This is a guest post that I thought would be of interest to my readers. It is in the spirit of Melbourne Cup Day, so I will be tempted soon in having my own punt on a LIC trifecta in the comments section at the end (feel free to do the same). Please read below to find out more about the author. (Note I have no affiliation with the below author / business).Continue reading “Guest Post – The ‘Melbourne Cup of LICs’: Our form guide and three favourites”
It has been a tough environment for active managers, so I thought I would take a look at a performance comparison of the most popular ASX LICs.Continue reading “ASX LIC Performance Comparison – Not A Happy FY19”
A checklist for buying ASX Listed Investment Companies (LICs)
A list of 10 factors to check as a guide when to buy, scroll down for further explanations on each.
1) Discount / Premium to NTA
2) Management Expenses and ALL other costs
3) Performance Track Record
4) Investment Style
5) Alignment of management’s interest with shareholders
6) Ownership Structure
7) Investment Management Agreement (IMA)
8) Size of the LIC
9) Future Dividend Capacity
10) Marketing / Reporting of the LIC
When I look back at my investing mistakes, one common theme is rushing into a new purchase. I find I have usually done better when a number of months pass until I begin accumulating a position in a new idea.
When investing in LICs I try to make sure I have considered numerous factors first. That helps me avoid getting itchy fingers and hitting the buy button quickly. Continue reading “LIC Investing – 10 factors to check before buying.”
A simple game I used to like playing as a kid was spot the difference.
It is not unusual for ASX Listed Investment Companies (LICs) to play their own version of the game. Continue reading “Playing Games with LIC Performance Reporting.”
Advantages of these ASX LICs well documented from the likes of the Barefoot Investor and financial media in general.
The positives of the older, low fee ASX LICs I feel are very well known and covered. They have usually got a good run in the financial press from the likes of the Barefoot Investor and Peter Thornhill, and deservedly so. I personally think they have been excellent investment products for so many for such a long time. I particularly like the positive influence they have had on investors helping them with the behavioural aspects. i.e. sticking the course and seeing the benefits of compounding, highlighting dividend returns and benefits from not overtrading, including taxation benefits.
Now for the other side..
Now for the section where I might receive some negative feedback!
Before you go “all-in” on a portfolio full of the highest franked dividend payers on the ASX, read below to consider being diversified from a political and taxation standpoint. Likewise be wary of going “all-in” to other investments based solely on current taxation incentives in place.
When I come across articles about how Australian investors need more diversification it often does not refer to potentially changing tax laws. There is a bit of overlap with these themes but there are different issues to consider.