Percentage of investment in stocks [Archive]

LAC

17-05-2016, 03:23 PM

Do you include your house and if so how do you value it?

Good question:) I had a good discussion at the pub with someone a few days ago regarding this.
I use the CV and nothing else (CV - current mortgage owing = property % of my total portfolio).
I know this would be a LOT less in today's property market but I just cant take the current market value of properties as % of my portfolio, it's just tooooo out of sync for my PERSONAL liking.

fungus pudding

17-05-2016, 03:35 PM

Good question:) I had a good discussion at the pub with someone a few days ago regarding this.
I use the CV and nothing else (CV - current mortgage owing = property % of my total portfolio).
I know this would be a LOT less in today's property market but I just cant take the current market value of properties as % of my portfolio, it's just tooooo out of sync for my PERSONAL liking.

Neither you should include the value. You're saying only the equity in your property should be included and I agree. In which case shouldn't only the equity in your investments be included also? IOW what is the percentage value of each asset of your total equity?

peat

17-05-2016, 03:37 PM

I have about 46% in shares with about a third of that in funds

I have 50% cash or equiv.

I have 4% in silver

I would have more shares but despite (or due to) the buoyancy in the markets there is insufficient value and besides that I need a lot of liquidity for various personal reasons.

Do you include your house and if so how do you value it?
Your house that you live in isn't an investment so I say no.

kiora

17-05-2016, 04:10 PM

18% Listed Shares
32% Managed Funds
34% Property not including residential(My view,my house isn't an investment)
6% Private Equity Investments
10% Undrawn credit line secured over the property

fungus pudding

17-05-2016, 04:19 PM

18% Listed Shares
32% Managed Funds
34% Property not including residential(My view,my house isn't an investment)**
6% Private Equity Investments
10% Undrawn credit line secured over the property

**Your undrawn credit isn't an investment either.

PJK

17-05-2016, 04:23 PM

At this moment its more about the protecting capital and beating inflation for me ...

45% Cash Pie
22% Funds (about 50/50 shares / bonds)
11% Property (owner occupied)
7% TDs PIE
5% Direct Bonds
5% Direct Shares
5% Direct Bullion

Am earning well so NOT needing it to out-perform / make a fortune.

In4a$

17-05-2016, 04:48 PM

70% stock, 10% cash, 20% funds. I do not invest in residental property as a moral issue.

I am with you silu.
However I do invest in property stocks. GMT,KPG,STR,VHP ( my house is not included, it's an investment but I keep it separate)
50% shares, 30% funds, 20% cash ( cash includes Bonus Bonds)

Bjauck

17-05-2016, 08:03 PM

I am with you silu.
However I do invest in property stocks. GMT,KPG,STR,VHP ( my house is not included, it's an investment but I keep it separate)
50% shares, 30% funds, 20% cash ( cash includes Bonus Bonds)

Surely the equity in your house is an investment as every bit relevant as all others, as you derive value from it in the form of accommodation. Just because it is exempt from the current income tax system* does not make it any less of an investment. If you did not own your own home then you would have to pay rent (out of taxed income) for your accommodation. Any analysis of an investment portfolio is somewhat deficient if it does not include the equity in your home especially if you wish to compare home-owners portfolio sector exposure with that of non-home owners.

*although property is still subject to annual rates charges

kiora

17-05-2016, 08:16 PM

**Your undrawn credit isn't an investment either.

The undrawn credit is secured over the residential property so allows me the use of the residential asset(not included in the list of assets) without selling it.This covers monthly expenses and I can also use it when investment opportunities come along that I figure will give me a greater than the 5% interest cost it incurs.So I have included it in list of "assets" :)Its better that money in the bank in my view :)

JBmurc

17-05-2016, 11:52 PM

70-80% property
the rest ASX shares / bullion round 20% of my sharemarket portfolio value

Lewylewylewy

18-05-2016, 07:43 AM

May I ask, which broker did you use to invest in bullion? Seems like the internet it's full of scammers in this sector.

