Hi. Having gotten serious about saving in recent years, I'm now looking to start accumulating some stocks. I'm just south of 40, and this is my retirement / unforeseen disaster fund, so we're (hopefully) talking very long term here. I have around 120k at the moment, to which I'm currently adding 30k+ a year.
The stocks I've got my eye on at the moment are TEL, RYM, IFT, POT, and maybe TTK, SKC, CNU. As a non-resident, I won't benefit from imputation credits, but only pay 15% non-resident withholding tax on dividends (and no tax in Japan), making growth and no/low-imp stocks attractive.
However, looking at market trends, I get the impression that now is the wrong point in the cycle to be entering the market. I wonder if I'd be better off sitting on the sidelines for the next 12, 18 or however many months it takes for things to play out, then doing a little bargain shopping in the next accumulation phase. Once I buy, I'm generally looking to hold for a long time (Yes, I'm currently reading Benjamin Graham).
Are my assumptions reasonable? And, if keeping my powder dry is the best short-med. term strategy, any suggestions on where to park my money? Any thoughts / advice would be appreciated.
Advice for a market débutant
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06-07-2012, 05:29 PMFudo_MyouAdvice for a market débutant
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06-07-2012, 05:35 PMCJAs a non resident, you will receive a supplimentary dividend with each dividend which effectively eliminates you NRWT cost.Quote:
Originally Posted by Fudo_Myou
As a person living in Japan, why do you want to invest in NZ. I assume this is your planned retirement location? -
06-07-2012, 05:47 PMFudo_MyouAh, so that's what 'supp.' means on the dividends. I had been wondering. ;)Quote:
As a non resident, you will receive a supplimentary dividend with each dividend which effectively eliminates you NRWT cost.
As for why NZ, that's trickier. No, I probably won't retire there. But I have bank accounts there, interest rates have been much better, I visit yearly, pay closer attention to the economy, etc., so it seemed to make sense. I don't keep money in Japan because interest rates are zero and one day (who knows when, but one day) that mountain of debt is going to come crashing down. Would Australia be a better bet for someone in my position? Or American stocks through something like E-trade (Singapore)? -
06-07-2012, 06:37 PMpercy
Your choice of NZ stocks is excellent.Maybe add a power company,and an Aussie Bank.
Choice of country I can't help. -
06-07-2012, 06:54 PMCJ
I probalbly would choose Australia or US but then I would also go with what you know an if that is NZ, stay with that. Choice of stocks looks nice and safe with a reasonable yeild and chance of capital gain.
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06-07-2012, 07:21 PMelZorro
Fudo, here is one chart you should also look at. I've been trying to make a profit on shares since 2004, and apart from a brief positive spell, I've found it tough going. It would have been far easier to buy some gold bars. You'll need to decide if the Dow/gold ratio is really on its way back up, or could drop down to near one, before buying any shares. I have been supporting gold explorers, and by that I mean it hasn't worked too well either, yet. They all burn through a lot of cash from shareholders, and only a few make it big. You'll need to be nimble and uncaring with your shares in the interim. If you do get a profit appearing, think hard about taking it. Don't watch it drift down again. And that is all I've learnt so far. All the best.
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11-07-2012, 01:38 AMFudo_Myou
Ok, thanks to all for your comments, they've given me a few things to think about - nice to get some perspectives other than the voices in my head. :blink:
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11-07-2012, 10:23 AMBIRMANBOY
So El Zorro you have been trying to make a profit since 2004 and apart from "brief positive spell" its "been tough going" And you are offering advice to someone new to investing. You should be ashamed of yourself. Perhaps your lack of success has got something to do with your suggestion of utilizing Dow -gold ratio? Perhaps its because you choose things that promise big rewards and never quite deliver? Fudo says he is in it for the long haul so why suggest "You'll need to be nimble and uncaring with your shares in the interim. If you do get a profit appearing, think hard about taking it. Don't watch it drift down again."
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Originally Posted by elZorro
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11-07-2012, 10:36 AMBIRMANBOY
Your stock selections look very reasonable. The only thing I would add is that in my opinion rather than waiting for the "best time" to buy you might consider buying on the periodic dips that most stocks go through. If you have access to a 5 year chart facility you may see a stock that has experienced 3 or 4 or more swings or dips over the 5 years. if you look to add holdings in the dips you have the benefit of averaging out your occasional "high" buy. For example with TTK every now and then it dips down to 2.30 or so so I buy. But it generally trades higher. This also has returned a good dividend (so far). Having some cash to buy when "good" opportunities arrive is good but its impossible for most people to know when or if the "good " time has arrived. I believe steady and continual accumulation across a broad selection will serve the conservative, long term investor well.
