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hi guys

i did search on the forum a bit, but it doesn't seem like there is a thread directly related to this.

asssuming most of you did your research already, but what will be the best / ? safest investment ETF to carry you through the junk status?


i know some local shares and thus ETF's coupled to them might stick through a junk rating, but i dont want to do the long term thing only to discover 2/3 years down the line that we are not going to recover


currently i am into the following ETF's :

DIVTRX +- 60%
then equally divided:
STXIND
DBXUS
DBXWD
STXFIN
PTXTEN
PTXSPY


what sectors will be hurt the most on a junk rating?

my feeling is to just jump ship onto DBXUS / DBXWD, as i dont think the USD/ZAR will ever recover with a bad rating..

sigh.... zuma fail


Thx fuys

I'm no expert, seriously not at all, but I was under the impression that most of the bad news is already priced in. That, and the fact that the capital gains tax will really hurt me are 2 reasons why I'm not doing anything right now.

As for a rand recovery, I still think we'll see a R1 or so improvement should Zuma be recalled. Could happen post election, especially if the ANC loses a city or two.

FYI, my holdings are about 40% STXIND, 55% DIVTRX and 5% VWRD.

******was going to chuck this into chat, but figured it's too long and has a pic, so chucking it here as it's kinda on topic **************

Patrick, looking at the R/$ chart since 1995, do you think the rand more more likely hit R10/$ or R20/$ in 5 years time? How much of the growth in the JSE has just been the devaluation of the rand and not actual growth?

For me, the rand is becoming  a very fragile currency - as we've seen with nenegate - it's doesn't take much to rock it badly and I think people need to plan for it. Personally, I have a pretty bleak outlook on the country - even if we say goodbye to Zuma, the rot is too deep - and if the EFF get in, well, that's just curtains.

On the bright side, there are plenty of ways to invest in hard currency alternatives - without your money leaving these shores. From dual listed companies, to companies where most of their earnings come from overseas, to pure oversea plays incl. the DBX's and of course, some lovely  overseas REITS that also give you a hard currency income.

Someone with a gift for writing and an interest in the subject should consider writing a blog on the subject....

Just read your blog DT - very interesting. Looks like we have similar ideas - but I think you started investing quite a bit before I did (although I had tried a couple of times before). Also own Taste and GPL - although Taste might take a while before resuming dividend payouts. Would be very interested in what your complete SA portfolio looks like. I am guessing that "small cap hotel stock" was a punt at Gooderson? Or the more stable City Lodge?

Might be nice if you started a thread about yourself and your investing.

well, now I really have to see your portfolio! In an earlier portfolio - around 5 years back - had a small holding in Gooderson. Looks like I would be around even had I kept it. Normally when I check on a share that I had, then sold I just want 

For interest sake - this is my main porfolio that I live off, also have a smaller one for shares that did not make the cut on the main one - PSG, more taste, WHL, Aspen, DSY, Spar, Adi, Micromega and a few others.

Listed as percent profit/loss and total holdings

ACCPROP   -7.69   2.03%
A V I   41.43   5.64%
ARROW   6.4   3.37%
BATS   98.44   3.07%
CORONAT   -9.08   6.90%
CAPITEC   220.75   7.15%
FAIRVEST   -12.82   1.91%
GRANPRADE   -29.4   0.78%
HYPROP   44.18   8.35%
INTUPLC   24.29   3.17%
MARADELTA   2.64   1.25%
MMI HLDGS   1.63   2.98%
MR PRICE   29.36   6.27%
NEPI   55.72   2.41%
OLDMUTUAL   23.85   3.54%
PERGRIN   35.73   2.30%
REDEFINE   18.42   1.40%
RHODES   32.58   2.28%
RMIH   33.76   2.96%
ROCKCASTLE   102.33   5.37%
RI PLC   30.1   4.93%
SA CORP   26.18   2.62%
SAFARI   -16.65   1.76%
SANLAM   3.59   1.69%
SIRIUS   22.45   2.67%
STOR-AGE   -4.17   2.21%
TASTE   -25.95   2.61%
TEXTON   -22.42   1.79%
TOWER   -15.99   2.32%
VODACOM   34.38   3.66%

Very interesting - lot's of small caps there and so concentrated. Well done on Trustco and Nepi - any reason why you sold down on Nepi?  What's on you watchlist and what are you plans for the portfolio?  I also agree with you that if a share does well, let it run.  I also bought on future dividend yield - so some did not pay a great dividend to start with, but I felt within a few years it would pay 4% plus (MRP, Capitec, RMi, GPL, Taste, Rhodes) - hasn't always worked out - but looking for 10% growth in dividends per year.

Very interesting - lot's of small caps there and so concentrated. Well done on Trustco and Nepi - any reason why you sold down on Nepi?  What's on you watchlist and what are you plans for the portfolio?  I also agree with you that if a share does well, let it run.  I also bought on future dividend yield - so some did not pay a great dividend to start with, but I felt within a few years it would pay 4% plus (MRP, Capitec, RMi, GPL, Taste, Rhodes) - hasn't always worked out - but looking for 10% growth in dividends per year.

Portfolio is perhaps too concentrated, but I have now stopped accumulating my 3 big ones and will use their dividends to diversify locally and offshore. I see good things with perhaps a GPI/Spur tie up at some point. No major plans except I would like to convert some of Gooderson into Choppies when the price right, which may not be for a while now.
Sold down NEPI as I thought at R190 it was too expensive, the yield is very low at that price. However, it is a great stock and I may regret it, I just saw better returns elsewhere. I recently bought Delta Property on what should be about a 14% yield for example, whereas NEPI was on about 3%.

BTW - read your blog on Gooderson, and you do make a compelling case. Personally, I am not that interested in NAV - but understand that it's an import measure of a company. I prefer to look to headline earnings and try look to the future and seen anything that could get in the way of this figure growing - which, of course, would impact on dividends.  I am in a slightly different boat as I do live on dividends now - so a decrease impact me straight away.

Glad you enjoyed this. In all honesty this has been an investing lesson for me, rather to stick to higher quality. However, I do like the company, it is conservatively run and financed, and the NAV underpin is there so I am not worried. They have sold the two unprofitable hotels and done a lot of maintenance at all the others, the profits and dividends should come through in future years. The biggest cost though is the opportunity cost of having funds tied up in this when I want to invest in something else.

Yeah, with good companies - dividend yields often get left behind! What I do is work my dividend yields on my cost not current price.  For instance, my average cost on Capitec is R185 and my D/Y for this year was 5.67% - not bad - and I expect it to grow by 10 - 15% for many years. Same with MRP (over 4% anyway).

No sure if this is the right way to look at it - it certainly isn't maximizing dividends (for that, selling it and buying a better current yield would make sense), but I feel it's a comprise between dividends and hopefully some growth.

I would tend to agree with your strategy, it is generally better to keep the good stocks even if the yield gets left behind, especially great stocks like CPI and MRP. It is what I do too mostly unless the valuation becomes really extreme, which I felt with NEPI. However even with NEPI, if there were not other stocks that I really wanted I would most likely not have sold it down.