JBmurc

18-05-2016, 09:54 AM

May I ask, which broker did you use to invest in bullion? Seems like the internet it's full of scammers in this sector.

I handle buying storing the bullion myself ... as my bullion holding is a long term holding (bit like a term deposit) I don't need it to be tradable ...one could buy the likes of ETPMAG.asx or GOLD.asx or GDX.nyse (major gold producers)

just look at the performance of GDX- http://finance.yahoo.com/echarts?s=GDX#{"allowChartStacking":true}

Harvey Specter

18-05-2016, 10:35 AM

The undrawn credit is secured over the residential property so allows me the use of the residential asset(not included in the list of assets) without selling it.This covers monthly expenses and I can also use it when investment opportunities come along that I figure will give me a greater than the 5% interest cost it incurs.So I have included it in list of "assets" :)Its better that money in the bank in my view :)Why are you talking about the 'undrawn credit facility' - it is neither an asset or a liability. You should be counting the 'draw credit' as a negative asset!

Lewylewylewy

18-05-2016, 12:00 PM

I use my revolving credit mortgage as a place to store cash. I consider this cash.

I also consider the house I live in an investment, as I don't plan to live here forever and it's way to big for me.

kiora

18-05-2016, 12:29 PM

Why are you talking about the 'undrawn credit facility' - it is neither an asset or a liability. You should be counting the 'draw credit' as a negative asset!

Because the undrawn credit facility is the working capital of my investment "business".On the one hand most may consider it as a negative asset but it is the realizable part of my residential house asset that can be used for investment purposes.It allows better allocation of assets than having cash in the bank in my view.

Lewylewylewy

18-05-2016, 02:19 PM

I handle buying storing the bullion myself ... as my bullion holding is a long term holding (bit like a term deposit) I don't need it to be tradable ...one could buy the likes of ETPMAG.asx or GOLD.asx or GDX.nyse (major gold producers)

just look at the performance of GDX- http://finance.yahoo.com/echarts?s=GDX#{"allowChartStacking":true}

I'm imagining your house is full of gold bars all hidden in the walls and under floor boards, like some sort of off-the-grid, post apocalyptic hoarder ha-ha :)

Lewylewylewy

18-05-2016, 11:57 PM

So I've decided sell all my properties and put 50% of my wealth into bitcoin and the rest into IQE.

kiora

19-05-2016, 04:03 AM

Way to go LLL. You,ve obviously learn,t a lot here :eek2:
Are you going to enroll in IQE class as well while living in Kazakstan?

In4a$

19-05-2016, 09:24 AM

Surely the equity in your house is an investment as every bit relevant as all others, as you derive value from it in the form of accommodation. Just because it is exempt from the current income tax system* does not make it any less of an investment. If you did not own your own home then you would have to pay rent (out of taxed income) for your accommodation. Any analysis of an investment portfolio is somewhat deficient if it does not include the equity in your home especially if you wish to compare home-owners portfolio sector exposure with that of non-home owners.
*although property is still subject to annual rates charges

I agree, my property has been a very good investment. Being in Auckland the value has been rising faster than any other investment. I have been lucky and owned a free hold home since my late 20's ( 3 different ones ) although I have borrowed against them at times. ( left school at 16, started as farm worker, never inherited or gifted any money, lost half in a divorce in 1990 but done ok )
I don't "Play" with the investment in my home, unlike shares and cash which I manipulate, change and take risks with from time to time with the goal of increased financial gain. So for the purposes of this post I excluded the value of my property and disclose the percentages of what I actively invest with. Also did not include Kiwi saver and superannuation funds or my partners investments or cash as those are hers not mine, nor did I include any toys, vehicles, livestock or other assets.

