The JSE and finance forum for South Africa
General Category => Shares => Topic started by: Fawkes85 on September 03, 2015, 02:36:03 pm
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Reading about all your blogs, experiments and pulverized sandboxes have inspired me to do my own. So starting today I will begin my own hoping to hear your thoughts and opinions as we go along. So here's the plan:
I will make use of a core/satellite approach to build my portfolio. The DIVTRX will be my core and it will make up 50% of my portfolio. As for the the satellites I will make use of Mr Brown's Lazy Trading System with the following ETFs:
STXIND DBXUS
STXFIN DBXUK
STXRES DBXEU
RMBMID DBXJP
PTXSPY
As things stand at present I own some shares in the DIVTRX and an equal amount of shares in NFGOVI. I will dump the NFGOVI in due time. At current prices I will be making a loss and I would like to at least break even. I have enough cash on hand to buy more DIVTRX shares to bring its share up to 50% of my portfolio and I won't be getting any buy signals from the LTS any time soon. Thus I am in no hurry to sell the NFGOVI shares. I can wait it out and wait for the prices to go up a little before I sell.
I will make a post every time I buy as well as every Wednesday when I will be reviewing all my signals on the LTS. At the end of every month I hope to indicate by how much my portfolio has grown :D or shrunk :wall:
So just to recap, as of right now this is how things stand:
DIVTRX 15.71%
NFGOVI 28.38%
Cash 55.91%
Portfolio growth since inception: -6.59% :wall:
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I like these, will be following this and MRDiv's 888 blog. I'm very curious to see how the lazy trading system works for you. Have you thought about trying it in the game?
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I also like, :TU: , keep it up.
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I like these, will be following this and MRDiv's 888 blog. I'm very curious to see how the lazy trading system works for you. Have you thought about trying it in the game?
I only started playing the game 2 or 3 days ago so no. I think for this year I am just gonna muck about on the game then give the LTS a try when we start fresh next year.
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So it is Wednesday and as promised I will make a post each Wednesday to review my positions on all the satellites regarding the Lazy Trading System. I know it is early and the markets haven't even opened yet but I am 7 hours ahead from you guys in SA and once the markets open I will be busy working and I won't be done until around 13:00 SA time. As I am using FNB Investor I need to make sure I get my trades in early enough as with FNB Investor the brokerage fee shoots up from 0.6% to 2% if my trades go through after 15:00.
I also thought it would be a good idea to explain to people how the LST work just in case they are interested. It's very simple. You take a chart of the ETF and look at the following indicators:
1. Is the 30 day EMA above the 60 day EMA?
2. Is the price of the ETF above the 15 day EMA?
3. Wait a week. If the price has gone up from a week before buy. If it is flat or down wait another week.
I have, however, added another indicator. The 15 day EMA needs to be above the 30 day EMA. I have back tested the LST going back 5 years for all the ETFs I am using the LST for and I found that to be a necessary indicator. So this is where we stand:
STXIND: 30EMA not above 60EMA. Check back next week.
STXFIN: 30EMA not above 60EMA. Check back next week.
STXRES: 30EMA not above 60EMA. Check back next week.
DBXUS: 30EMA above 60EMA. 15EMA above 30EMA. Price above 15EMA. If it is up next week I will buy.
DBXUK: 30EMA not above 60EMA. Check back next week.
DBXJP: 30EMA above 60EMA. 15EMA not above 30EMA. Check back next week.
DBXEU: 30EMA above 60EMA. 15EMA not above 30EMA. Check back next week.
RMBMID: 30EMA not above 60EMA. Check back next week.
PTXSPY: 30EMA above 60EMA. 15EMA not above 30EMA. Check back next week.
As for the rest of the portfolio, I am still waiting for the NFGOVI to go up. If it is not up by next week Tuesday I will have to bite the bullet and take the loss as I will most probably need the cash to buy DBXUS. Used up all my cash to buy DIVTRX on Monday. Went over my alloted 50% but it was so bloody cheap I couldn't help myself. Will either scale back to 50% or will not buy anymore when I add cash to my portfolio in the future.
Portfolio make-up:
DIVTRX 70.08% ::)
NFGOVI 28.59%
Cash 1.33%
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Without "reigning on your parade" - what is your objective with this portfolio - investment or trading. If trading then you need to factor in that your profits/losses will be subject to tax at your current tax rate (or higher/lower) dependent on income derived from hopefully profits. In essence profits on shares sold will swell your current income and your tax will be determined based on your total income irrespective of source.
If investing then ETF generally only pay out quarterly so you may have to time your sales to ensure that you get the dividends and you have to hold the EFT for 3 years not to be deemed a trader
As a final word of advice keep meticulous records of your transactions (run a spreadsheet in need) if you are going to trade there is nothing more daunting than getting a SARS audit
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Interesting post, looking forward to read about your experience, good luck.
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Are there sell indicators too or is it just market entry points you identify?
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Without "reigning on your parade" - what is your objective with this portfolio - investment or trading. If trading then you need to factor in that your profits/losses will be subject to tax at your current tax rate (or higher/lower) dependent on income derived from hopefully profits. In essence profits on shares sold will swell your current income and your tax will be determined based on your total income irrespective of source.
If investing then ETF generally only pay out quarterly so you may have to time your sales to ensure that you get the dividends and you have to hold the EFT for 3 years not to be deemed a trader
As a final word of advice keep meticulous records of your transactions (run a spreadsheet in need) if you are going to trade there is nothing more daunting than getting a SARS audit
I am here to invest and maybe trade a little bit to just to keep it interesting. With DIVTRX I am most definitely going long. Very long. Will be holding my position with the DIVTRX for at least 5 years. As for the satellites I chose the Lazy Trading System exactly because it is more of an investment system with a little bit of trading. The man who I got the system from is Simon Brown and using the LTS he held a position in STXIND for more than 5 years. He only exited the position recently. Other than that I do not live in SA. I pay my income taxes where I currently live which makes me exempt from paying income taxes in SA. I am taking note of every buy and sell I make. Don't know how to use Excel so I got a rudimentary table going on Word. Every single buy and sell goes into it.
@Patrick I have no idea how you guys get two quotes in one post so couldn't quote you in here but yes, there are sell indicators. If you want to be really defensive you sell when the price hits the 15EMA. If you want to be more aggressive you sell when the price hits the 30EMA. As Mr Brown has put it, and in my personal experiences I agree, it is better to leave it until it gets to the 30EMA. It can get to the 15EMA pretty easily and then within one or two days it bounces right back up again. So you can imagine. It goes below the 15EMA and you sell, then it goes above it again which means you get your trigger to buy again. You will end up just selling and buying and selling and buying losing a lot of money.
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Patrick, you can find an explanation of the LTS here: http://www.justonelap.com/webinarDetail.asp?intWebinarID=158
Fawkes, have you thought about Simon's Momentum Portfolio? I know Simon's all cash at the moment on the LTS, but at least there's buying happening in the MP: http://www.justonelap.com/webinarDetail.asp?intWebinarID=283
I like the results he's shown for the mid caps so far in the MP.
