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  1. #1
    ShareTrader Legend Beagle's Avatar
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    Default Investment Portfolio for Retirement

    Suppose you're 65 and your wife is 63 and you have recently downsized your house and have exactly $500,000 to invest to supplement your superannuation. Modest risk conservative age appropriate portfolio suggestions please.
    I'm starting this thread for ynot.

    Please suggest a portfolio predominantly based around conservative sustainable dividend income.

    My initial thoughts.

    Of the Utilities I like and presently hold MEL and GNE approx. gross yields 6.8% and 9% respectively
    REIT's I like and hold are ARG. PIE (exempt income about 5.2% yield) I also like GMT, lower yield about 4.5% from memory but also a PIE
    Retail - I like HLG but presently don't own any. Gross yield about 10%
    Retirement sector - OCA for 6% gross yield in FY19 growing strongly in the years ahead
    Transport - AIR for gross yield of approx. 10%
    Consumer staples ZEL for gross yield of about 14% looking forward to 2020 year.
    Financials - HGH for approx. 9% gross yield
    $25,000 - $50,000 in cash in a call account with HGH paying 2.5% as an emergency / medical fund

    I wouldn't own bonds as the yields are too low and would use the power companies and REIT's as a bond proxy.

    I am sure others will be happy to contribute and make suggestions to help you ynot.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  2. #2
    percy
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    Well I am now 70.Wife is 69.
    At the end of January last year I retired from selling books to school libraries. .
    In May we downsized our house.Brought a new slightly larger over 60s house.
    Share potfolio was reorganised.Objective was to hold along term portfolio to provide dividends, and once that was achieved the balance could be put into growth shares.Most Australian shares were sold.Two reason ;[a] I was finding the Australian small cap market difficult.[b] Australian dividends are not imputated.
    Dividend NZ stocks. GNE,MEL,SPK,HGH,TRA........These stocks alone provide the level of dividends I wanted.
    Other "core" NZ stocks.MCK and OCA.
    Fun NZ stocks,ALF,IKE,PGW,RBC.
    My largest NZ shareholding is not one of the above.
    My Australian stocks include a few small holdings I will not list.
    Aussie stocks.AQZ,MMI,SEQ,TTI,VHT.
    I do not hold any bonds,however have a large enough cash holding.
    Last edited by percy; 16-01-2019 at 07:29 PM.

  3. #3
    Legend minimoke's Avatar
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    Can we assume Govt Super is worth $617 a week in the hand and house is mortgage free.

    What is the couples budgeted / hoped for expenditure a week. How is their health?

    What is value of house - as I would also look at a REL.

  4. #4
    …just try’n to manage expectations… Maverick's Avatar
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    Well , there will be no surprises from me. Put the lot in OCA.
    "shock , horror!"I hear you all say what about diversification?
    Forget diversification,It's only 500K , regular people will put all of that into one rental house (or 1.5 x rental houses) plus living in their own freehold house and have no issues. They'll even be happy to borrow some to do it.
    Why OCA?
    Beyond everything said on that thread (which implies good growth for ages), for the purpose of retirement its gives a fair dividend return and capital growth.
    Wait, there's one more thing...here is the most important part...the share will also be inflation proof. For retirement funds that will be needed 30 years from now when plumbers cost $500/hr .Without keeping the 500k up with inflation, it will have eroded to almost worthlessness by the end.
    I see the price of a village/house representing the amalgamated sum of labour costs of the era (land, plumbers, engineers etc all combined into one new house build cost) so in other words your OCA unit (continually maintained to new condition all paid by the residents) will keep up with whatever the costs of the future might be.
    While HLG , AIR etc have good divis their assets don't` necessarily keep up with inflation for that plumbers bill 30 years from now (i.e HLG capital value growth is benign)
    Can`t go wrong with OCA. At he very minimum if the share price doesn't go up one more cent above the rate of inflation from $1.08 the current dividend alone is adequate..but lets face it, its gonna go up sh*t loads as well.