I have owned rental property but sold and now take the moral stance that older homes should be left for first home buyers.
I have written to govt, and suggested in person to prime minister that property investors should be made to build new flats or houses not assisted in buying up the older ones. Would create more housing and help solve the housing crisis.
I agree with you and encourage all young people to buy their home and get away from the rent trap.

fungus pudding

19-05-2016, 10:41 AM

I agree, my property has been a very good investment. Being in Auckland the value has been rising faster than any other investment. I have been lucky and owned a free hold home since my late 20's ( 3 different ones ) although I have borrowed against them at times.
But I don't "Play" with the investment in my home, unlike shares and cash which I manipulate, change and take risks with from time to time with the goal of increased financial gain. So for the purposes of this post I excluded the value of my property and disclose the percentages of what I actively invest with. Also did not include Kiwi saver and superannuation funds or my partners investments or cash as those are hers not mine, nor did I include any vehicles, livestock or other assets.

I have owned rental property but sold and now take the moral stance that older homes should be left for first home buyers.
I have written to and suggested in person to John Key that property investors should be made to build new flats or houses not buy up the older ones. Would create more housing and help solve the housing crisis.
I agree with you and encourage all young people to buy their home and get away from the rent trap.

Why do you think requiring investors to build new would help the housing shortage? There's no shortage of home owners prepared to build - the shortage is land, not building materials. Having investors competing for every vacant lot with owner occupiers could prove disastrous. e.g. whole subdivisions of cheaply constructed rental units full of tenants does not generally make a desirable living environment.

Bjauck

19-05-2016, 10:58 AM

I agree, my property has been a very good investment. Being in Auckland the value has been rising faster than any other investment. I have been lucky and owned a free hold home since my late 20's ( 3 different ones ) although I have borrowed against them at times.
But I don't "Play" with the investment in my home, unlike shares and cash which I manipulate, change and take risks with from time to time with the goal of increased financial gain. So for the purposes of this post I excluded the value of my property and disclose the percentages of what I actively invest with. Also did not include Kiwi saver and superannuation funds or my partners investments or cash as those are hers not mine, nor did I include any vehicles, livestock or other assets.

I have owned rental property but sold and now take the moral stance that older homes should be left for first home buyers.
I have written to and suggested in person to John Key that property investors should be made to build new flats or houses not buy up the older ones. Would create more housing and help solve the housing crisis.
I agree with you and encourage all young people to buy their home and get away from the rent trap. It sounds like you have traded with the investment in your home three times - it is just that you perhaps trade less often than with your other investments. I think super funds and homes should be included in an investment portfolio assessment.

I think I have read somewhere that a home is owned for about 4 years on average. What about long-term term deposits and bonds with 5 year and 7 year terms, where there is no intent to sell? Also I have held over half of my shareholdings for longer than that; some for a lot longer but still do not think that should warrant their exclusion.

I think the depreciated value of assets, vehicles and livestock should be included if they are part of a business, along with assessed goodwill in a business.

In4a$

19-05-2016, 11:17 AM

Why do you think requiring investors to build new would help the housing shortage? There's no shortage of home owners prepared to build - the shortage is land, not building materials. Having investors competing for every vacant lot with owner occupiers could prove disastrous. e.g. whole subdivisions of cheaply constructed rental units full of tenants does not generally make a desirable living environment.
The way I see it is in South Auckland nearly 40% of house sales are to investors, some with 10 or more rentals using those as leverage to buy more. They have a distinct investment advantage over the young families starting from scratch. I and my children and most people I know started with an older home as their first. You build equity in that then move up to newer. But I see many young families at auctions being out bided by investors. Now if investors only got tax breaks buy building new, we would have more houses built, the new ones would be more insulated etc, better for rentals, in South Auckland many of the rentals are paid or subsidised by the Govt anyway, ( a co-worker has 4 rentals, with rent paid by WINZ ). Now they are talking of capping mortgages to 4.5 times income, that will just take out the first home buyers and leave an even bigger market for investors. IMHO

