2023 Returns

[RTM]

Here we go again. I'm the only communist who trades international markets. Feeble argument.

You confuse altruism with communism.
There are a lot of things you have never seen or experienced but it doesn't stop you commenting on them and it was Adam Smith I was calling sad.

Oh dear. Lets not turn this thread into another Daytr v Rob one. Keep it for the Black Monday one. That is more than enough.

[Daytr]

Oh dear. Lets not turn this thread into another Daytr v Rob one. Keep it for the Black Monday one. That is more than enough.

Don't worry RTM.
I am more than happy to ignore this thread.

[Snoopy]

Remember nobody serious has any interest whatsoever in anyone's equity portfolio when they are crapping themselves in fixed income.

It's what your return was overall that matters.

The index return was some 26%.

Unless you're very old or stupid or both don't hold debt.

Actually there is a very good reason to hold some debt, particularly at the moment when the bank is offering you a decent interest rate (term deposits) AND when the potential of falling interest rates can see capital growth in a fixed interest portfolio (bonds). The counterfactual to that 'bond option' being that if interest rates do not fall, then you will be 'forced' to endure high interest returns with no capital growth while you wait until interest rates fall (not too bad as a second choice scenario option).

Yet in the longer term equity markets do outperform bond markets. So in this sense I agree with SR on the wasted investment potential of fixed interest / bonds. But the advantage of holding fixed interest in the short to medium term is that such investments provide a 'holding pen' for your cash that is waiting to be deployed, while paying you to 'hold the pig' to boot.

Equity investments require careful evaluation of operational downside risk. There is no point in investing in a company that you are not happy with just becasue it is an 'equity investment'. The mantra that 'equity always performs better' does not apply to all stocks, all of the time. Even the likes of Buffett only turns up with one or two serious investment opportunities per year from all Berkshire's researched potential opportunities out there.

SR considers Berkshire relatively undervalued. But another way of looking at it is to say that Berkshire is fairly valued and the DOW is overvalued. Of course your expected returns going forwards from Berkshire do not look so good if you view things this way.

As for judging NZ based investments against an American sharemarket index, that is just inappropriate in my view. Generally you are looking at entirely different kinds of businesses both in scale, industry classification and yield 'over there' compared to 'here'.

SNOOPY

[mike2020]

I made a loss last year. Around 6%. I wrote a dissertation on how that came about, it was therapeutic to see it but of no use to anyone. Basically I had some very good luck 2019/20/21 and held. When I say luck I think I was lucky just to find two fairly obvious opportunities, one I went very heavily into and the other I started so small and followed it up, then down. Rebalanced one stock I was overweight in at a peak, also luck but maybe I am learning. All my much loved div payers have lead me to despair the last 18 months.

I think my theme song for this year is going to be "the wheels on the bus". Call me an optimist.

[Daytr]

Actually there is a very good reason to hold some debt, particularly at the moment when the bank is offering you a decent interest rate (term deposits) AND when the potential of falling interest rates can see capital growth in a fixed interest portfolio (bonds). The counterfactual to that 'bond option' being that if interest rates do not fall, then you will be 'forced' to endure high interest returns with no capital growth while you wait until interest rates fall (not too bad as a second choice scenario option).

Yet in the longer term equity markets do outperform bond markets. So in this sense I agree with SR on the wasted investment potential of fixed interest / bonds. But the advantage of holding fixed interest in the short to medium term is that such investments provide a 'holding pen' for your cash that is waiting to be deployed, while paying you to 'hold the pig' to boot.

Equity investments require careful evaluation of operational downside risk. There is no point in investing in a company that you are not happy with just becasue it is an 'equity investment'. The mantra that 'equity always performs better' does not apply to all stocks, all of the time. Even the likes of Buffett only turns up with one or two serious investment opportunities per year from all Berkshire's researched potential opportunities out there.

SR considers Berkshire relatively undervalued. But another way of looking at it is to say that Berkshire is fairly valued and the DOW is overvalued. Of course your expected returns going forwards from Berkshire do not look so good if you view things this way.

As for judging NZ based investments against an American sharemarket index, that is just inappropriate in my view. Generally you are looking at entirely different kinds of businesses both in scale, industry classification and yield 'over there' compared to 'here'.

SNOOPY

Totally agree Snoopy, re the holding pattern in cash etc whilst interest rates are high & until equities look attractive enough again to re-enter.
This is based on an index investment rather than any particular stock.
I'm currently in that holding pattern now, on the sidelines effectively.

It's served me well in the last year or so.

[winner69]

I made a loss last year. Around 6%. I wrote a dissertation on how that came about, it was therapeutic to see it but of no use to anyone. Basically I had some very good luck 2019/20/21 and held. When I say luck I think I was lucky just to find two fairly obvious opportunities, one I went very heavily into and the other I started so small and followed it up, then down. Rebalanced one stock I was overweight in at a peak, also luck but maybe I am learning. All my much loved div payers have lead me to despair the last 18 months.

I think my theme song for this year is going to be "the wheels on the bus". Call me an optimist.

Always good to write a dissertation to clear your thoughts

One of the kids came home from a school trip years ago saying the teacher had told them off for singing ‘the wheels on the bus are falling off, falling off’ …hope not the case this year for you lol

[mike2020]

Wheels coming off was 22 and most of 23 was grinding along the tarmac on the hubs. Was not all bad, I got a full allocation in the HGH raise

On a side note I am 57 this year and I am going to start thinking seriously about passive funds over the next 3 years.

[SailorRob]

Totally agree Snoopy, re the holding pattern in cash etc whilst interest rates are high & until equities look attractive enough again to re-enter.
This is based on an index investment rather than any particular stock.
I'm currently in that holding pattern now, on the sidelines effectively.

It's served me well in the last year or so.

ValueNZ, do you want to take this or shall I?

[ValueNZ]

ValueNZ, do you want to take this or shall I?

Go for it. I'm in Vancouver at the moment on holiday which is why my posts have been less frequent and also don't have access to a laptop.

[alokdhir]

Holding debt especially TD at peak of rates is a very big temptation which should be avoided ....when the TD rates are highest around that time stocks are most UNLOVED ...thus in the long run making a 5 years TD at peak will almost certainly give less returns then getting into a managed fund or even ETF like FNZ ...I experienced it myself in 2010 thus will totally recommend not to fall for the lure of assured returns with capital safe ...

Now the question of holding bonds ....rates go down then u get capital growth ...but u wud have got more in stocks for similar rate falls ...rates dont go down then u get yield but one can still get both yield and capital appreciation in TRA type stocks ....then how to find Bonds attractive in any scenario ...holding OCA bonds or OCA stock ...IFT bonds or IFT stock ...imo choice is simple ...but all can have their own views and circumstances .

All seasoned or not so seasoned players here know by now that rates are surely cyclical ...its timing can be only tricky part ...law of averages support looking for lower rates ahead ...sometime ...when is that sometime ...6 months or 1 year is the only question ...if one is looking at next 5 years or more then its almost certain that one will see OCR of 2.5% or lower sometime in next 5 years ...then one should hold stocks or debt of OCA / IFT etc ??