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Yeah, I am all cash on the LTS right now too. Or well I am all NFGOVI on the LTS. I have not looked at his momentum portfolio yet but will give it a gander.
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Ok, it's that time of the week to see how my triggers are doing on the Lazy Trading System. Before I do that, however, I need to talk about this Beginner's Portfolio of mine. Since it is a beginner's portfolio there will be some changes made as I go along and find my feet. Some will be big and some will be small. Today will be one of those times. I have decided on two changes. One big and one not so big.
So first the big one. For many years now, even back when I was a student and never thought I will actually have the money for it, I have been wanting to be invested in real estate. Now I am not gonna take you on my 10 year journey to explain to you how I have come to my current decision, but I have decided the best way for me to go is to invest in a REIT. I have been looking at Redefine since the beginning of the year and found out about Redefine International(RPL) 2 or 3 weeks ago. I like RPL because it gives me the exposure to real estate that I want plus the international exposure I want. So I invested in it. RPL will form part of my core with DIVTRX making up 25% and RPL making up the other 25%.
If you remember from last week, DVTRX made up more 70% of my portfolio and I was going to decide whether I will sell some of it to bring its share down or I will hold onto those shares and just not buy anymore as I add more cash to my portfolio. Well I decided on the latter. I will keep the shares and only buy RPL and LTS shares until DIVTRX's share of my portfolio has gone down to 25%.
Change number 2 involves the satellites. Looking at all the ETFs that make up my satellites I have come to the realisation that there are just too many. I am sure the more experienced investors of you looked at that from the start and felt the same. Right now it is simply true. If I were to get a buy signal from the LTS on all those ETFs I will simply just not have the cash to actually buy into all of them. Thus the following ETFs have been cut:
STXRES: I have never been all that interested in being invested in resources. They are just too volatile and this is especially true for SA resources. Only added this ETF because it is one of the 4 or 5 ETFs that Mr Brown uses the LTS for. But I don't care so much for it so it is gone.
PTXSPY: Since I now get my exposure to real estate through RPL I have no need for the PTXSPY.
DBXUK: This was not an easy choice but I had to dump one of the DBX trackers. Whenever I will buy into any of the satellites, it will not be with ridiculously large sums of money. Thus with the DBXUK at over R120 a share I just felt I could get more bang for my buck with the other DBX trackers.
I might drop another 1 or 2 in the future but that's all for now. As for the rest of them, this is where we stand:
STXIND: 30EMA not above 60EMA. Check back next week.
STXFIN: 30EMA not above 60EMA. Check back next week.
DBXUS: As mentioned last week, if the price is up I will buy. Well we are way down and the price is barely above the 15EMA. So no buy. Maybe next week.
DBXJP: 30EMA above 60EMA. 15EMA not above 30EMA. Check back next week.
DBXEU: 30EMA above 60EMA. 15EMA not above 30EMA. Check back next week.
RMBMID: 30EMA not above 60EMA. Check back next week.
Still haven't managed to dump the NFGOVI. The price keeps hovering between R48 and R48.50 which it has been doing for all three months I have owned it. Really regret investing in this pile of crap of an ETF. Luckily I haven't gotten any buy signals on the LTS yet so I can still hold onto it for a little longer and hope it goes up a bit. If it goes above R48.60 I am selling. At that price I won't break even anymore but it won't be such a huge loss.
Portfolio:
DIVTRX 62.82%
RPL 9.59%
NFGOVI 25.65%
Cash 1.94%
P.S. The reason the DIVTRX have gone down from 70% to 62% is because I added cash to my portfolio which I then used to buy the RPL shares. As I explained I will do above. ;)
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Interesting, I'll have to do some reading on RPL. Do you know what the 5 year returns were like, and what the current yield is?
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Interesting, I'll have to do some reading on RPL. Do you know what the 5 year returns were like, and what the current yield is?
5 year returns(dividends not included) was roughly 40%
Current yield is 5.4%. Take this with a pinch of salt though cause I am still new to investing and I might be providing you with the wrong numbers. Maybe some more experienced investors out there can answer these questions better?
EDIT: The 40% returns were over 2 years and not 5 years. I pressed the 5 year button and then did the calculations without actually looking at the dates. Even though I chose a 5 year chart RPL has only been listed on the JSE since 2013 so that is the furthest back my chart would go.
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What software or website are you using to monitor the 3 MA's for triggers? Take it your using the monthly MA's and not the daily?
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Why the single property share like Redefine instead of PTXSPY or PTXTEN (which is equally weighted) and has Redefine plus a few more?
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What software or website are you using to monitor the 3 MA's for triggers? Take it your using the monthly MA's and not the daily?
Not using any software. Just making use of itradedata.co.za. And I am using daily MAs.
Why the single property share like Redefine instead of PTXSPY or PTXTEN (which is equally weighted) and has Redefine plus a few more?
I think I can get better growth and dividends by investing in a single REIT compared with a REIT ETF. Put it down to my naivety. But even more importantly than that I do not want to be invested in SA real estate. If I were to invest in the ETFs I would be heavily invested in SA real estate and only a little bit in offshore real estate. Then finally I have been looking at opening up an offshore savings account with FNB but it is just too much of a hassle. So buy investing in RPL it is like having an offshore savings account which can give me better growth than a normal bank account would have.
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Another Wednesday and it is time to look at our LTS. Before we get to that though, there will be two more changes to the portfolio I would like to share. They are both changes I decided to make after listening to the Just One Lap podcast this week.
The podcast was all about small and midcap companies. One of the companies they discussed was a company called Santova. It is a company that deals in supply chain management which in my opinion is just a fancy way of saying logistics. Anyway, I decided to take a look at this company and this is what I found:
P/E 9.68 (I liked this very much)
P/BV 1.8 (0.3 higher than where I would like it to be but didn't bother me too much)
DY 1.42% (Pretty low but, again, not too bothered. I have DIVTRX and RPL who are both good dividend payers. I would invest in this company for the growth and not the income. Apart from that they have consistently increased their dividends over the past 3 years. Not by much but still it is a good sign)
International Exposure: Operate in SA, UK, Netherlands, Germany, Australia and recently opened up shop in Ghana and Nigeria. So I get my international exposure I like so much.
Needless to say I liked what I saw so I invested and this investment will now form part of my core together with DIVTRX and RPL.
The second change is with regards to RMBMID. During the podcast they discussed it and the guest gave a good explanation as to why it might not be the best of ideas to be invested in the midcap index as a whole. Thus the RMBMID is being cut as well from the LTS. As for the rest, this is where we stand with them:
STXIND: 30EMA not above 60EMA. Check back next week.
STXFIN: 30EMA not above 60EMA. Check back next week.
