Tuesday, 30 October 2018

You Need a Plan





Daughters. Folks.


I talk to and converse online with so many good folk that are invested in the stock market and who do so WITHOUT an investment plan and method.
Those without an investment plan and method are always going to be on the hunt for the best stock, the best this or that, the best market timing and it is evident by the indecision they display and the ceaseless talking and surmising all over the 'interwebs'.  Blown about by every wind of financial doctrine. Noise.
Having a sound investment plan and sticking to it through thick and thin is MOST of the battle won. Conversely, fiddling with our portfolios (if indeed they are portfolios - often they're just a mish-mash of holdings representing our thinking at the time of purchase) is a sure-fire way to lose money unless we are just dumb lucky. Some of my worst investing mistakes where from fiddling, tinkering or changing investment plan and method ..... or those times I have decided to have a little bit of 'fun' with a stock holding or two.

My Simplified Investment Plan and Method
My investment plan is this: To own a portfolio of LIC's (Licensed Investment Companies stocks) both inside and outside of superannuation which will grow to produce a gross dividend income of $60K per annum. 
My investment method is this: Save a minimum 20% of my net income. Each time $5000 is saved, then buy the best value at the time out of one of the following LIC's - AFI, ARG, MLT, BKI, DUI or AUI. 

My investment measurements
1. Amount of stocks owned 
2. Annual dividends received

Simple. Elegant. Respectful of my future self.

What's your plan?


Phil



4 comments:

  1. Hey Phil, sounds like a great strategy, my portfolio is a roller coaster of tech startups and it’s not all that “fun” haha. How do you determine what is the best value of your selected LIC at your time of purchase.

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    1. I buy LIC's when they are trading under NTA. Unlike most investors these days I do NOT buy for the purposes of realizing capital gains but rather for growing dividend income - a very old fashioned way to invest but one that has stood the test of time.

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  2. Your plan sounds good, I'll just take that one thanks ;)
    Mine is actually very, very similar. You are right though, it helps to keep focused and not question your decisions if you keep things simple and consistent.

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    1. As good as it as been educating myself about investing I can easily understand why people get analysis paralysis.

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