long term investment portfolio

[Snoopy]

Be careful with ownership of US shares. Best to have them in a broker's nominnee holding. The reason being if you die ,your estate will have great difficulties selling the shares. Also you pay double brokerage,and divie's are very low,and have to be added to your NZ taxable income.

Percy is right about the difficulties of selling shares in your own name. I was told that if I wanted to sell I would have to transfer my shares to a nominee company in the USA first (takes a few weeks) and then sell. This is a real issue if you might die or are a trader.

However as an investor, I have my NYSE: YUM shares in my own name. YUM have a contribution scheme where you can forward them money and buy shares while paying only one set of brokerage (in the US). There are also no ongoing monitoring fees that would shave my returns if I had them in an NZ broker nominee company. So for me, this arrangement is working well.

While dividends do tend to be lower in the USA, growth prospects tend to be better. So I don't think you can rule out investment in the USA just because of lower dividends.

Saying dividends have to be added to your NZ income is generally correct. But since all income worldwide has to be declared in NZ and not only from shares I do not see why Percy made this comment. In fact if you are in the FIF taxation regime (total overseas investment portfolio $NZ50,000 plus), US dividends are specifically not added to your NZ taxable income, so Percy is quite wrong in this instance.

SNOOPY

[percy]

Percy is right about the difficulties of selling shares in your own name. I was told that if I wanted to sell I would have to transfer my shares to a nominee company in the USA first (takes a few weeks) and then sell. This is a real issue if you might die or are a trader.

However as an investor, I have my NYSE: YUM shares in my own name. YUM have a contribution scheme where you can forward them money and buy shares while paying only one set of brokerage (in the US). There are also no ongoing monitoring fees that would shave my returns if I had them in an NZ broker nominee company. So for me, this arrangement is working well.

While dividends do tend to be lower in the USA, growth prospects tend to be better. So I don't think you can rule out investment in the USA just because of lower dividends.

Saying dividends have to be added to your NZ income is generally correct. But since all income worldwide has to be declared in NZ and not only from shares I do not see why Percy made this comment. In fact if you are in the FIF taxation regime (total overseas investment portfolio $NZ50,000 plus), US dividends are specifically not added to your NZ taxable income, so Percy is quite wrong in this instance.

SNOOPY

My concern is death.I sold my US stocks a number of years ago so would pay to get up to dated information.I was told by my broker it was just as well I had not died while I owned them,as my estate may "never" been able to sell them,because of US paper work.I held shares in my name.One time when exercising options I had to send head shares certificate with cheque.Head shares were cancelled by mistake.Phone calls 8am Kiwi time,and I finally received cert back,with cancelled stamp still on it.Broker transfered into their name before selling.Work out but hassel.
Note.Ask broker what happens if you die.Snoopy check your position out. All that KFC must not be doing your health any good.!!! Only joking.

[voltage]

Thanks for all the comments.
Lizard, yes giving advice to people you need to take the conservative line of a diversified portfolio. Some ETFs would be sufficient.
Also Percy you are quite right, custodial is essential, I get charged $50 per stock per year to do this. there are cheaper options like www.alliancetrustsavings who have no charge for custodial. However I am interested in the comments not to follow a diversified approach and just focus on a selection of ASX and NZX shares. I like to keep things simple. The idea is to out perform the average. Would this approach be too risky. lets say you have $500000. Would you have 100000 in BHP?

[percy]

Thanks for all the comments.
Lizard, yes giving advice to people you need to take the conservative line of a diversified portfolio. Some ETFs would be sufficient.
Also Percy you are quite right, custodial is essential, I get charged $50 per stock per year to do this. there are cheaper options like www.alliancetrustsavings who have no charge for custodial. However I am interested in the comments not to follow a diversified approach and just focus on a selection of ASX and NZX shares. I like to keep things simple. The idea is to out perform the average. Would this approach be too risky. lets say you have $500000. Would you have 100000 in BHP?

No. 15% of portfolio would be $75,000.,which would be more than enough.However the trouble comes in a few years time.A friend of mine put $60,000 into EBO .with dividend reinvested and taking up issues his holding was close to $800,000.Now his estate has the horrible job of selling down this holding as it was close to 40% of his portfolio.

[OldRider]

Voltage:
I would suggest if you have that amount of funds, or greater, you have a look at the top 20 investments of Lic's such as AFI or ARG, they are
easily available over the net, and could give guidance to the proportions you could hold. As a portfolio grows larger it becomes increasingly more difficult to
beat averages by much. From the top of my head I think the larger conservative ASX listed Lic's hold between 10 and 14% in BHP

[shasta]

Voltage:
I would suggest if you have that amount of funds, or greater, you have a look at the top 20 investments of Lic's such as AFI or ARG, they are
easily available over the net, and could give guidance to the proportions you could hold. As a portfolio grows larger it becomes increasingly more difficult to
beat averages by much. From the top of my head I think the larger conservative ASX listed Lic's hold between 10 and 14% in BHP

Voltage

Check my thread for GMI on the ASX threads, it has shares in all the mining majors, BHP, RIO, Vale, Xstrata etc, & pays a dividend, its a stock for those wanting exposure to resources but not wanting to pick say just gold stocks etc.

I personally wouldnt invest in more than 5 companies at a time, in the past i've held 10 + stocks, & also at times 75%+ in 1 or 2 stocks, & both methods were either too risky, or too defensive, so for me 5 stocks is a balance for my risk tolerance.

[percy]

I have posted that I can see no really good reason to hold US or UK shares.I feel the costs,currency risks,market risks,makes the going too tough.
There is an article which I think is a must read where Bill English states US,UK {and Europe] are stuffed for the next 10 to 15 years.I agree.I have stated growth will come from Asia,India,and Brazil.The article is at www.stuff.co.nz then go to travel and article "Kiwi tourism must change:English."

[shasta]

I have posted that I can see no really good reason to hold US or UK shares.I feel the costs,currency risks,market risks,makes the going too tough.
There is an article which I think is a must read where Bill English states US,UK {and Europe] are stuffed for the next 10 to 15 years.I agree.I have stated growth will come from Asia,India,and Brazil.The article is at www.stuff.co.nz then go to travel and article "Kiwi tourism must change:English."

Percy, you're referring to BRIC (Brazil, Russia, India & China) thats where the world growth is coming from, the Western countries all carry too much debt!

[percy]

Percy, you're referring to BRIC (Brazil, Russia, India & China) thats where the world growth is coming from, the Western countries all carry too much debt!

Yes exactly.Thank you shasta as always.! Sorry I missed the Russians.!!

[BIRMANBOY]

Growth and RISK .....original post didnt imply risk was to be a desired criteria.

Percy, you're referring to BRIC (Brazil, Russia, India & China) thats where the world growth is coming from, the Western countries all carry too much debt!