The 2 stock portfolio.

[XFool]

I wouldn't relish it, that's for sure. No time for all that. However, any future share purchases will be in ISAs, either mine or those of my family. What happens about the WHT then. Do the ISA managers reclaim it for you and is any tax paid on foreign divs. in ISAs?

On the latter, yes, withholding tax may be deducted on foreign dividends paid into ISAs. The tax benefits of ISAs not being recognised overseas.

For USA and Canadian holdings, forms such as the W-8BEN for the USA can be submitted such that the treaty rate (15%) can be applied before receipt as against the standard 30% (from memory). Some brokers support this in taxable accounts (I've no idea if they do in ISAs) and some don't.

The same procedures apply to ISAs as to ordinary accounts. Certainly, for US shares, you can get the witholding tax reduced from 30% to 15% if your broker supports this (e.g. HSDL do for US shares). Being in an ISA is irrelevant to foreign tax regimes.

I understand things should be different for SIPPS, here no witholding tax should be levied as it is recognised as a pension account by even foreign tax regimes. But again, this may depend on broker. I do not know, not having a SIPP.

As for Swiss withholding tax. I'm not aware of a similar procedure. Such that the 35% will be deducted in the first instance. It may then be down to the holder (as against the broker) to go down the route I've briefly outlined. The first stumbling block would be to get the ISA provider to come up with a tax certificate of deduction that satisfies the Swiss authorities. I know, from bitter experience, that these a difficult to obtain from some transaction only brokers in a taxable account.

Edit: Here's another view, this time from viewtopic.php?p=220305#p220305 at How Do I Invest:

A word of warning, foreign shares can cause problems. It's my understanding that using an ISA overcomes many of these. However as I understand it people often find it easier to pay the full dividend "withholding" tax on the likes of Nestle because the Swiss paperwork is so difficult.

I gather from previous comments (on TMF) that Spain is another problem and most just put up with the witholding tax on shares such as BNC.

[Bouleversee]

Thanks, both. Out of interest, I'll ask my brokers what they do as regards tax reclaims for foreign shares. I certainly wouldn't want that faff myself and I haven't as yet looked into the recent performance of Nestle either. It would be for the next generations if at all and they certainly wouldn't want the bother of the tax reclaims either.

[PinkDalek]

Thanks PD. I wish I had bought Nestle when I thought about it but I was looking for more yield. Like you I have now gone off high yielders. ... As I have always said, do not chase yield ...

If I may, I never said I was on high yield nor have I knowingly chased such a thing.

Some of my holdings are now as such but they were never bought for those purposes and were not "dearly bought" at the time.

PD (Not wishing to get into one of those interminable HYP or not to HYP type conversations btw - merely thought I'd try and dispel any possible misconceptions)

[Dod101]

Sorry PD. My comments were not intended as any criticism of you or your comments, but they were intended to show what I think is the flaw in the HYP strategy, although it may be that we are simply in a trough and all will sort itself out in time. Who knows?

Dod

[PinkDalek]

... Exchange rates are also highly relevant.

Here's a random chart for Nestle SA (NESN) in GBP terms, which can be taken back to 1990:

https://www.youinvest.co.uk/market-research/SWX:NESN

Late correction fwiiw. That chart is in CHF!

[Pastcaring]

I missed the end of the tax year,30 June.Looking at the 5 day chart then the price of MQG was $127.41 on 2 July.Bought at $105 around 15 months ago.Dividend of $5.75 reinvested gave a shareholding of 1047 shares for this year.

CBA finished at $82.22, bought at $72.50,dividend of $4.31.

Value total $220k rounded.Purchase price $177.5 k.Return 23.5% rounded for the approx 15 months,more if the one day short was used.

Operate on whole tax years going forward,1 July to 30 June .The first divi for MQG was paid on 3 July,the next one mid December this year.Possibly have 1100 shares at 30 June 2020.

CBA pay in September and march,possibly around 1120 shares on 30 June 2020.

Repeat the same thing for the next 25 years,30 is better.

Checking MQG annual reports from this year and 2010 I see I have made a note in the 2010 report I see I have made a note of $6.50.Whether that is the IPO price or the first DRP price I don' t know,31 July 1996, probably the IPO price..