Quote:
Originally Posted by Fudo_Myou
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11-07-2012, 10:37 PMelZorroBirmanboy, maybe you're right. Perhaps you're the hotshot and I'm not. I'm not ashamed of the effort I've put in to understand the markets. I have found it far easier to make a dollar in business, luckily. And despite your decrying my opinion on the dow-gold ratio, it spells out why buying shares in the last few years has been a big punt compared with the period before 1987, for example. I'll get back to breakeven sometime, and then I'll see if I'm still interested in shares.Quote:
Originally Posted by BIRMANBOY
And I am trying to help Fudo out. He/she might have saved very hard to get that cash together, and I'm saying there are no sure bets at the moment. Share investing, even for the long haul, carries risks not seen in a savings account. If the dow-gold ratio starts properly going the other way, it'll be easier then.
This result from a team of experts in long-term share investments. -
12-07-2012, 03:11 AMFudo_MyouYes, that's exactly why I'm holding off for the time being. The NZX does not appear to be in one of those periodic dips at the moment, although it's hard to tell. But of greater concern is the larger picture - at present we're 3yrs+ into a bull market (beginning about April 2009) - just as the Dow and S&P500 are - and bull markets have an infuriating habit of coming to an unseemly end. There seems no shortage of possible events that could trigger a more serious cyclical correction: Europocalypse or just a Spanish/Italian default, a Brazilian or Chinese credit crunch, another b****er scandal/collapse etc. Maybe I'm overly pessimistic, but I think I'll just enter relatively lightly for now (but pretty much in the way you suggest). Nonetheless, it's hard to see a company like RYM being anything but a very good bet in the long-term.Quote:
Originally Posted by BIRMANBOY
EDIT: what's up with the hash tags? So I wrote 'banker' with a superfluous 'w', it doesn't make me a bad person! :p -
12-07-2012, 08:04 AMpercy
Very difficult buying at exactly the right time.I usually try to buy after the Dow has had a bad day.
Earnings and dividend growth are the driving forces that will propell your porfolio.So selection is very important.Your selection is excellent. Should markets drop your selection of companies will rebound very quickly as they have strong earnings and balance sheets.
So I think selection for a long term portfolio is most probably more important than timing.You should not have to sell any of your shares.
You will only need to sell a share if it does something different from the reason you brought it. -
12-07-2012, 09:53 AMBIRMANBOY
I"m not saying look for dips in the overall market...I'm saying look for dips in individual companies share prices. If you see for example that a hypothetical share for company X seems to swing between $2 and $3 and has done so on a number of occasions over the last several years then it would be reasonable to expect it to do the same thing (bar any unusual situations). So you could have a number of companies on your watch list and buy as and when one of them goes into a "low" phase. Just because the markets are "down" or "up" doesnt mean there aren't good buys in individual stocks. Obviously if there has been no "up" movement at all in a stock then that would mean stay away until some obvious upward change has happened and solidified over time. RYM is not for me because I look for dividends and its not that good for dividends but yes for long term growth it should be reliable.
Quote:
Originally Posted by Fudo_Myou
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12-07-2012, 10:33 AMCJLikewise look for peaks for selling. I head butt my desk everytime I look at FBU and remember when it hit over $9.30. As it started to slide I should have known the good times were over and could pick it up when it dipped again.Quote:
Originally Posted by BIRMANBOY
I need to get smarter than my buy and hold strategy. -
12-07-2012, 03:57 PMBIRMANBOY
AH yes, the clarity that hindsight can give is remarkable. Myou-san says he is looking for a long term hold policy however in his original statement. Is it smarter or luckier you want. Cementing in gains is the dilemma we probably wish we faced more frequently. My guess is we dwell on "should haves" or "could haves" ...since no-one likes to think they let a hefty profit slip through the fingers. I've lost track of the money I've "lost" on Telecom ebbs and flows. However I console myself with the thought that I dont have to pay the IRD their share of my gains, since their anal-retentive officers might argue by buying and selling and then buying back in looks suspiciously like trading as opposed to investing. Buying and holding is as boring as s**t and as sexy as thermal underwear, but is the cornerstone policy of the long term investor.
CJQUOTE=CJ;377185]Likewise look for peaks for selling. I head butt my desk everytime I look at FBU and remember when it hit over $9.30. As it started to slide I should have known the good times were over and could pick it up when it dipped again.
I need to get smarter than my buy and hold strategy.[/QUOTE] -
12-07-2012, 05:10 PMelZorroThanks for the advice KW, and I will have a look at your other post further on too. I think most of the bigger miners do follow gold fairly closely in the shorter term, but as you say have been drifting back against gold longer term, in a way tracking the broader market. So they are due for an upwards correction if they have been making a lot of profit. It's a sobering thought that after all this checking out of companies and following rigid rules, most of us would have been a lot better off with some gold bars, if purchased a few years ago.Quote:
Originally Posted by KW