Originally Posted by
traineeinvestor
I'll throw a few observations out there.
As a retiree, I want an income stream from my investments which (i) is enough for my daily needs (ii) provides a buffer for contingencies (iii) will grow over time to at least offset inflation and (iv) comes from sufficiently diverse streams to provide protection against individual assets (or even whole sectors of the investment universe) being impacted by adverse events.
I'm fully aware that chasing yield has often (not always) either been a bad strategy or has produced results which result in quality growth companies being overlooked. I don't insist on high yields from the time of investment but I like most (not necessarily all) of my investments to produce at least some income in the near future.
As an expat living in Hong Kong my tax position is different from what it would be if I became NZ resident again.
As far as NZX listed equities are concerned, my view is that the four best companies in terms of shareholder returns/blue chip status are AIA, EBO, MFT and POT. The issue with all of these is that every time I've looked at them, they have either been fully priced, expensive or very expensive and I am, at heart, a cheapskate which is why I've only got a small allocation to three of them (to my detriment I will acknowledge).
Also, I've been around long enough to know that history is littered with companies that were superb investments for many years (in some cases decades) before faltering. Companies like BIL in New Zealand, IEL and FAI in Australia produced stellar compound returns over (maybe) a couple of decades before going to zero (or close enough as makes little difference for present purposes). This leads to the question of sustainability – or a defensive moat as Buffett/Munger would describe it. Of the four NZ companies I mentioned above, EBO and MFT operate in industries where they are subject to meaningful competition both domestically and internationally. They've done a superb job of delivering for shareholders but neither can be said to have a truly robust defensive moat. In contrast, both AIA and POT have high degrees of protection from competition but they are (IMHO) dreadfully expensive. I'm not keen at current prices.
This is not to say there are not other companies in NZ which I am happy to invest in (SKL is my biggest NZ holding) but if I had to shut my eyes and put all my retirement savings into one single stock in the bottom drawer and forget about it for a very long time, I'd be looking at either POT or AIA. As a side note, I've a small hope that if the sell down of AIA shares goes ahead it will result in some weakness in the share price.
Needless to say, this is not something I would do in practice. If I had to look up my money for a very long period of time, it would be low cost index funds.