TSR numbers are supplied by the annual report

MQG from 30 April 2003 to their year end ( 31 march this year ) is $1270, starting at a base of $100.

MSCI same period is $190,base of $100.

For the all ords ( top 500 shares in Australia ) the base is the same $100. The time is from July 1996.

The all odds grows from $100 to $980. I take it no allowance is made for fees and charges.
MQG grows from $100 to $7400.

The annual TSR from both annual reports is given as thus

2005---------- 39%

2006-_---------_- 40%

2/7------- 33%

2/8---------- ( 34%)

2/9 --------- ( 44% )

2/10 -------- 80%

2/11---------- ( 19% )

2/12 ----------- ( 16% )

2/13 ------------ 35%

2/14_------------ 67%

2/15 ----------- 40%

2/16 --------- ( 9% )

2/17 _--------- 46%

2/18 --------- 21%

2/19 ---------- 33%.

I' m sure somebody will be able to think of the name of a company that went bust.

Of course all investment decisions must be made on the basis of " just ask somebody that owned shares in a company that went bust".

If the salesman said you must have a well diversified portfolio, gee who would question it.

Remember your future pension is our future billions in income.

[Dod101]

And your point?

Dod

[bluedonkey]

And your point?

Dod

It's pastcaring.

[mickeypops]

Am I the only one who has tried to read this thread and has just about lost the will to live?

[Dod101]

Am I the only one who has tried to read this thread and has just about lost the will to live?

No

Dod

[colin]

The salesperson said you must have a well diversified portfolio,everybody agrees with it,it must be true

Yes that's about it got it in one.

[Gadgeisbackagain]

I think that two investments in direct shares would be just silly and overly risky regardless of the companies chose.

I have a savings account for my 3 x grandkids and opted for a one share portfolio for ease of maintenance
I bought VWRL Vanguard all world etf.
This is a highly diversified 100 per cent equity invested in over 3000 stocks around the world.

Based on my own Global test portfolio which is benchmarked against various things, I would opt for Vanguard Life Strategy 80/20 for an older investor wanting a global portfolio in both stocks and bonds. This fund has done very well to date against my best efforts although it is only stocks and bonds so is less diversified arguably than my efforts.

Gadge

[Pastcaring]

Moderator Message:
Moved here from HYP-P to keep it on topic.

(FAO Pastcaring, to create a new topic visit the target forum and click the "New Topic" button.) - Chris

Sorry to jump in on this one.I have no idea how to start a new topic so the moderators can move it to keep it factual.

TWO STOCK Portfolio
Now 21 months in

CBA. ( ASX)

And. MQG. ( ASX

The return to date is 34.3% for 21 months.
Reinvesting dividends means there are now

MQG. 1098 shares @ $137.85.Four dividends have been picked up as they pay in July and December.
The return for MQG over the 21 months is 44.1%.Next dividend is due first week of July 2020/

CBA has only had 3 dividends,they pay in Sept and March.The March dividend will bring it up to 2 years.Looking for around $2 a share in dividends.At present there are only 1090 shares in CBA. 1090 x $79.9. The gain for CBA over the 21 month period is 20.1%,with that extra dividend to come

We live in a world of fools that will deny facts every day and insist their delusions are real.They will be along shortly to deny the facts.

On 31/3/20 the portfolio will pick those shares in CBA.Unless there is a crash or a big reduction in dividend then the portfolio should be MQG still 1098 shares until July.CBA around 1120 shares.The two year return can then be calculated The fools of course will still be in abundance on 31/3/20 to insist the facts are wrong, and the fools are right.

Debt reduction should still be pay 5% of the amount borrowed ( $177,500 ).Also run the one day short strategy to reduce that debt faster.The debt should be paid off in 15 years,depending on interest rates

To pay the debt off faster short 2000 shares of each company during the XD period,rather than 1000 of each.This should produce a return of approx $14,000.Pay that straight off the debt.

To sum up if there are no crashes in the period to March then the value of the portfolio may reach $250K. The debt is generated by equity in a home for the lowest possible interest rates Pay it off as fast as possible.