DBXUS: Price no longer above the 15EMA. Check back next week.
DBXEU: 30EMA not above 60EMA. Check back next week.
DBXJP: 30EMA not above 60EMA. Check back next week.
Just a quick recap of what else happened this week. Added more cash to my position so the DIVTRX's share of my portfolio dropped a lot. Well that is due to the cash being added and the fact that the DIVTRX have been absolutely killing me since Friday. Added to my RPL position so its share grew and is now hovering around the 25% I planned for it. Got tired of the NFGOVI not reaching the price I wanted it to reach so thought I would take a gamble and dump them. Gamble did not go my way but at least I got rid of em...or most of them.
Portfolio:
DIVTRX: 50.55%
RPL: 29.31%
SNV: 5.84%
NFGOVI: 0.72%
Cash: 13.49%
See you guys again next week when I will also update how the portfolio performed as a whole for the month. It is not going to be good :wall:
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On the plus side, DIVTRX will be paying out dividends soon :)
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I am a day late so I apologise. I was a bit busy yesterday and just didn't have the time. But unfortunately I have to say I won't be doing the Lazy Trading System anymore. I came to a bit of a crossroads with my investing strategy and I had to make a choice. The first choice was to continue with core/satellite strategy and go for the growth. The second choice was to rather invest in undervalued stocks with high dividend yields and go for the income. The income can then be reinvested witch would help with growth as well. I decided to go for the income (should have followed your lead from the start Mr_Dividend). I think the LTS is good if you got some extra money you want to play around with but at this early stage of my investments I simply do not have that extra money and I just think it is a more sound strategy to invest in solid companies that pay good dividends. Like I said those dividends will be reinvested and thus provide the whole compound interest experience which in the long run can only do me good.
For all the people who were following this (which I am sure were not that many of you anyway) and hoping to see how well the LTS work I apologise. I will probably still post once or twice a month to let you know how my portfolio is doing and if I found something new to invest in. With that said though I will most likely stick with the 3 companies I am invested in right now and, as long as I feel their shares are undervalued, whenever I add cash to my position it will go into buying more shares in those companies rather than buying shares in a new one.
I still have my DIVTRX shares but over time I will sell them all and invest that money in RPL, TEX and SNV instead. RPL and TEX will make up the greater chunk of my portfolio, about 90%, and SNV the other 10%. SNV does not really pay that high of a dividend but they have steadily been increasing it every year for the last 3 years and apart from that I feel the have great growth potential. So I guess that will be my one purely growth investment ::) With their shares being as cheap as they are it means I can throw my big bills towards RPL and TEX while throwing my small change towards SNV.
Anyway, as things stand this is what my portfolio looks:
DIVTRX 50.07%
RPL 28.96%
TEX 14.43%
SNV 5.91%
Cash 0.63%
Growth for SEP: -1.9% :wall: (DIVTRX really killed me this month!!! :'( )
Growth since inception: -6.61% :wall:
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I find it quite difficult to quantify how one goes about reinvesting ones dividends back into the share declaring the dividends
Examples ( I am using these 2 companies as they recently paid dividends into my personal trading account)
Bidvest dividend -R 3694.95 (after withholding tax) Bidvest price R 330.97. Re investing the dividend and paying broker fees would result in the purchase of 10 Bidvest shares
Cashbuild dividend - R 2856 (after withholding tax) Cashbuild price R 310.00 Re invest the dividend and paying brokers fees would result in the purchase of 8 Cashbuild shares
To me the more sensible route is to allow your dividends to accumulate and then invest further into one of your holdings or expand your holding by investing into another counter. The essence of reinvesting into the counter which created the dividend is a costly way of increasing your holdings. Also in our volatile market the benefit of investing the dividend immediately could be wiped out very rapidly, to me it makes more sense to hold the cash in the trading account and buy on dips to gain a greater advantage on pricing.
From my own personal perspective I don't ever plough back my dividends into the counter declaring the dividends - I use it to diversify my portfolio or just purchase more shares in a counter that has performed well over a lengthy period
It does depend on what your strategy is at the end of the day - mine is not concentrated on dividend streams but rather capital growth which will ultimately have a bearing on dividend growth - but I rather see dividends that my shares attract as partial offsetting of CGT at time of sale of any of the shares I hold. I do record dividends earned merely as a bi-product of investing in shares
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Well I guess there are some things that need be clarified. The most important thing to understand is that I will be adding considerable amounts of cash to my portfolio every 2 to 3 months. So if I get dividends paid out to me I will wait until that cash has been added to my portfolio and then I will use that cash combined with the dividends to buy more shares. I will not buy shares if the dividend amount only amounts to a couple of thousand rand as I understand the fees involved with buying shares will definitely decrease the value of the purchase. Buying in bulk will be more worth my while rather than getting the dividends, only buying a small amount of shares, and then later purchasing again when I add cash to my portfolio. The fees will destroy me.
Also, as I mentioned, before I buy more shares in any of those companies I will do my due diligence and see if the P/E, P/BV and DY are still at acceptable levels to make the purchase worth it. If not I will look for something else to invest in or just hold on to the cash until those indicators have gone back to more acceptable levels.
With that said, however, I still do not think you should knock the whole reinvestment strategy entirely. If you have a large enough amount to invest at the start it can really serve you well and over the long term it can give you good growth. I will give you an example as to how I see it.
Say you have R50 000 to invest. You look at Texton with the following numbers:
Share price - R10 (Which is roughly where it is now)
Dividend Yield - 8% (Which is roughly where it is now)
So you buy 4900 shares of Texton using the extra R1000 (which I know won't be THAT much) to cover the fees. After a year you receive R3 915 after withholding tax. That is what you would have received this year if you had 4900 Texton shares. Now say the share price stayed somewhere between R10 and R11 mark then you use that R3 915 to buy another 350 shares using the rest of the money to cover the fees. The following year, for 5200 shares, you receive R4 420 in dividends after withholding tax. I came to that number by adding 5 cents to the year's dividends. I think that is a conservative amount to add as Texton has, on average, added about 10 cents to the dividend each year. But ok, say this year the price for one Texton share is now between R11 and R12. So you use that R4 420 to buy another 350 shares and use the rest to pay the fees. Over the next year, for 5550 shares you get R4 953 in dividends after tax.
Now I can go on forever but you see what I mean. Over the long run those small increments your dividends grow in can add up to a lot. I also understand my explanation was very simplistic and speculative in its premise but I just did it for argument's sake. I cannot predict that Texton's share price will only grow by R1 a year nor can I predict that their dividend payout will grow every year if at all. But at the same time, if I were to go for growth rather than income, I can also not predict that anything I invest in will grow at all. With each strategy we choose for ourselves we can only do our due diligence to the best of our capabilities and hope for the best. What I like about the income strategy is that even if I don't get growth I will still get good dividends, by investing in something with a high DY, which I can use to buy more shares. And quite frankly, if those shares didn't grow much in worth it serves me much better as it means I can get more shares for my dividend which in turn will mean I can get a higher dividend next time.
