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2020 investment outlook: what to do with my money? What to expect for USD/EURO/AUD?

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  1. #21

    Join Date
    Mar 2010
    Posts
    5,410

    Don't outfox yourself, there is a tax on it


  2. #22

    Join Date
    Dec 2009
    Posts
    112

    If you’re paying capital gains tax on the stock sale, yes, the approach may not be tax optimal (which I mentioned). But that doesn’t apply for HK. Or are you referring to something else?

    shri likes this.

  3. #23

    Join Date
    Mar 2016
    Location
    Malaysia
    Posts
    188
    Quote Originally Posted by john_1122
    Thank you traineeinvestor, you are always very dependable!
    No secret about my shares. Please feel free to comment, and give me some tips as to yours. A few of these I don't have yet (VHY, ROOF, and a couple more), but I am looking closely and plan to buy if the prices drop a bit).
    1/3 of my total shares are in HK REITs, and I make a small profit (1%) right now. I started to buy in the earnest in September, and my profit over the last 4 moths has been of less than 1% (including dividends). So as you can see I am not the smartest investor.

    Australia:
    ASX:NAB National Australia Bank Ltd.
    ASX:WBC Westpac Banking Corp
    ASX:WAM WAM Capital Limited
    ASX:VHY VHIGHYIELD/ETF
    Hong Kong
    HKG:2388 BOC Hong Kong (Holdings) Ltd
    HKG:0005 HSBC Holdings plc
    HKG:0002 CLP Holdings Limited
    HKG:0386 China Petroleum & Chemical Corp
    HKG:2638 HK Electric Investments Ltd
    HKG:0006 Power Assets Holdings Ltd
    HKG:0808 Prosperity Real Estate Investment Trust
    HKG:0405 Yuexiu Real Estate Investment Trust
    HKG:1052 Yuexiu Transport Infrastructure Ltd
    HKG:0778 Fortune Real Estate Investment Trust
    HKG:2778 Champion Real Estate Investment Trust
    HKG:0435 Sunlight Real Estate Investment Trust
    HKG:0083 Sino Land Company Limited
    HKG:0012 Henderson Land Development Co., Ltd.
    HKG:0017 New World Development Company Ltd.
    HKG:0001 CK Hutchison Holdings Ltd
    HKG:0592 Bossini International Holdings Limited
    HKG:0468 Greatview Aseptic Packaging Company Ltd
    Singapore
    SGX:AW9U First Real Estate Investment Trust
    Europe
    AMS:RDSB Royal Dutch Shell Plc Class B
    BME:SAN Banco Santander SA
    AMS:INGA ING Groep NV
    AMS:ABN ABN Amro Bank NV
    AMS:AGN AEGON N.V.
    LU1701701481 Invesco Pan European High Income Fund
    LU0971552673 Allianz Global Investors Fund Sicav - Allianz European Equity Dividend Shs -Am (H2-Usd)- Distribution
    USA
    NYSE:STOR Store Capital Corp
    RQI Cohen & Steers Quality Income Realty Inc
    SRET GLB X FUNDS/SUPERDIVIDEND REIT ETF
    NRZ New Residential Investment Corp
    MPLX MPLX LP
    RLJ RLJ Lodging Trust
    ROOF INDEXIQ ETF TR/IQ U S RL EST SMALL
    CHMI Cherry Hill Mortgage Investment Corp
    NASDAQ:UNIT Uniti Group Inc
    APLE Apple Hospitality REIT Inc
    EPD Enterprise Products Partners L.P.
    GOF Guggenheim Strategic Opportunities Fund
    NMFC New Mountain Finance Corp.
    GSBD Goldman Sachs BDC Inc
    GBDC Golub Capital BDC Inc
    ABBV AbbVie Inc
    MMM 3M Co
    NYSE:BLK BlackRock, Inc.
    PFF iShares S&P US Pref Stock Idx Fnd
    ETV Eaton Vance Tax Managed Buy Write Opport
    SPHD INVESCO EXCHANG/S&P 500 HIGH DIVID

    These are all high-dividend ETFs, which mostly pay monthly dividends, and that I am planning to looking at more closely for future dips
    ETV Eaton Vance Tax Managed Buy Write Opport
    PFFA ETFIS S TR I/VIRTUS INFRACAP U S
    ETO Eaton Vance Tax-Advantaged Global Divide
    ETB Eaton Vance Tax-Managed Buy-Write Income
    FOF Cohen & Steers Clsd-End Optuny Fnd, Inc.
    Alty GLB X FUNDS/SUPERDIVIDEND ALTER
    SRET GLB X FUNDS/SUPERDIVIDEND REIT ETF
    LDP Cohen & Steers Ltd DrtnPrfrrd&IncmFndInc
    Etg Eaton Vance Tax-Advantaged Global Dvd.
    EVT Eaton V.Tax-Advantaged Dividend Inc Fund
    PSF Cohen & Steers Select Pref & Inc Fd, Inc
    UTF Cohen & Steers Infrastructure Fund Inc. Common Stock
    DIAX Nuveen Dow 30SM Dynamic Overwrite Fund
    RFI Cohen & Steers Total Return Real. Fd Inc
    RQI Cohen & Steers Quality Income Realty Inc
    HTD John Hancock Tax-Advantage Dvd Incom Fd.
    RNP Cohen & Steers Rit & Prfd & Incom Fd Inc
    Be careful to not turn diversification into diworsification.

  4. #24

    Join Date
    Mar 2010
    Posts
    5,410
    Quote Originally Posted by foxwendal
    If you’re paying capital gains tax on the stock sale, yes, the approach may not be tax optimal (which I mentioned). But that doesn’t apply for HK. Or are you referring to something else?
    Yes, I was referring to your thought process.
    Why not rob a bank or slaughter a cow to create a homemade dividend ?