What would happen to houses prices if 40% of buyers ( Investors ) were removed from the 2nd hand market. ?
Plenty of controls can be and are put in place regarding build quality, and some subdivisions I believe already have to have mixed housing as part of the plan.

fungus pudding

19-05-2016, 11:28 AM

The way I see it is in South Auckland nearly 40% of house sales are to investors, some with 10 or more rentals using those as leverage to buy more. They have a distinct investment advantage over the young families starting from scratch. I and my children and most people I know started with an older home as their first. You build equity in that then move up to newer. But I see many young families at auctions being out bided by investors. Now if investors only got tax breaks buy building new, we would have more houses built, the new ones would be more insulated etc, better for rentals, in South Auckland many of the rentals are paid or subsidised by the Govt anyway, ( a co-worker has 4 rentals, with rent paid by WINZ ). Now they are talking of capping mortgages to 4.5 times income, that will just take out the first home buyers and leave an even bigger market for investors. IMHO
What would happen to houses prices if 40% of buyers ( Investors ) were removed from the 2nd hand market. ?

It makes no difference who build the house. It's still another house. The point is appropriately zoned land is short and it would be a pity seeing investors snap it up because they had no other choice. That's not the way to build a desirable city. Whenever an owner occupier builds it creates a vacant property anyway.

In4a$

19-05-2016, 12:04 PM

It makes no difference who build the house. It's still another house. The point is appropriately zoned land is short and it would be a pity seeing investors snap it up because they had no other choice. That's not the way to build a desirable city. Whenever an owner occupier builds it creates a vacant property anyway.
That's the issue. When an owner occupier builds new, his old one gets snapped up by investors not first home owners.
Both labour and national are going to force Akld city to free up more land, if they don't do it so land is not the issue. There is already some good ( a bit cramped ) housing being built for sale and rent in Sth Akld, there just needs to be more. I don't see why it would make a City undesirable ? about 30% of Auckland is rentals anyway, and long term it would/could put more families into their own homes, reducing the need for rentals.

Just annoys me at work, at the lunch table 2 co-workers ( 50's) own 9 rental houses between them,( no shares or other investments ) and 5 young ( 30ish) co-workers cant afford to buy their families first home.
What do you reckon we should do to get those 5 families into an affordable home Fungus pudding ?

In4a$

19-05-2016, 01:11 PM

It sounds like you have traded with the investment in your home three times - it is just that you perhaps trade less often than with your other investments. I think super funds and homes should be included in an investment portfolio assessment.

I think I have read somewhere that a home is owned for about 4 years on average. What about long-term term deposits and bonds with 5 year and 7 year terms, where there is no intent to sell? Also I have held over half of my shareholdings for longer than that; some for a lot longer but still do not think that should warrant their exclusion.

I think the depreciated value of assets, vehicles and livestock should be included if they are part of a business, along with assessed goodwill in a business.

You are right Bjauck, but because I have friends and acquaintances who read my posts, ( ones looking over my shoulder now) I am reluctant to include my property percentage, except to say I am heading towards an uncle of mines statement that you cant go wrong if you personally invest 1/3 property 1/3 stocks 1/3 funds or cash. Business is another matter.

HRM

29-05-2016, 08:33 PM

Current portfolio

20% shares
23% cash
26% Equity in home
5% fixed interest
2% bullion
1.5% forestry
21% pension (shares)

Waiting for an opputunity for a sale on shares

GTM 3442

30-05-2016, 08:10 PM

Current portfolio

20% shares
23% cash
26% Equity in home
5% fixed interest
2% bullion
1.5% forestry
21% pension (shares)

Waiting for an opputunity for a sale on shares

So, you have:

40% shares
25% cash
25% home
5% Fixed Interest
5% alternatives

Two questions. The first one really matters:

How old are you?

What will you do with the money from selling your shares?