I hope you understand my reasoning behind it all and whatever strategy you decide on I hope it works out well for you :)
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You know of course that there is no dividend withholding tax on locally registered REITS## - eg. Texton
Also a number of companies incl. some REITS offer shareholders an election to either receive scrip (i.e. shares in lieu of cash dividends)
or cash dividends. There is no brokerage if you opt for shares (scrip) and usually they are issued at a discount to the ruling share price.
##Applies to local tax residents. Non residents = 15%
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I also hold my divvies until I do my monthly purchases, then I just buy for more.
Incidently, if you use easy equities, there is no minimum fee, so if you really wanted to, you could reinvest immediately.
I'm expecting your new strategy to outdo your old one. Pity we can't compare hypothetical accounts!
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So it's been a month since I changed my approach to a more dividend heavy approach and here is how things are going.
I exited my position in SNV for a not too bad profit and moved that money into RPL. Was a good call as RPL was trading below R11 and is now not too far off R12. I also added a little bit to my TEX position.
The most interesting thing I did though was enter into a position on Freedom Property Fund. FDP listed about a year ago at R1 and is now trading at 17c. Not been a good year for their stock and this a gamble I am taking. Since their stock is trading at such a low price it meant that I could invest a small amount of money to get a boatload of shares. In other words it is money I can afford to lose. The reason I am taking this gamble is because I see no reason why their share should be performing so badly. It is now trading at a good P/E and the P/BV is not bad either. Since last November they increased both their headline earnings (by quite a bit) and their net assets. I dug a little deeper and it would seem there are two reasons their shares are so oversold. The first reason is when the company provided liquidity to its shareholders they all jumped on it and sold out. The reason for this, it would seem, leads into reason number 2. Impatience. It is going to be a while for the company's current projects to come online and start making money and people just weren't willing to wait for that to happen. I might be wrong about all of this but as I said if it all goes south I will lose money that I can afford to lose. I invested only 3% of my portfolio in it. But if I am right and it all goes well I stand to make quite a bit. I know it is not gonna happen overnight but I am in it for the long run.
Current portfolio:
RPL 57.32%
TEX 39.51%
FDP 3%
Cash 0.17%
Performance for October(divs inc): 6.44% :D
Performance since inception(divs inc): -0.38% :wall:
EDIT: Forgot to to mention that I exited my DIVTRX position as well for a small profit and moved all those funds into RPL and TEX
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Still not sure how to interpret the end result of those persons who want to pursue a dividend stream as a form of income. Here's my problem (understanding of course) to get a decent return of more than 7% you may have to be in some risky resources stocks, which will be subject to divi taxes. Investing in property funds which generate a relatively high interest component would eat up your interest allowance per tax directives.
Also to generate sufficient dividends your capital in the market would be substantial and would be upwards of R 3.0 million to get a half decent "income". Further if your capital appreciates (as hopefully it should) once you sell a portion you lose that portions dividend/interest income. You would then have to invest that capital once again into another instrument to replenish the dividends/interest lost
So if this is the thinking behind trying to optimize the dividend/interest stream, then surely shouldn't one be considering dumping funds into an RA or a Retirement Fund for future income off these funds.
Maybe if I understood what the end objective is/was for pursuing a dividend/interest stream as opposed to a capital appreciation model then maybe I could understand the logics of the approach
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@Fawkes85 ... can I ask why you bought FDP? There is potential but the original sellers still have alot of shares than seemingly are being dumped onto the market where possible, thus keeping the price down. Added to this, even more share are being issued.
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Still not sure how to interpret the end result of those persons who want to pursue a dividend stream as a form of income.
Kind of tried explaining it a month ago when you also asked. Apart from that explanation there is not much else I can say. It's just chasing the compound interest effect. For me personally though there is one more reason. I save and invest a decent enough amount each year but I feel it is not enough. I want to be able to invest more than I currently am able to. If TEX and RPL payout the exact same amount in dividends over the next year (which I am pretty sure they will actually increase incrementally) I will basically be getting a whole extra month's salary from those dividends. That's a whole extra month's salary for me to invest on top of what I am already investing. I know I will not always be invested in a fully dividends portfolio but it suits my purpose right now. And you should also remember that just because you go for divvies it does not mean you are not getting any growth. Just like all stocks div stocks grow over time. I guess all I can say is give this a year and ask me again then. Then I will be able to give you a clearer answer on how it all went for me.
Also, once my holds on TEX and RPL reach a certain value I plan to stop investing in them and go back to ETFs. STXIND and DIVTRX probably. With these two I will be going for the growth over divvies option. Then once my investments in them reach the same levels invested in the REITs I plan to stop investing in them as well. I will then go and try to copy Simon Brown's Momentum portfolio. Setting up these three different phases of my portfolio will probably take another year and a half to set up but once it is done I will have a clearer picture as to what strategy I want to follow into the future and this will stop being an experiment.
Of course in between all of that I will probably throw in a few odd balls and gambles as well. Just to keep it interesting.
@Fawkes85 ... can I ask why you bought FDP? There is potential but the original sellers still have alot of shares than seemingly are being dumped onto the market where possible, thus keeping the price down. Added to this, even more share are being issued.
The reason I bought into FDP is because at current prices the P/E and P/BV are at acceptable levels. FDP is now selling at a discount. And they may be dumping their stock and issuing more stock but they won't do it forever. In my personal opinion FDP will be trading at around R2 in 2-3 years time. If I am right I will walk away from this with a big smile on my face.
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Investing in property funds which generate a relatively high interest component would eat up your interest allowance per tax directives.
Aren't property funds now seen as income rather than interest since they converted to REITs?
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Investing in property funds which generate a relatively high interest component would eat up your interest allowance per tax directives.
Aren't property funds now seen as income rather than interest since they converted to REITs?
Not sure, but if it is the case that they are treated as income then there is a further problem as it is likely to put one into a higher tax bracket with little opportunity to reduce once taxable income
Just as an aside - I have yet to meet anybody who has become wealthy by selecting high dividend yielding counters as a source of income, but, I have met many who have become wealthy through share price appreciation. One of the reasons I keep R .5 million on 6 monthly FD's is to get the interest stream, and also to deflate my tax burden with the allowed deduction for over 65's.
However I read that the taxman may do away with this aspect of interest neutralisation
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Not sure, but if it is the case that they are treated as income then there is a further problem as it is likely to put one into a higher tax bracket with little opportunity to reduce once taxable income.
I do not pay income tax in SA so it doesn't concern me. Will just be paying the flat 15% Div Tax.
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@gcr Check the SAC thread http://shareforum.co.za/shares/sac/ to find out about REITS and to see how they outperformed equities by a huge margin over the past 10 years and even this year.
Looks like you missed out on some great wealth creation for fear of paying tax. If you take something like NEPI or RES the outperformance is even higher.