[Deleted]

Moderator Message:
Unnecessarily rude sentence deleted. - Chris

[Pastcaring]

Silly me,forgot .

MQG dividend was $6.10 per share from memory.Company guidance as usual is testing times but possibly an increase in dividends for 2020.

CBA was flat at $4.31 per share,I don' t expect much change in that until the economy improves

The 25 year target is around 3200 shares in MQG using the DRP.Around 6000 shares in CBA using the DRP.

Dividend at the moment is around £6000 per annum.This is reinvested in more shares of course.Wait and see what it is in 25 years time,patience in investing is wonderful.

[Pastcaring]

Late again.Lethargy bordering on sloth.Wonderful way to make a million.

I missed the year end 30/6/20 so 3 July will have to do ( Friday)

Ended at 1120 shares in CBA ( ASX) at $71.57 each

1098 shares in MQG ( ASX ) at $122 each.

A total of $214K,a fall from 30/6/19 of $6K.Down 2.7%..

The DRP for MQG delivered the shares for the start of the year ending 30/6/21 on Friday 3july.19 shares at $104 each.A total of 19 shares,so MQG is now at 1117,with further shares to come during the year .

Start 31/3/18 at ( $177,500)

30/6/19. $220K a gain of 24%

30/6/20 $214K. loss ( 2.7% ).

The debt is now down to $165K.So as at the end of year date 22.9% equity in a $214 K portfolio.

Continue doing exactly the same thing.Pay 5% of the 177.5K and continue with the 1 day short strategy and the debt will reduce quickly .

Target for this year,debt reduced to $160K,around 1130 shares in MQG and perhaps 1160 in CBA.The outlook is very uncertain.

Quick think of the name of a few companies that went bust.

Keep repeating "Jimsusan bought shares in Llyodds Bank.

The VERY important bit,never let facts destroy the illusions/ delusions that have been created for so long,and can never be destroyed.

Then again who would be silly enough to believe in facts,they are just confirmation bias,aren't they?

[Pastcaring]

I forgot,the stock I highlighted and said I would never buy APT (ASX),probably around 12 - 15 months ago,price at $15 approx..

Cruising nicely at around $70 now.I still think it is a bubble.As I said for the traders a great stock,very rarely do I look at it but it seems to move 5 - 10% on the days when I remember to look.

Another year and I may be proved wrong.

Looking at the chart March 2020,down from around $40 to $9 ,then rocket up to $70.

Thank God for experts to guide us with the wonderful EMT,efficient market theory.

[Itsallaguess]

The VERY important bit, never let facts destroy the illusions/delusions that have been created for so long, and can never be destroyed.

I've always been told that returns are only part of the story when it comes to investing, with the other aspect being the risks taken to achieve them.

To me, that's always seemed to be a sensible appraisal of investment-market participation.

It looks like you're happy to report the returns of your two-stock-portfolio, but your attitude to risk seems to be 'I've got away with it for another year', which isn't really acknowledging the risk itself, but how lucky you've been in avoiding it...

Cheers,

Itsallaguess

[Pastcaring]

Half time oranges.

Just under 3 years in the portfolio has a gross value of £140,000,A$250,000,rounded. Your equity is 35 - 36% depending which way you want to round it.

The amusement that reality provides for me,the longer it goes on the more determined the masses are to deny it .

Numbers are

MQG 1127 shares. X $138..48.

The DRP for MQG is completed for this year (Australian financial year).Next shares arrive around 1 or 2 July when the next dividend is paid.

CBA. 1136 shares. X $82.11.Further shares arrive at the end of March in the DRP.

For CBA the short term investing period ( 30 ish years) is coming to an end,and we enter the medium term period.
The result of it is $6K grows to $500K.I of course was silly enough to do that,and more.Imagine,no following the crowd,no rebalancing,tell the salesman exactly where to go.,no " top slice''.The stupidity of rebalance,the share performs well,better sell it to buy more of the cross that didn't perform.

MQQ,I still kick myself for thinking this was a bubble when it listed in 1996,and held off buying it until 2006 approx.During that period it went from $7.50 to the $ 60 ish I paid for it .So $7.50 grows to around $460 - 480K.