  5. #25

    Join Date
    Dec 2002
    Location
    ???
    Posts
    29,228

    @Morrison - You get the code talker of the week award and its only Monday.

    Why wear a bowler hat when you can bowl a maiden over?


  6. #26

    Join Date
    Dec 2009
    Posts
    112
    Quote Originally Posted by Morrison
    Yes, I was referring to your thought process.
    Why not rob a bank or slaughter a cow to create a homemade dividend ?
    I’ve done those too

    if you think it’s complicated, for me the benefit is actually simplicity. I’m indifferent to div yield and don’t skew the portfolio for it. And I only reduce stock by exactly the amount of cash I need. Works for me and not pushing it on anyone lest you get more insecure that you’re doing it wrong.

  7. #27

    Join Date
    Mar 2010
    Posts
    5,410

    I know it's all about simplicity.
    It's so simple you can even stipulate dividend declaration date, record date, and payment date all by yourself.

    Good luck with your investments.


  8. #28

    Join Date
    Oct 2006
    Location
    Hong Kong
    Posts
    13,566
    Quote Originally Posted by foxwendal
    yup

    IWDA / EIMI / AGGU

    Thats 90% of it for me. Remaining 5%-10% is play money for punts.

    I’m early retired and living off investments too. Everyone’s got their own preference and setup on how to meet cash flow, but the following approach has worked for me, if it helps.

    Personally don’t think you need to be too fussed over having a dividend yield sufficient to cover expenses or be too precious about not touching your initial shares either. I sell shares to meet cash flow as and when needed. Effectively, it’s the same net result as receiving a dividend (a “homemade” div, if you will) give or take the fees on div collection vs selling stock since the etf/stock price falls by the same amount of the dividend anyway (though not sure if tax treatment of selling shares vs div collection makes a difference depending where you are)

    All my ETF’s reinvest rather than distribute divs as I prefer having as little cash as possible to be fully invested. I simply stick to a set schedule selling shares few times a year to meet cashflow (selling whichever portion of portfolio needs rebalancing). I also have no issue dipping into using margin facility when rates are as competitive as those in IB for example to cover expenses till my scheduled sell date. I prefer setting the date to sell also to prevent any attempt on my behalf at market timing.

    Not saying this is suitable for everyone. I do think receiving sufficient divs to cover expenses shields us from getting too cute in actively trading the portfolio and is a better option particularly if you’re prone to letting market noise make you overtrade the account. Less activity is probably better for most investors in preventing the usual trappings of human psychology and investing. But just giving another perspective.
    While not retired, that is pretty much what I have also invested the majority of my cash in as well.

  9. #29

    Join Date
    Oct 2018
    Posts
    147
    Quote Originally Posted by foxwendal
    yup

    IWDA / EIMI / AGGU

    Thats 90% of it for me. Remaining 5%-10% is play money for punts.

    I’m early retired and living off investments too. Everyone’s got their own preference and setup on how to meet cash flow, but the following approach has worked for me, if it helps.

    Personally don’t think you need to be too fussed over having a dividend yield sufficient to cover expenses or be too precious about not touching your initial shares either. I sell shares to meet cash flow as and when needed. Effectively, it’s the same net result as receiving a dividend (a “homemade” div, if you will) give or take the fees on div collection vs selling stock since the etf/stock price falls by the same amount of the dividend anyway (though not sure if tax treatment of selling shares vs div collection makes a difference depending where you are)

    All my ETF’s reinvest rather than distribute divs as I prefer having as little cash as possible to be fully invested. I simply stick to a set schedule selling shares few times a year to meet cashflow (selling whichever portion of portfolio needs rebalancing). I also have no issue dipping into using margin facility when rates are as competitive as those in IB for example to cover expenses till my scheduled sell date. I prefer setting the date to sell also to prevent any attempt on my behalf at market timing.

    Not saying this is suitable for everyone. I do think receiving sufficient divs to cover expenses shields us from getting too cute in actively trading the portfolio and is a better option particularly if you’re prone to letting market noise make you overtrade the account. Less activity is probably better for most investors in preventing the usual trappings of human psychology and investing. But just giving another perspective.
    One thing that I am worried about if I use your approach is: what happens if the share market crashes? Say, it crashes by 40% next year (very possible if you hear some people, very unlikely if you hear others). You will be forced to sell a larger number of shares to keep your income stable.

    If share prices stay low for another 5 to 10 years (worst case scenario, but possible in my opinion, look at what happened to Japan, look at present day debt and interest rates, even though we borrow more and more, the economy isn't growing. We are in 1929 all over again), after 10 years you will have sold all your shares? My reasoning is that if I only use the dividends, after 10 years I will still have the number of shares I had in 2020. Though of course companies may cut dividends quite substantially if there is a prolonged crisis, so I will be forced to sell shares too.

    I have no idea if my concern/approach is correct, so I welcome comments.

  10. #30

    Join Date
    Dec 2009
    Posts
    112

    Others will prob disagree and I’m open to hearing those views but I see the dividends as a false sense of security in your crash example. The problems you mentioned would not be much different with div stocks. Again, since stock positions fall by the same amount as your divs paid, a dividend is essentially a “forced sale” of stock anyway. You’re effectively doing the same thing by a different name whether its a normal dividend or a self generated sale of stock. Except for the latter, you choose exactly the cash amount to be deducted instead of just taking what the company chooses to pay. And you don’t have to be biased towards overweighting div paying companies/sectors for the portfolio.

    shri and john_1122 like this.

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