NEPI = 15% withholding tax, so not added to taxable income. RES = locally registered with holdings in NEPI, Rockcastle, Fortress. As RES is not foreign listed income from distributions are added to income (so what ?) but there is no withholding tax.
Take some time to learn about the various REITS, which ones to avoid etc.
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@gcr Check the SAC thread http://shareforum.co.za/shares/sac/ to find out about REITS and to see how they outperformed equities by a huge margin over the past 10 years and even this year.
Looks like you missed out on some great wealth creation for fear of paying tax. If you take something like NEPI or RES the outperformance is even higher.
NEPI = 15% withholding tax, so not added to taxable income. RES = locally registered with holdings in NEPI, Rockcastle, Fortress. As RES is not foreign listed income from distributions are added to income (so what ?) but there is no withholding tax.
Take some time to learn about the various REITS, which ones to avoid etc.
Ta - will look into them
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Backing up what I said (again).
Tax not a worry for me with the right REITS.
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I don't want to hijack this thread but this is what I have established looking at my present portfolio:-
I sold out of SAC September 27, 2007 at a price of R 4.14 and per todays figures the price is R 5.20. Since 2008 it has declared the following dividends 2008 29.50 cents; 2009 29.70 cents; 2010 27.48 cents; 2011 28.53 cents; 2012 29.65 cents; 2013 31.26 cents; 2014 34. 15 cents; 2015 37.68 cents
I then compared this against my Woolworths holdings which I bought at the same time as I sold SACI bought at R 20.93 and todays price is R 103.02
Dividends declared since 2008 were as follows 2008 173 cents; 2009 85 cents; 2010 105 cents; 2011 143.5 cents; 2012 198 cents; 2013 234 cents; 2014 251.5 cents, and 2015 247 cents
On the Woolworths shares there would have been the 15 withholding tax per cycle and dividend payout
So my question to Moonraker - Help me through this malaise and tell me how I could have scored a better wealth return by staying in SAC as the WHL price has gone up significantly since 2007 (Allan Grey had a sell at this stage) yet SAC has gone nowhere in real terms.
What I am trying to get my head around is how REIT are better than equities - because in my mind it all revolves around what you purchase
So happy to learn
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I don't want to hijack this thread
Please do. As things are now I only write on here once a month to give my updates. This means after a month I have to go look for this thread. Helps me if you hijack this thread cause it means it will stay at the top where it is easy for me to find. Also, like I have said many times I am still a newbie. I am still learning and forming my strategy as I gain experience. Helps me a lot when someone more experienced like you come on here and ask questions that haven't even crossed my mind yet.
But now to the defense of REITs. Like Moonraker said, you just need to make sure you invest in the right REIT. SAC would seem to not be one of those so you were wise to get out of it. But a lot of others have performed really well.
As I also said in a different thread, I have always been interested in being invested in real estate. REITs gave me the opportunity to do that without having to go out and take out a mortgage. I avoid debt like the plague and I wouldn't touch a mortgage with a ten foot pole. With a REIT I can just buy into it as I get the funds. It is like buying a house one room at a time. REITs can also provide you with a much better income then a rental property as well as simplicity. With a REIT I don't have to bother with property taxes/levies, homeowners insurance, maintenance costs, an empty apartment cause I can't find someone to rent it out to, or even worse, a pain in the ass tenant.
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I am talking about REITS as a group - Get the right ones and you would have outperformed even a good share like WHL on capital appreciation only, let alone the dividends.
SAC was one of the poor performers until they restructured their portfolio to include affordable residential units. I would not now buy those counters with only or mainly local
property portfolios, but rather those I mentioned, incl. RES because of the part overseas exposure. However these are now pretty much fully valued.
The graphs I posted are fact. Now compare your WHL to NEPI over the time period you mentioned, include RES as well (there are others), and take into account the divs.
FFB has been the phenominal outperformer..
(Retirees should certainly balance their portfolios to include REITS)
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Using your example and figures and R10,000 initially invested I get SAC +_ R5988 and WHL+-R6849 - 15% R5821. So as income stream you would have done better with SAC. Of course, you capital would have grown substantially with WHL around 500% and only around 25% with SAC.
So you would have been better off with WHL - but WHL has been a very good performer in equities - I am guessing in the top 20%( maybe 10%), and you comparing it a very boring REIT - definitely in the bottom half. A fairer comparison would be HYP -but am not going to go through all the sens to hunt dividends!
Of course, WHL has always been a decent divided payer and deserves a spot in a dividend paying portfolio anyway.
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It is obvious that we have distinctly different viewpoints, so here's a proposal which will take the emotion out of the matter and stop it becoming a pissing competition.
Patrick no doubt will run this competition again next year and more than likely assign the same monthly amount over the competition duration.
Proposal
Between January 4th 2016 (the date that we should get our 1st R 100,000) we have until 29th January 2016 to invest the R 100,000 fully into any REIT's or securities of our choice. These instruments may not be sold during the course of the year, but you may add funds to these instruments during the course of the year. This requirement is to in theory not violate SARS conditions whereby you need to hold the instruments for 3 years to avoid being designated a trader.
So in principle these funds are ring fenced within the competition and then o the appropriate day in December 2016 when the competition ceases we can tot up the capital appreciation (Patrick carries both purchase and current price in the competition) and the dividends/interest earned. The dividends/interest declared can be reinvested within the respective counters but dividends of other holding may not be invested in the ring fenced instruments.
Thus at the end of December 2016 we can see what the respective ring fenced instruments achieved in creating wealth
Should sufficient numbers of forumites enter into this aspect of the overall competition we may well pick up some interesting results and from which all of us can learn and make us better investors.
This is not a bragging competition but a mechanism by which we can all learn and can make future decisions with some historic data
So I am keen to be part of this exercise, are there others that would be interested in being part of the "challenge" and maybe Patrick can create a suitable thread just for this year long exchange
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You can consider me in.
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Personally, I think you looking at this the wrong way. I use REITs for income and as a way to diversify my portfolio - for me is like having a rental flat without the hassle. I think you said you keep quite a bit of cash in FD's? I am guessing that's fixed deposits? Why not compare overall returns on FD's to REITS? I, on the other hand, keep nothing in cash.
As you pointed out, it really does come down to circumstances - I retired on VERY little very, young at 40. Besides having to squeeze every last cent as income, I needed that income to be regular and to at least grow with inflation. REITS formed a part of that.
It comes down to :: dividends/yields are a function of the business and the wider economic situation. Share price, although partly a function on the business, is mainly set on the whims of the JSE - IMO. As my money has to last 40 - 50 years I opted to rely on the former - rightly or wrongly.
That said, variety is the spice of life, and have a smaller portfolio where dividend is not part of the equation so contains shares like Taste, trustco, Adapt, DSY and aspen. If I am going to fish, I might as well use a big net!
