long term investment portfolio

[percy]

Apple keeps needing to bring out new technology every 1-2 years to keep ahead of the competition. If it doesn't make the next best thing all the time, it's products will become obsolete and it's business will suffer. A lot of the growth that Apple has had over the last wee while has been from Ipod, Ipad, Iphone, etc. Who knows what people will be using 5-10-15 years from now.

Compare to something such as Coca Cola, Colgate Palmolive, etc. People have been drinking coke and brushing their teeth and washing themselves in the shower for years. I doubt toothpaste will become an obsolete product in 5-10-15 years time. Same as people will continue to drink the same coke recipe years into the future.

Also the fact that you said "broker recommendation" isn't very re-assuring. You should drill your broker and ask why he is making these decisions, what are his reasoning's behind his recommendations and do they suit your investment ideas. After all, it is your money you are playing with.

Let me know what you think.

Voltage.
Pleased you have the ownership correct.ENP's post about Apple is correct.Steve Jobs's health is also a concern.
Coke,Colgate,ie your global consumer brands I would agree with.
As a matter of interest it will be interesting to see which performs best,Coke or BHP?. Also US dollar or Aussie dollar?.My not very strongly held view is BHP and Aussie dollar.Just feel there are no real new jobs in US and problems have not been cured.Yet Aussie has what rest of the world wants.

[voltage]

Thanks ENP and percy for your comments. Do you both follow a diversified approach globally or more focused on NZX and ASX. I do have a good allocation of BHP. It is very difficult to filter the noise. There are so many ways to construct a portfolio it certainly becomes very confusing. Who really does know. Perhaps it is best to stick with index funds.

[percy]

Voltage. Do not try to do everything,understand everything,be right with every share you buy.I have made and lost money on shares in NZ,Aussie,USA,and UK.I have at times focused on a big holdings in a few companies,and other times a few shares in a large number of companies.At times I have looked to buy great growth companies,while other times I have only brought companies that pay divies.I have followed NZ market for years,even when I had no money to invest.I enjoy the market.It is a profitable hobbie for me. Just take your time with your portfolio.Sometimes the correct answers will come to you when you are gardening.!! WARNING.Do your own thing,manage your own money,do not delegate it to your broker or others.!!
My portfolio is mainly NZ companies for dividends. ie about 71%. I have a large number of small holdings in spec Aussie companies,oil , minning,medical, backdoor listings and small cap companies .This would make up approx 20% of my portfolio. About 9% is in MLN which gives me global shares.

[voltage]

Thats interesting Percy. So NZX is your income portfolio and growth comes from small ASX companies. You see no point in having companies like coke etc. I must say brokers recommendations have never been that great. I wish to be a long term holder and reluctant to sell. I wish to buy right at the beginning.

[percy]

Thats interesting Percy. So NZX is your income portfolio and growth comes from small ASX companies. You see no point in having companies like coke etc. I must say brokers recommendations have never been that great. I wish to be a long term holder and reluctant to sell. I wish to buy right at the beginning.

Less than a year ago a friend asked me to read POT annual report.I had LPC Lyttelton port shares some time ago so knew a bit about the port business.The report was so good I brought some shares at $7.26.
Over 26% increase in SP plus divie.Sauce did great posts on RYM when SP was about $2.07.Made sense to me, so added to my holding.Over 30% increase plus divie.I just feel more comfortable with NZ and Aussie.Dividends I love.Tax paid divies get me really excited.! I used to think you had to have Coke etc but now I am not so sure.Just remember you only need one good idea a year.You do not have to be clever everyday.

[ENP]

You should aim to know a lot about a little rather than a little about a lot.

Meaning, find a few companies you think look like a good long term investments and learn all you can about them.

If I was you, I'd look at the NZX first, since it's local and easier to find info on. Then branch out to the ASX since it's still close and lots of local info on it. Then if you must, branch out into UK, USA. There is simply more info on NZ companies in the local news that you can get a hold of as compared to trying to do your research on companies based in the USA.

I think you really need to figure out what you want out of your investments first, before you just choose any company because it is "blue chip"

[percy]

You should aim to know a lot about a little rather than a little about a lot.

Meaning, find a few companies you think look like a good long term investments and learn all you can about them.

If I was you, I'd look at the NZX first, since it's local and easier to find info on. Then branch out to the ASX since it's still close and lots of local info on it. Then if you must, branch out into UK, USA. There is simply more info on NZ companies in the local news that you can get a hold of as compared to trying to do your research on companies based in the USA.

I think you really need to figure out what you want out of your investments first, before you just choose any company because it is "blue chip"

voltage. I think you will not get better advice than this.

[voltage]

thanks for the advice. So you are also saying do not focus too much on complete diversification, ignore funds and concentrate on a small number of good companies in NZ and Aussie. Obviously one is after long term growth with growing dividends.

[Lizard]

Voltage started this thread with the words "friends want advice"....