Of course the clever people ( the herd of group thinkers,we all think alike,we must be correct) will quite happily repeat that it is luck and confirmation bias.Who would be silly enough to think buying shares in very well run and managed companies could be any kind of a plan.

So first year the return was 24%.

Second year during the mass panic ( 2.7%)

Six months into the third year and the return is 16.5% for the six months.
APT ( ASX) which I highlighted at $14.50 I think, but call it $15,well,$120 last time I looked probably aweek or two ago.Such growth in such a short time.Seems like madness to me.Hopefully for the people that take that chance on it will come through, and I will once again want to kick myself,I wish them well.

Never underestimate how important it is to be 100% honest in all investing.

I may come back in 6 months to take the P and point out reality,I may not,you never know.

Should the headwinds go against this,as I have said,they will crawl out of the woodwork like cockroaches to say I knew that would happen.In that case I will definately be back.

I'm off to have my half time oranges .

Crack on with the dreams ,delusions and denial.Never forget to constantly live in the echo chamber and do everything the salesman tells you to do .

As always the annual reports of those two companies give me the shareholder spread.I sleep so well at night knowing that 99.6% will constantly disagree with me,no matter how many facts and figures they are given.Nothing will shatter their delusions of their perception of reality.

Never forget how important 100% honesty

[Pastcaring]

Real world time again,still never shatter the popular delusions though.

Things went well,better than I expected.We'll get APT ( ASX) out of the way first in case I forget.I think it had a good year,I never really paid any attention.The stock is now in the basket marked missed it,the chance has gone.Finished the year at $118.29.The trading range across the year was anywhere between $55 and $160,low and high. Too hot and wild for me.

Now the way to make a million.Things went well with the two stocks.CBA this time last year you had 1119 @ $71.57.

MQG was 1098 @ $122.02 .Total value of $214 K,down just over 2% from the previous year .Helluva crash that .

Dividends were paid and reinvested so CBA the shareholding increased to 1155 @ $99.49 each .

MQG the year finished with 1127 shares @ $156.91 each .
Portfolio has a value of $292 K. Return for the year of 36.4% .CAGR over the 3 years is close enough to 18% average for me .

So,gross value of £160K @ A$1 = 55p, debt is approx £88K ( $160 X 0.55).Equity close enough to 45% for me ,not bad for 3 years, up £72K.

Wash rinse and repeat for another year,get the debt down to $150K using money you would give to the salesman,and the one day short strategy, and off we go.

This time next year around 1210 shares in CBA,and perhaps 1165 ( 1170) in M QG,all depends on dividends and the DRP price.Same calculations again,same result again. July next year we live in a world full of idiots that deny reality every day .

So we' LL crack on with the popular delusions,madness/ insanity and denial for another year .See what the year brings,a steady 10 - 15% gain or a small loss would be good after the ride for the last 3 years..

So for the herd we'll get the chicken little suits out,run around squawking the sky falls down.The companies go bust overnight,you'll lose all your money overnight .The only way to avoid disaster is to do everything the salesman says and follow the herd..Constant repetition of the same rubbish .

Remember the delusions always have been and always will be real.The facts and reality always have been and always will be wrong.

Another year of doing a Rip Van Winkle impersonation for me .Fall asleep and let markets get on with the insanity .

The noise will wake me up if things happen,then I might buy something,but I would think not LL aziness rules for me .

[spasmodicus]

The word hindsight,really dumb word,always used by people with no idea of reality.

In hindsight,nobody has ever got rich by saving up,having a well diversified portfolio,following the crowd etc.

So what are they going to do,save up,$ cost average,be well diversified,get nowhere,just keep repeating,all obvious in hindsight .

Hindsight

MQG Macquarie group
01/07/96 6.47
05/07/21 157.52
25 year gain 13% CAGR
yield 3.5%

CBA Commonwealth Bank of Australia
01/10/91 7.67
05/07/21 100.28
30 year gain 9% CAGR
yield 2.5%


Why 2 companies? In hindsight, MQG clearly did much better than CBA, so I’d like to hear why a one stock portfolio would not have been better.


regards,
S