    Disc , retiring in 3 weeks.
    Last edited by Maverick; 09-01-2019 at 02:55 PM.

  5. #5
    ShareTrader Legend Beagle's Avatar
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    Hi minimoke, yes it will be when his wife hits 65.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  6. #6
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Maverick View Post
    Well , there will be no surprises from me. Put the lot in OCA.
    "shock , horror!"I hear you all say what about diversification?
    Forget diversification,It's only 500K , people will put all of that into one rental house (or 1.5 x rental houses) plus living in their own freehold house and have no issues. They'll even be happy to borrow some to do it.
    Why OCA?
    Beyond everything said on that thread (which implies good growth for ages), for the purpose of retirement its gives a fair dividend return and capital growth.
    Wait, there's one more thing...here is the most important part...the share will also be inflation proof. For retirement funds that will be needed 30 years from now when plumbers cost $500/hr .Without keeping the 500k up with inflation, it will erode to almost worthlessness by the end.
    I see the price of a village/house representing the amalgamated sum of labour costs of the era (land, plumbers, engineers etc all combined into one new house build cost) so in other words your OCA unit (continually maintained to new condition all paid by the residents) will keep up with whatever the costs of the future might be.
    While HLG , AIR etc have good divis their assets don't` necessarily keep up with inflation for that plumbers bill 30 years from now (i.e HLG capital value growth is benign)
    Can`t go wrong with OCA. At he very minimum if the share price doesn't go up one more cent above the rate of inflation from $1.08 the current dividend alone is adequate..but lets face it its gonna go up sh*t loads as well.

    Disc , retiring in 3 weeks.
    LOL you can't have too many. I love your enthusiasm, I really do but ynot wants very conservative so I would think that MUST include some pretty good level of diversification.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  7. #7
    …just try’n to manage expectations… Maverick's Avatar
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    "Please suggest a portfolio predominantly based around conservative sustainable dividend income."
    The portfolio is "conservative sustainable dividend income". The portfolio doesn't need altering . To demonstrate the corrosion of inflation , Ynot just needs to remember what plumbers cost him in 1990 ($25/hr, now $80 + gst)then work out perhaps his idea of "conservative" akin to putting $500k (in 15 different pots) under the mattress is a certain slow train wreck.
    Then for stage 2, the fun part, he needs to guide Mrs Ynot into the idea. (she will never have a bar of it though) so instead ... just tell her she can buy new shoes every time the OCA div comes out.....twice a year forever! Welcome to the "Maverick school of charm"

    Disc . Retiring in 2.9998 weeks.
    Last edited by Maverick; 09-01-2019 at 03:49 PM.

  8. #8
    percy
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    Quote Originally Posted by minimoke View Post
    Can we assume Govt Super is worth $617 a week in the hand and house is mortgage free.

    What is the couples budgeted / hoped for expenditure a week. How is their health?

    What is value of house - as I would also look at a REL.
    Govt Super $491.52 net each a fortnight.
    No mortgage.
    Last power bill [solely electric] $104.65

  9. #9
    Legend minimoke's Avatar
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    Quote Originally Posted by percy View Post
    Govt Super $491.52 net each a fortnight.
    That's probably due to yoru focus on dividends and paying the price through extra taxes.

    Which in a "diversified portfolio should mean: cash on hand; dividend yielding shares that dont loose capital value (for cash flow purposes that can also be sold down over first few years) and shares with less dividend but more potential for growth so dividends kick in in later years and higher capital value mean long term sell down creates greater return

  10. #10
    percy
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    Quote Originally Posted by minimoke View Post
    That's probably due to yoru focus on dividends and paying the price through extra taxes.

    Which in a "diversified portfolio should mean: cash on hand; dividend yielding shares that dont loose capital value (for cash flow purposes that can also be sold down over first few years) and shares with less dividend but more potential for growth so dividends kick in in later years and higher capital value mean long term sell down creates greater return
    After following the sharemarket for 52 years I settled on the portfolio I wanted for our retirement.
    More than happy with what we have.

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