Personally, I will not get involved with your competition - the time line is to short and it's not about total gain but monthly income - so you need to decide on a yield you want before starting.
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May I perhaps derail this already derailed thread, hope you don't mind Fawkes, but since we have a fair amount of foreigners here, and I myself plan to be a non-resident at some point in future, what happens to tax on a REIT when you're a foreigner?
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May I perhaps derail this already derailed thread, hope you don't mind Fawkes, but since we have a fair amount of foreigners here, and I myself plan to be a non-resident at some point in future, what happens to tax on a REIT when you're a foreigner?
You pay the 15% Dividend Withholding Tax just as you would on any other dividends and will no longer be taxed on your income.
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Another month gone by and here is what happened. Not much. Except for a lot.
Not much happened in the sense that I did not do a lot of buying. In the beginning of the month I added a little bit to my TEX position and that was that. Not gonna do a lot buying in the next few months because sending money home means getting destroyed by bank charges on either side of the border. It costs me minimum R400(depending on how much money I send) every time I transfer money back home. So you can do the math. If I were to send money back home every month I will pay almost R5000 in fees over the course of a year. Thus I will only be sending money back home every three months which in turn would mean I can only buy shares every three months. The next planned transfer will only occur in February and thus I will not have much to report on except for portfolio performance until then.
A lot happened on the performance front. A lot of falling. Both TEX and RPL took nosedives over the course of the last month. From a dividend perspective I know I shouldn't be bothered about it falling as I do not intend to ever sell these shares. Didn't buy them to sell. Bought them for the income. And in fact I should be delighted that they have come down. It means I can continue buying them at a price that provides me with a good dividend yield. Or at least I WOULD HAVE been able to if I had the cash. Will talk again in February when that happens and see where they are then. But with that said it still stings like a maternal defiler seeing the overall worth of ones portfolio go down by that much. But what you gonna do? It is what it is. If there is one thing I learned, anyway, is that I should block out the white noise of short term volatility and keep my eye on the prize that older people refer to as the "long term." Whatever that may be.
So anyway, here is the current portfolio makeup(make-up?):
RPL 55.37%
TEX 40.78%
FDP 2.64%
Cash 1.21%
By how much did things fall this month? By this much:
Performance for Nov(divs incl): -4.28% :wall:
Performance since inception(divs incl): -5.68% :wall:
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I must say, I do not like FDP's name. Reminds me of you know who !!! :frustrated:
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Hey,
Monthly review time. As mentioned last month I did not plan on doing any buying until February or March since sending money back home every month was killing me with fees. It really sucked because TEX was trading at such a discount. Luckily though I did manage to scrape together some loose change in my SA accounts to capitalise on the situation a little bit and I ended up buying a coupla hundred TEX shares. That's all there is to tell.
Current portfolio makeup:
RPL: 53.55%
TEX: 44.18%
FDP: 2.11%
Cash: 0.16%
Performance(divs incl):
December: +8.49% :D
Since Inception:+1.17% :D
I know :) would be more appropriate for a mere 1.17% growth in 6 months but it's my first month that I am up from inception!!! Not even Zuma could stop my portfolio from ending the year on a positive!!!
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For those who question the dividend approach:
http://www.moneyweb.co.za/investing/dividends-both-saviour-and-villain-in-2015/
"It is also important to appreciate just how important dividends were in 2015. The FTSE/JSE All Share showed a dividend yield for the year of 3.17% and the S&P South Africa Composite a dividend yield of 3.28%. In both cases, these outstripped the capital gains on offer."
On the All Share Index dividends would have helped you get a return of 5.1% last year opposed to 1.9% for those who did not reinvest dividends. 7.5% to 4.2% on the Top40.
Not saying the dividend approach is superior. Just saying it has its merits.
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Backtested: Well worth a look for the Divs vs. not camp.
http://www.easystockpicker.co.za/articles/EffectDY.php
To cut a long story short, it seems it doesn't really matter on average, over time.
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For those who question the dividend approach:
http://www.moneyweb.co.za/investing/dividends-both-saviour-and-villain-in-2015/
"It is also important to appreciate just how important dividends were in 2015. The FTSE/JSE All Share showed a dividend yield for the year of 3.17% and the S&P South Africa Composite a dividend yield of 3.28%. In both cases, these outstripped the capital gains on offer."
On the All Share Index dividends would have helped you get a return of 5.1% last year opposed to 1.9% for those who did not reinvest dividends. 7.5% to 4.2% on the Top40.
Not saying the dividend approach is superior. Just saying it has its merits.
Just don't calculate the $ growth for any of those, unless of course you want to cry...
Backtested: Well worth a look for the Divs vs. not camp.
http://www.easystockpicker.co.za/articles/EffectDY.php
To cut a long story short, it seems it doesn't really matter on average, over time.
Great read. That goes along with the global consensus too from my reading on bogleheads. Now knowing that, would the difference have you leave the security of dividend payments for a more tax beneficial capital growth situation?
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Great read. That goes along with the global consensus too from my reading on bogleheads. Now knowing that, would the difference have you leave the security of dividend payments for a more tax beneficial capital growth situation?
It's a tough one, but probably not for one simple reason. Once invested in the dividend method you never really worry about capital growth and having to time your selling, there is no selling. So it's pretty maintenance free and hands off. I like that. Sure, there are some tax advantages, at the same time - I have a fair amount in REITs which negates a lot of that. But not touching and messing with your portfolio is definitely a plus in my book.
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Great read. That goes along with the global consensus too from my reading on bogleheads. Now knowing that, would the difference have you leave the security of dividend payments for a more tax beneficial capital growth situation?
It's a tough one, but probably not for one simple reason. Once invested in the dividend method you never really worry about capital growth and having to time your selling, there is no selling. So it's pretty maintenance free and hands off. I like that. Sure, there are some tax advantages, at the same time - I have a fair amount in REITs which negates a lot of that. But not touching and messing with your portfolio is definitely a plus in my book.
I second that
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Interesting thread this in the sense that the old adage "different strokes for different folks" I can't recall ever reinvesting dividends received on a given counter back into that same counter, other than some 20 years ago it was quite fashionable for a number of companies offering you an option to take your dividend in shares. However the companies soon learnt that it was a nightmare to control the share register and if a shareholder wished to sell out of a counter it was more difficult to sell odd lots rather than lots of 100's or 1000's.
I get about R 50,000 per annum in dividends and I use these funds to but additional shares or augment an existing holding of a particular counter. This methodology may not work for many, but it has worked for me, and, I have been involved in the JSE since 1967
So the reality is that you need to work out a play that suites your requirements - in my case dividend yields play little part in my particular investing strategy, I am more interested in capital growth over an extended period, the dividend is merely a bi product of that growth.
