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Most liked posts in thread: What's your retirement asset allocation percentages?

  1. Sharkman

    Sharkman

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    currently at about 30% international equities (thru index ETFs), 50% Aust equities (thru direct holdings), 20% short term trading including collateral for short option positions.

    i'm not retired yet, but am planning to do so in the next 2-3 years, aiming for 50% international, 25% Aust, 25% short term trading. probably won't be able to reach that weighting before i retire (can't sell most of the Aust holdings due to CGT) but i'll keep moving towards it by deploying all new funds to international ETFs. i'd like to up the short term trading slightly, as i do intend to get into it a bit more once retired (can't do that much of it now due to work). but might end up actually lowering it instead, if my paranoia over the loss of SIPC coverage caused by the migration to IB Aust gets the better of me.

    i also agree 100% equities is the way to go, but i keep a floating 0-10% cash allocation to allow for some limited market timing/buying on dips. i have a self-imposed rule where if cash rises above 10%, i force myself to make a regular sized dollar cost average into the international ETFs within a week, to ensure i stay relatively fully invested and don't go overboard with trying to time the market too much.

    personal views only, may well prove to be wrong in the coming years, but i'm a bit nervous about Aust's long term economic prospects, hence the much heavier weighting towards international ETFs. despite being a developed nation, our currency and stock indices act like those of an emerging market (both tend to get smashed on risk-off sentiment) and our primary/secondary/tertiary sector weights seem to be drifting back towards resembling those of an emerging market as well (heavily dependent on mining and agriculture, manufacturing fading away to irrelevance, high tech stagnant). i think US is still prime, but looks a bit expensive, all world ex-US seems better value at the moment. so i'm going with a 50:50 split when investing new funds (IVV/VEU).

    another reason is that international equities (particularly US) pay less dividends than Aust. Zaxon you wrote an excellent post in another thread about the viability of selling units to raise cash vs relying on dividends, which i completely agree with. as a 40 year old FIRE adherent, long term growth is still paramount, immediate cashflow not as much. i don't want companies giving me their earnings as dividends, then i have to go to the trouble of re-investing it again (and paying tax along the way). i'd rather they retain most of it and pump it back into their own future growth.
     
    aus_trader, Zaxon, qldfrog and 2 others like this.
  2. Iggy_Pop

    Iggy_Pop

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    I call water assets, airports, electricity assets, toll roads infrastructure. Hold these as direct shares and within industry super fund

    As far as drawdown ,targeting around 3.5 to 4 % at this stage

    Bonds is via industry super fund, hybrid shares, fixed term deposits, high interest saving accounts. As we are in retirement, we do intend to spend on travel, cars etc so use this money to fund these, and do a re-balance at an appropriate time.

    Iggy
     
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  3. sptrawler

    sptrawler

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    To me personally that is the critical thing, there is no point in over reaching your comfort zone, retirement is about enjoying holidays, time with family, doing your hobbies etc it is not about worrying yourself sick over investment decisions IMO.
    Until you are retired and gain a feel for your outgoing costs, take your time and buy wisely, opportunity always presents.
    Like at the moment, the banks are down a lot, and they make up a large percentage of mine and probably a lot of others retirement account. Their dividend has dropped, so do you sell or do you accumulate? If you are fully in the market with very little cash your options are limited.
    So in my opinion, I need enough cash to enjoy my holidays, even if the market crashes.
    I also need enough cash to buy on speculation and accumulation, how much is the question, which brings us back to the personal comfort zone.:D
    If all my shares went to zero, I still have enough cash to get the pension and enjoy retirement, but I am conservative.:xyxthumbs
     
  4. Iggy_Pop

    Iggy_Pop

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    My experience is that through an industry fund using a mix of balanced and fixed interest options for the last financial year, my fees have been 0.5% but returns were around 9%. My share/bonds/cash portfolio outside of industry super. fees were approximately 0.1% from fees within LICS and ETFs, buying and selling shares held directly and returns were 6.7%. For this year, the industry funds have easily out-performed my own holdings. This has been my experience, maybe some are capable of getting better returns than me, but the reality is it is difficult for me to outperform the industry funds. I plan to move to more LICs and ETFs at an appropriate time. I found prior to retiring, my management of shares would be unlikely to outperform the returns of the industry funds. At the moment I cannot put more into superannuation, and having a holding of shares under my control for interest, diversity and keeping a feel for the market. The main learning for me, is while franking credits are good and will always be part of the plan, i will most likely do better out of US based ETFs compared to fully franked aussie shares.

    So my experience is fees are one thing but returns are the key.

    Iggy
     
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  5. Bill M

    Bill M Self Funded Retiree

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    I held bank stocks through the GFC, watched the value drop down during the crash. I had spare cash on hand and when they all offered share top up plans I bought as much as I could. The best play was CBA @ $27, they botched the original plan so they had to revise it and sell @ $26 a share. Both my wife and I topped up as much as we could.

    I've had bank shares in my portfolio all my life, they are darn good stocks. They have all paid for themselves now with their dividends over the years. I just wish I had enough guts to pull the trigger on BHP when they hit $13.50. I remember a staff member of BHP coming on here saying something like "I have been offered a share purchase plan from the company to top up my BHP stocks at a discount, should I buy them?" Most us just said we would if we were in your position. Chances come along all the time but people do nothing sometimes, me included.
     
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