Maximum Net Yield from a diversified portfolio of NZ Stocks.

[Beagle]

If your task was to invest $100K for an elderly person aged 88 and the sole purpose of the investment was to generate the maximum net yield in a reasonably diversified portfolio of N.Z. stocks what would you do ?

My initial thoughts in no particular order and indicative yield based on current SP's noted are
Spark $3.41 7.3%
HLG $3.36 9.0%
AIR $2.375 8.5%
THL $3.80 5.0%
PGW $0.54 6.8%
HBL $1.64 5.2%
GEN $$2.065 7.9%

Average net yield 7.1%

Assume for the sake of this exercise that the elderly person already has some REIT's (Kiwi, Goodman and Argosey).

What would you do ? ( For the sake of this exercise pretend its your own elderly mother you are investing this for)

[iceman]

I have recently invested half that amount for an elderly person with main focus being on dividend stream. I selected:
THL (25%)
PGW (15%)
AIR. (15%)
HLG (25%)
SPK (20%)

[Beagle]

I have recently invested half that amount for an elderly person with main focus being on dividend stream. I selected:
THL (25%)
PGW (15%)
AIR. (15%)
HLG (25%)
SPK (20%)

Thanks mate...always a good thing to check others idea's especially when you're investing other people's money. Good to see we're thinking along similar lines.

[percy]

If your task was to invest $100K for an elderly person aged 88 and the sole purpose of the investment was to generate the maximum net yield in a reasonably diversified portfolio of N.Z. stocks what would you do ?

My initial thoughts in no particular order are
Spark 7.3%
HLG 9%
AIR 8.5%
THL 5%
PGW 6.8%
HBL 5.2%
GEN 7.9%

Average net yield 7.1%

Assume for the sake of this exercise that the elderly person already has some REIT's (Kiwi, Goodman and Argosey).

What would you do ? ( For the sake of this exercise pretend its your own elderly mother you are investing this for)

Looks excellent to me.
Would you please add current share prices so we can track the portfolio.

[Beagle]

Looks excellent to me.
Would you please add current share prices so we can track the portfolio.

Thanks for your feedback Percy, amended post as suggested

My mind is very open to others thoughts folks so please...I am all ears, (hounds have large ears lol) and more than happy to split this 10 ways at $10K per investment if there's another 3 good idea's.
Main thing is I don't want my personal bias towards some of these to shine through so I'm looking for an almost exactly equal split in terms of allocating capital between shares.

I suppose I am open to more diversification, (just thinking out loud here) and even though there is an argument that something like Barramundi which invests in Australian shares and pays a guaranteed 8%, sometimes out of capital...that's probably okay as Mum won't live forever so if there's some capital erosion in a stock like that I'll more than likely make it up in stocks like HBL and THL so I'm probably okay with BRM as it provides some international diversification. Does Fisher funds Marlin fund also pay 8% ?, that would give her some international exposure outside of Australia so I am seen to be doing the prudent thing getting even more diversification. (Fiduciary obligation of upmost good care is VERY strong when you're investing your own mothers money that's for sure !).

Maybe I should also throw a really high growth solid company in there on the basis that growth could be used to derive a return ?
I'm thinking maybe my highest conviction growth stock SUM would be a good choice and I could sell 10% of the stock per year as it grows to give Mum a return out of it that way...perhaps that's not a silly strategy seeing as its average growth rate for the last 5 years has been a whopping 48%. Makes sense ?

[iceman]

Agree Roger one has to be careful and try to avoid excessive bias or preference when investing, particularly when investing other people's money.
I selected a higher percentage of THL, despite lower currrent yield, because of my expected large increase in their dividend in the next few years. So obviously my bias/preference influenced it ! But I also think the person came to me because they wanted my bias/preferences/advice. So a bit of a predicament isn't it !

[percy]

I help out on my late friend's family trust.
I have found the trust's performance has greatly improved, since we have been following my bias and preferences.!!..lol.
Now my view is, I think I would trust both of you to invest wisely, on someone else's behalf.
So back yourselves.

[Beagle]

Agree Roger one has to be careful and try to avoid excessive bias or preference when investing, particularly when investing other people's money.
I selected a higher percentage of THL, despite lower currrent yield, because of my expected large increase in their dividend in the next few years. So obviously my bias/preference influenced it ! But I also think the person came to me because they wanted my bias/preferences/advice. So a bit of a predicament isn't it !

Yes absolutely it is mate, quite a conundrum but your circumstances in terms of your brief is no doubt a little different to mine in that this represents quite a significant proportion of my Mum's capital, other than her retirement unit. Whatever I do I have to be able to put my hand on my heart and say I did a very good job of diversification...so I suppose just thinking out loud as I type, (which is always dangerous lol), I have to have some international and Australian investment that gives a decent yield so Barramundi and Marlin look like a good idea and I also have to justify the decision making to my brothers when Mum eventually dies so I probably have to show I invested in at least one high growth share like SUM but also in other growth shares like THL, HBL so I think maybe the seven I mentioned above plus Barramundi, Marlin and SUM, $10K each.

Still open to other idea's folks.

[RTM]

I think you have about the right number of stocks for a 100 k investment. Personally I wouldn't invest in HLG as I think we still have big changes to come in that area in NZ with respect to more on-line shopping, other competition. You could add FSF instead of HLG to further access NZ's major industry...agriculture.

And of course I have been wrong with respect to HLG for years.

[Beagle]

I think you have about the right number of stocks for a 100 k investment. Personally I wouldn't invest in HLG as I think we still have big changes to come in that area in NZ with respect to more on-line shopping, other competition. You could add FSF instead of HLG to further access NZ's major industry...agriculture.

And of course I have been wring with respect to HLG for years!

Thank you, FSF 6.5% net yield, excellent idea...My Mum comes from a farming background originally, I think she would approve