Further with dividends the first you know of when a dividend is going to be reduced or passed is when the sens comes out which is a bi annual event, so the share price could stagnate and it has an impact on the dividend, you have to then make a decision stay with the company and take the lesser dividend, and live with the stagnated price or sell out of the counter. It also seems that those companies which do reduce their dividends, it takes ages for them to get back to previous dividend payments so you could take strain on both fronts - lack of capital growth and slow or dismal dividend returns
Just my opinion on this matter
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@Fawkes85. You and I don't pay tax on gains but we do pay tax on dividends so it will be more sensible to go for capital growth. Unless of course, you are taxed in Aussieland.
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@ Fawkes85
If you don't mind me asking in your thread, did you every have a look at Delta Property Fund?
I am looking at TEX & Tower. Looking for a cash generator of sorts, something that gives me money every year to invest in other growth stocks. Hoping to get ~10% div yield which seems possible.
This will make up 5% of my total portfolio, so I am happy with the risk.
Delta, on its current price has a ~13% yield. Maybe I should split it 70/30 TEX/Delta.
Comments please?
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@ Fawkes85
If you don't mind me asking in your thread, did you every have a look at Delta Property Fund?
I am looking at TEX & Tower. Looking for a cash generator of sorts, something that gives me money every year to invest in other growth stocks. Hoping to get ~10% div yield which seems possible.
This will make up 5% of my total portfolio, so I am happy with the risk.
Delta, on its current price has a ~13% yield. Maybe I should split it 70/30 TEX/Delta.
Comments please?
After I selected TEX and RPL I didn't look at other REITs since I didn't want to continue just investing in the same sector. FDP is just a fun little gamble I am making. Not really an investment thus the reason it makes up such a small part of my portfolio. But I did look at Delta now that you mentioned it just for interest's sake and I don't like it. The P/E is in the minuses which is not normal and it is in the red on it's balance sheet. It is nonsensical for a company to pay high dividends when it is struggling to eke out a profit which it hasn't done since 2012, barely. As I have also said many, many times, I hate debt. I understand that I will never ever find a company that doesn't make/have any debt so I will only ever invest in a company that has it's debt under control. Delta does not. Again, why the high dividend then? I would rather they pay a lower dividend and service that debt. This all, to me personally, points to an irresponsible management team. I wouldn't invest in Delta.
I like TEX. It is very volatile stock but I think it is a good company. It is also expanding internationally which I like. Christo Wiese, who is no idiot when it comes to world of business and investing, gave TEX his vote of confidence when he took a considerable stake in the company which makes me feel comfortable with being invested in TEX.
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@ Fawkes85
If you don't mind me asking in your thread, did you every have a look at Delta Property Fund?
I am looking at TEX & Tower. Looking for a cash generator of sorts, something that gives me money every year to invest in other growth stocks. Hoping to get ~10% div yield which seems possible.
This will make up 5% of my total portfolio, so I am happy with the risk.
Delta, on its current price has a ~13% yield. Maybe I should split it 70/30 TEX/Delta.
Comments please?
After I selected TEX and RPL I didn't look at other REITs since I didn't want to continue just investing in the same sector. FDP is just a fun little gamble I am making. Not really an investment thus the reason it makes up such a small part of my portfolio. But I did look at Delta now that you mentioned it just for interest's sake and I don't like it. The P/E is in the minuses which is not normal and it is in the red on it's balance sheet. It is nonsensical for a company to pay high dividends when it is struggling to eke out a profit which it hasn't done since 2012, barely. As I have also said many, many times, I hate debt. I understand that I will never ever find a company that doesn't make/have any debt so I will only ever invest in a company that has it's debt under control. Delta does not. Again, why the high dividend then? I would rather they pay a lower dividend and service that debt. This all, to me personally, points to an irresponsible management team. I wouldn't invest in Delta.
I like TEX. It is very volatile stock but I think it is a good company. It is also expanding internationally which I like. Christo Wiese, who is no idiot when it comes to world of business and investing, gave TEX his vote of confidence when he took a considerable stake in the company which makes me feel comfortable with being invested in TEX.
Thanks for the feedback. I did go through their balance sheet briefly as well. What made me think it could be "ok", is the fact that you can get the share at a ~33% discount to the NAV.
Anyway, I agree on the debt vs high div yield. I think I might split between TEX and possibly RDF ( Also currently looking fairly good, has a 7.7% div yield )
Mr_D suggested Tower as another option, but I have yet to look at them.
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Interesting thread this in the sense that the old adage "different strokes for different folks" I can't recall ever reinvesting dividends received on a given counter back into that same counter, other than some 20 years ago it was quite fashionable for a number of companies offering you an option to take your dividend in shares. However the companies soon learnt that it was a nightmare to control the share register and if a shareholder wished to sell out of a counter it was more difficult to sell odd lots rather than lots of 100's or 1000's.
I get about R 50,000 per annum in dividends and I use these funds to but additional shares or augment an existing holding of a particular counter. This methodology may not work for many, but it has worked for me, and, I have been involved in the JSE since 1967
So the reality is that you need to work out a play that suites your requirements - in my case dividend yields play little part in my particular investing strategy, I am more interested in capital growth over an extended period, the dividend is merely a bi product of that growth.
Further with dividends the first you know of when a dividend is going to be reduced or passed is when the sens comes out which is a bi annual event, so the share price could stagnate and it has an impact on the dividend, you have to then make a decision stay with the company and take the lesser dividend, and live with the stagnated price or sell out of the counter. It also seems that those companies which do reduce their dividends, it takes ages for them to get back to previous dividend payments so you could take strain on both fronts - lack of capital growth and slow or dismal dividend returns
Just my opinion on this matter
gcr, seeing as you have been in the market for so long, and from your comments, do you think you have been better off chasing capital growth instead of dividends? Thus, did you have specific growth margins for your portfolio, ie 15-20% growth p.a over three years and then cycle the underperforming shares out?
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Interesting thread this in the sense that the old adage "different strokes for different folks" I can't recall ever reinvesting dividends received on a given counter back into that same counter, other than some 20 years ago it was quite fashionable for a number of companies offering you an option to take your dividend in shares. However the companies soon learnt that it was a nightmare to control the share register and if a shareholder wished to sell out of a counter it was more difficult to sell odd lots rather than lots of 100's or 1000's.
I get about R 50,000 per annum in dividends and I use these funds to but additional shares or augment an existing holding of a particular counter. This methodology may not work for many, but it has worked for me, and, I have been involved in the JSE since 1967
So the reality is that you need to work out a play that suites your requirements - in my case dividend yields play little part in my particular investing strategy, I am more interested in capital growth over an extended period, the dividend is merely a bi product of that growth.
Further with dividends the first you know of when a dividend is going to be reduced or passed is when the sens comes out which is a bi annual event, so the share price could stagnate and it has an impact on the dividend, you have to then make a decision stay with the company and take the lesser dividend, and live with the stagnated price or sell out of the counter. It also seems that those companies which do reduce their dividends, it takes ages for them to get back to previous dividend payments so you could take strain on both fronts - lack of capital growth and slow or dismal dividend returns
Just my opinion on this matter
gcr, seeing as you have been in the market for so long, and from your comments, do you think you have been better off chasing capital growth instead of dividends? Thus, did you have specific growth margins for your portfolio, ie 15-20% growth p.a over three years and then cycle the underperforming shares out?
