: Australian Investing Thread
    « Reply #4688 on: November 18, 2019, 01:55:30 PM »
    Wow, same interface.

    Reversifi

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    Re: Australian Investing Thread
    « Reply #4689 on: November 18, 2019, 08:05:39 PM »
    Meh, it's an off the shelf product. https://simplemachines.org/
    Content and community will determine if it sinks or swims.

    Andy R

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    Re: Australian Investing Thread
    « Reply #4690 on: November 18, 2019, 08:46:25 PM »
    What Reversifi said. There are loads of investment forums. Whether the interface is similar means nothing. An interface is not what makes a forum.

    happy

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    Re: Australian Investing Thread
    « Reply #4691 on: November 18, 2019, 10:51:20 PM »
    Meh, it's an off the shelf product. https://simplemachines.org/
    Content and community will determine if it sinks or swims.
    Never said otherwise

    What Reversifi said. There are loads of investment forums. Whether the interface is similar means nothing. An interface is not what makes a forum.

    Never said otherwise

    Andy R

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    Re: Australian Investing Thread
    « Reply #4692 on: November 19, 2019, 12:11:12 AM »
    What Reversifi said. There are loads of investment forums. Whether the interface is similar means nothing. An interface is not what makes a forum.
    Never said otherwise

    It wasn't a response to your comment.

    happy

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    Re: Australian Investing Thread
    « Reply #4693 on: November 19, 2019, 12:54:55 AM »
    :D

    mjr

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    Re: Australian Investing Thread
    « Reply #4694 on: November 21, 2019, 01:12:00 PM »
    My opinion of Harzter is quite low (the only shares I have that aren't index funds are WBC).    However,  I think that seeking the capital now, in conjunction with the negative earnings reports and dividend cuts was the right thing to do.

    My opinion of Hartzer is now even lower and seems to be shared by many :-)

    Westpac has always been at the forefront of trendy social causes (climate change, diversity and inclusion, same-sex marriage) but doesn't seem to have found the time to stick to the knitting.

    The hide of the institutional capital raising before this news came out.

    It'll be a fun AGM in three weeks.  Hartzer won't survive, the question is how much of the board will go with him.

    marty998

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    Re: Australian Investing Thread
    « Reply #4695 on: November 21, 2019, 01:31:10 PM »
    My opinion of Harzter is quite low (the only shares I have that aren't index funds are WBC).    However,  I think that seeking the capital now, in conjunction with the negative earnings reports and dividend cuts was the right thing to do.

    My opinion of Hartzer is now even lower and seems to be shared by many :-)

    Westpac has always been at the forefront of trendy social causes (climate change, diversity and inclusion, same-sex marriage) but doesn't seem to have found the time to stick to the knitting.

    The hide of the institutional capital raising before this news came out.

    It'll be a fun AGM in three weeks.  Hartzer won't survive, the question is how much of the board will go with him.

    The capital raising is probably to pay for the fine that they knew was coming. The trendy social causes have nothing to do with it - every company does that.

    At the top of all banks is the same complacency that was laid bare in the CBA Governance review. Executives either don't understand their business, or are incentivised on the fluffy outcomes (like team and culture and talent management) rather than "comply with the law". No one is incentivised on same-sex marriage or climate change - thats just marketing drivel. There are diversity metrics in there, but that's a good thing to shake up the old while male club that is increasingly being found wanting when it comes to both innovation and enterprise management.

    Part of it is that people have been replaced by automated systems - everyone previously charged with monitoring the sending of reports to AUSTRAC would have been automated out of a job, and there's no one left to check the automated systems are actually functioning as intended.

    The share price is now below the retail SPP offer price. Watch for everyone to call up the share registry to demand their money back - WBC might have to take $1 or two off the offer price to keep everyone happy.

    mjr

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    Re: Australian Investing Thread
    « Reply #4696 on: November 21, 2019, 01:47:29 PM »
    I'm not claiming that the trendy social causes were the cause, but I have written to Hartzer and Investor Relations in the past, with my view that spending executive time on the trendy social causes detracts from performance that would be better spent on their core business.

    The club does need shaking up, although I don't agree with the "old, white male" part.

    I wasn't going to partake of the SPP before, now I wouldn't touch it with a barge pole.