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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. #11

    Join Date
    Oct 2018
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    Thank you all for your comments.

    I don't have a particular strategy, I just look for companies that the internets say are cheap, the price is not expected to drop much in the coming recession, and whose dividends are safe for the next few years. I avoid telecom and such (like AT&T), and prefer REITS (41% of my portfolio) and financials (15% of my portfolio). By diversifying I hope to reduce risk.
    @shri the reason I chose US ETFs is that I can't find very attractive UK ETFs. Take DXSB for example, even though the dividend is 1% higher than SPHD, over the last 5 years the price has gone up by 14% for DXSB, while 31% for SPHD. Any UCITS with a decent dividend and price growth you can point me to?

    @bdv and @traineeinvestor yes, it's true maybe I am overdiversified, but I see this as a way to reduce risk. With companies you never know what can happen. Take NAB.AX (which I own) recommended buy, but down 16% since September. ABN.AS (also recommended buy) down 43% this year. You just need the US government to declare that the bank is under investigation for money laundering, and the price will drop by 20%. The funny thing is that while there are plenty of banks with over 5% yield, I can't find a financial ETF with with yield above 5%. I think half the dividend paid by banks goes in costs to run the ETF, or disappears somewhere? I guess I am trying to create my own etf in the REITs sector, and in the financial sector. But it's true that the bank fees accumulate and reduce profits.

    I actually prefer monthly payments, because I plan to use this as a salary, but it's true that bank charges will accumulate. Thank you for pointing this out.

    Any additional comment and advise is obviously very welcome.


  2. #12

    Join Date
    Dec 2009
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    311

    past performance says nothing about future returns. personally believe you can ignore all the professional buy and sell recommendations too. just a way for banks to stir up trading activity and churn fees. if they had true insight, they’d simply trade the position for profit and certainly not telling the world of it and crowding out the trade for themselves.


  3. #13

    Join Date
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    Quote Originally Posted by bdw:
    Im sorry to hear that. But don't worry, we all make mistakes. I sold 1810 Xiaomi shares on Monday after holding them for a year waiting for them to rise but nothing happened. Then the bastards announced a new 5G phone yesterday and their shared rocketed over 8% in one day. I'm so pissed. Still I made profit, bought for $200k and sold for $210k, but if I had waited 2 days longer (after already waiting for a year) I could have made an extra $16k profit. Bastards!
    Cool! I still have mine.

  4. #14

    Join Date
    Feb 2009
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    Quote Originally Posted by HK_Katherine:
    Cool! I still have mine.
    Bloody hell up another 4% today! Damn.

  5. #15

    Join Date
    Oct 2018
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    Quote Originally Posted by foxwendal:
    past performance says nothing about future returns. personally believe you can ignore all the professional buy and sell recommendations too. just a way for banks to stir up trading activity and churn fees. if they had true insight, they’d simply trade the position for profit and certainly not telling the world of it and crowding out the trade for themselves.
    So if you don't look at past performance and at recommendations what do you do? Just buy the index (e.g. SPY)? Although that would have been a good strategy over the last 10 years.
    GentleGeorge likes this.

  6. #16

    Join Date
    Jan 2010
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    6,452
    Quote Originally Posted by john_1122:
    So if you don't look at past performance and at recommendations what do you do? Just buy the index (e.g. SPY)? Although that would have been a good strategy over the last 10 years.
    Yes, just buy something like SPY+TLT

  7. #17

    Join Date
    Feb 2019
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    3,240

    If you want an EUR cash-stream, these people will sell you EUR corporate bonds in clips of EUR 100 upwards. Yields from 2.5% upwards (some credit risk from the issuers of course) which beats EUR bank rates by some distance! And you can diversify across issuers due to the smaller size than typically available for corporate bonds.

    https://www.wisealpha.com/?ref=JqYLg0mx6bKREyV


  8. #18

    Join Date
    Dec 2009
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    311
    Quote Originally Posted by john_1122:
    So if you don't look at past performance and at recommendations what do you do? Just buy the index (e.g. SPY)? Although that would have been a good strategy over the last 10 years.
    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.
    Last edited by foxwendal; 15-12-2019 at 07:32 PM.
    TheBrit, shri, pin and 1 others like this.

  9. #19

    Join Date
    Dec 2009
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    Not to be pedantic but I may have glossed over the dividend point. Main thing I wanted to point out was that having a scheduled selling of stock to meet cashflow needs can be seen as a "homemade dividend" customized precisely to your spending. And on the flipside, a different way to see normal dividend distributions is that they are actually a "forced sale" of stock (since you are reducing stock position for cash). Seen in that way, maybe some would give less necessity in having a particular dividend yield on the shares which may skew the portfolio to certain sectors if you are OK to simply replicate the exposure manually. Or maybe not. Again, sorry if this is pedantic.

    Last edited by foxwendal; 15-12-2019 at 10:25 PM.

  10. #20

    Join Date
    Mar 2010
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    6,745

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