My buying of shares has never been based on dividend returns, only capital appreciation. Dividends earned are dropped into my trading account and then I buy shares which have either done well over the years, or if there is a counter that I wished to buy. The "better" shares will generally show reasonable capital growth and the dividend will increment with their better results. Also in the early days I used to commit 5% to higher risk shares - speculative if you like, however today 5% is too large a sum of funds so I now only commit 2% to these type of shares. In 2005 when I went on retirement I dabbled in installment shares, which limited losses but also achieved slower growth, but at least I could have a wider spread of shares in my portfolio. In those years I also used to sell off 80% of my holdings in a particular counter when the price had appreciated by 35%. These days those shares which have done exceptionally well for me - ADI, AVI, CLS, CSB, MRP, STXIND, WHL I still keep in my portfolio and add every now and again. Some shares CML, MSM, PIK, TAS have been disappointing over the last year or so but I do think they are big enough to return to their higher levels in the next 2 years so I hold them and buy up more every now and again
My objective is to have a portfolio value of R x millions by 2020 and currently I am 66% there so I am on track to achieve this objective. I currently have 2 speculative counters in my Portfolio AET and NUT the former is costing me money because I expect it to be liquidated so I will lose R 21,000, the latter is giving me a profit of R 14,850 but it fluctuates dropping to 1 cent every now and again (like yesterday) and has been as high as 4 cents last year but there is little likelihood that I could dump my holding on the market and they would probably be sold piecemeal so I am holding them.
So the way I operate in the market is different to some of the forum members - but you also need to have cast iron balls in this market. In 2007/8 my portfolio dropped by about R 600,000 in a month, which has now been fully recovered and then some. The last "crash" my portfolio dropped about R 225,000 in a week, but as of today I am about R 100,000 shy of my all time high for my portfolio
I am not a trader so don't sit with the same type of angst that they would and generally keep away from speculative shares and new listings
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Very insightful post. I like the way you think!
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Very insightful post. I like the way you think!
Agree ... :TU:
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I don't want to hijack this thread but this is what I have established looking at my present portfolio:-
I sold out of SAC September 27, 2007 at a price of R 4.14 and per todays figures the price is R 5.20. Since 2008 it has declared the following dividends 2008 29.50 cents; 2009 29.70 cents; 2010 27.48 cents; 2011 28.53 cents; 2012 29.65 cents; 2013 31.26 cents; 2014 34. 15 cents; 2015 37.68 cents
I then compared this against my Woolworths holdings which I bought at the same time as I sold SACI bought at R 20.93 and todays price is R 103.02
Dividends declared since 2008 were as follows 2008 173 cents; 2009 85 cents; 2010 105 cents; 2011 143.5 cents; 2012 198 cents; 2013 234 cents; 2014 251.5 cents, and 2015 247 cents
On the Woolworths shares there would have been the 15 withholding tax per cycle and dividend payout
So my question to Moonraker - Help me through this malaise and tell me how I could have scored a better wealth return by staying in SAC as the WHL price has gone up significantly since 2007 (Allan Grey had a sell at this stage) yet SAC has gone nowhere in real terms.
What I am trying to get my head around is how REIT are better than equities - because in my mind it all revolves around what you purchase
So happy to learn
Tells it all. Even local REIT SAC beats WHL on growth only, let alone both growth and divs. Some of the 'better' REITS (mainly offshore focused) have outperformed even more over one year, let alone over 5years+
So, you still think they are crappy investments ? Sirius is the next one to watch - check the SENS
Sirius final results 31 March 2016
Rental income for the year was higher at EUR55.8 million (2015: EUR45.4
million). Operating profit jumped to EUR76.3 million (2015: EUR48.1 million,
profit attributable to owners of the company soared to EUR54,.7 million (2015:
EUR27 million), while headline earnings per share grew to EUR1.82 cents per
share (2015: EUR0.92 cents per share).
Dividend
The Board has declared a final dividend of EUR1.30c per share for the remainder
of the year ended 31 March 2016.
Outlook
The Company is building a good level of momentum, shown by the increases being
achieved across the key metrics of our business and we are well positioned to
make a strong start to the new financial year. With more favourable terms on our
new debt facilities allowing the Group to make earnings enhancing acquisitions
and the capex investment programme continuing to demonstrate organic growth, the
Board anticipates further enhancements in the new financial year. Due to the
longer term ambitions of the Company and to appeal to a broader base of
international investors, the Company is considering making applications to move
to the main markets of both the LSE and JSE exchanges during the course of the
year and will be consulting with its advisers and major shareholders in the
coming weeks.
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Moon - explain please what constitutes growth SAC today closed at R 4.96 and Woolworths R 85.69 since I last posted prices.
What growth are you referring to growth in price over a period; growth in dividends over a period; or growth in the components within the counter i.e. sum of its parts
Not trying to be confrontational - just trying to understand your statement
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Capital growth as reflected in the attached Bloomberg chart. You have selected WHL a quality retail stock, and to compare apples with apples leave out SAC, and use the comparisons with RES, NEPI, ROC, SRE to name a few. Remember, none of these, being dual listed, are fully taxable (except RES which is local) - they are only subject to 15% withholding tax as mentioned often in the past. What is surprising is that even the much maligned locally listed SAC was able to comprehensively outperform WHL over the past year on capital growth (despite the adverse economy and higher bond yields) plus your current (historic) dividend yield for SAC is 7,98% (or 4,7% after tax if you are in the 41% marginal tax bracket - there is no withholding tax payable on locally listed REITS).
Most of the REITS are currently fully valued, as is WHL, and very dependent on the economy and the correlation with long bond yields. They have done me good over the past 12 years.
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Moon - I hear you, and concede that we follow different strategies to achieve our own particular goals - the end goals are thus pertinent to our own end goals. My share portfolio is not used in any sense to augment my pension, as it is more than adequate to meet all my needs and I ensure that I live off that pension without tapping into my other investments.
So circumstances dictate what strategy we follow - my reality was having to sell off some of my parents investments half yearly to meet the diminishing value of their pension and meeting accommodation and medical expenses - so in essence that was a wake up call for me. Also I am totally averse to using capital to buy anything and would rather use my bond, car loans, and overdraft to meet capital needs - but then I was a banker for 40 years so engineer loans that are beneficial to me.
I don't intend posting on this thread in the future simply because it will serve no purpose for me to express my view which may well be diametrically opposed to other investors on this forum - and what works for me may not necessarily work for others, or their circumstances. The only thing I will say is that people need strategies (review occasionally) and goals and milestones - and they will achieve what they set out to achieve