"Friends want advice" is one of those frustrations that strike a lot of professions, and the financial arena is one of the trickiest. Some issues:

1. there are rarely 100% "right answers"
   
2. you probably don't have all the information and may not feel able to probe their finances in full
   
3. odds are they won't tell you what they choose to invest in, but will at some stage feel aggrieved when an investment loses money.
   
4. the more money your initial advice makes for them, the more advice they will expect you to provide and the more money they will bet on it - until the inevitable bad investment.

What your options are:

1. Send them to an Authorised Financial Adviser - Unfortunately, most of us don't know of any we would be happy to leave our funds with, or we might be doing so (if anyone knows of any that have actually made them or their friends returns that are greater than term deposit over 10 years or more, then it would be good to know!). However, if the friends are more like acquaintances who are just looking for a free lunch, then it pays to have an advisers name up your sleeve for them.
   
2. Educate them - if you have friends who are genuinely interested in making good investments and show a bit of interest, then the best place to start might be loaning them some investment books and helping them to understand how they can apply what they're learning to their own situation. Even here, there are a few choices - do you loan them Martin Hawes or Alex Elder? Personally, unless you know your friends well and they already have some knowledge and are determined to invest in high-risk, spec shares, I would steer them towards a very conservative starting point with Martin Hawes or Mary Holm or some such.
   
3. Help them - if you are really in so deep that you feel obliged to help them with specific investment recommendations, then be very careful. Professional advisers are now required to "Know Your Client" and anyone giving more than the most basic advice should try to meet this standard. I don't think there are any legal constraints on giving well-meaning advice to a friend (might be wrong), but it still doesn't hurt to try and give professional-quality advice. I would say, in general, that if dealing with with someone who needs specific advice, then they are probably not ready for high risk-return investment. So despite what you yourself might choose to do with that amount of funds, it pays to remember that you will not be able to exercise control. Therefore it is probably best to take a low-risk balanced/diversified approach. This may mean keeping a portion in liquid fixed-interest/cash investments or using a suitable mix of managed funds for those who want to set and forget. No matter how much they want to set and forget, I would encourage them to review their investments either quarterly, six-monthly or at least annually and make some suggestions as to how they might go about doing this - maybe help them to draw up a form they can use for review and decision-making

In the end, the goal with friends is not to choose them the best tickets out of a raffle book, but to lead them towards the tools they need to manage their long-term financial situation with as little help from you as possible!

[BIRMANBOY]

Wise words Lizard!!!!!

Voltage started this thread with the words "friends want advice"....

"Friends want advice" is one of those frustrations that strike a lot of professions, and the financial arena is one of the trickiest. Some issues:

1. there are rarely 100% "right answers"
   
2. you probably don't have all the information and may not feel able to probe their finances in full
   
3. odds are they won't tell you what they choose to invest in, but will at some stage feel aggrieved when an investment loses money.
   
4. the more money your initial advice makes for them, the more advice they will expect you to provide and the more money they will bet on it - until the inevitable bad investment.

What your options are:

1. Send them to an Authorised Financial Adviser - Unfortunately, most of us don't know of any we would be happy to leave our funds with, or we might be doing so (if anyone knows of any that have actually made them or their friends returns that are greater than term deposit over 10 years or more, then it would be good to know!). However, if the friends are more like acquaintances who are just looking for a free lunch, then it pays to have an advisers name up your sleeve for them.
   
2. Educate them - if you have friends who are genuinely interested in making good investments and show a bit of interest, then the best place to start might be loaning them some investment books and helping them to understand how they can apply what they're learning to their own situation. Even here, there are a few choices - do you loan them Martin Hawes or Alex Elder? Personally, unless you know your friends well and they already have some knowledge and are determined to invest in high-risk, spec shares, I would steer them towards a very conservative starting point with Martin Hawes or Mary Holm or some such.
   
3. Help them - if you are really in so deep that you feel obliged to help them with specific investment recommendations, then be very careful. Professional advisers are now required to "Know Your Client" and anyone giving more than the most basic advice should try to meet this standard. I don't think there are any legal constraints on giving well-meaning advice to a friend (might be wrong), but it still doesn't hurt to try and give professional-quality advice. I would say, in general, that if dealing with with someone who needs specific advice, then they are probably not ready for high risk-return investment. So despite what you yourself might choose to do with that amount of funds, it pays to remember that you will not be able to exercise control. Therefore it is probably best to take a low-risk balanced/diversified approach. This may mean keeping a portion in liquid fixed-interest/cash investments or using a suitable mix of managed funds for those who want to set and forget. No matter how much they want to set and forget, I would encourage them to review their investments either quarterly, six-monthly or at least annually and make some suggestions as to how they might go about doing this - maybe help them to draw up a form they can use for review and decision-making

In the end, the goal with friends is not to choose them the best tickets out of a raffle book, but to lead them towards the tools they need to manage their long-term financial situation with as little help from you as possible!