What are your Investment Rules?

[kiora]

Two NZ shares brought for grandson's long term hold
Portfolio already up 16.44%

[kiora]

Ouch
Thats not much saved for retirement

"Will Gen X ever be able to retire?"

https://www.rnz.co.nz/news/business/...y+26+July+2024

[kiora]

And independant of "the bank" & financial advisers

"Charlie Munger Said 'The Point Of Getting Rich Is So You Don't Have To Get Along With Other People' – He Wanted The Independence, Not The Ferraris"

The bank should want to come to you,not you to them

https://finance.yahoo.com/news/charl...154510380.html

“Well, probably because it suits my nature. But I didn’t really enjoy the three and 30 business. Once I had enough money on my own, I’d rather just operate with my own money. That is a much better way of doing it than being forced to sell, being forced to deal with investment bankers, being forced to deal with investment consultants, being forced to deal with venture capital. To hell with them. Who wants it? You don’t need other people. The point of getting rich is so you don’t have to need other people, so you don’t have to get along with others.”

[kiora]

Who's learning from past mistakes?

4 fundies share the lessons from the first stock they ever bought

https://www.livewiremarkets.com/wire...THE%20INSIGHTS

"Warren Buffett’s first purchase.

Unlike many of us who started in our 20s or later, Buffett (unsurprisingly really) was a precocious 11-year-old and the company itself a solid natural gas company, Cities Service Preferred (aka not the early equivalent of Minecraft…). He claims he learnt to buy and hold from it. It’s a lesson he has clearly applied to investing for Berkshire Hathaway."

"My own first stock was Macquarie Group, purchased at lows during the GFC and it taught me that if you know a business has solid fundamentals, you can ignore the noise.

“Just because a stock has dropped a lot doesn’t necessarily mean it is cheap. The importance of a business being able to sustainably fund itself is underrated,” says Clark.

"incredibly good balance sheet and management team, they are very good at creating shareholder value and they are moving into new areas, particularly in digital that could see the earnings number accelerate. The valuation is also reasonable,” "

"What did he learn?
“It’s important to invest in a company for its future and not to be too reliant on backward-looking financial statements,” Datt says."

“Companies in essential industries with strong cashflows, solid balance sheets and that are priced at modest earnings multiples,”

When is hype, hype?
"“Don’t just fall in love with the stock, you need to take profits along the way and sell to the hype,”
Jennings says."

So often the turn around point,recapitalization aka SKL

"“The worst thing you can do is panic and sell at the bottom,” says Wayne, noting that he also learnt that taking up rights Issues can pay off."

"“CSL ticks all the boxes and goes back to the idea of compounding over time. It has nicely compounded earnings year after year, likewise it has compounded revenue growth,” says Wayne."

The key lessons to take out from the experts
Take profits along the way
Look to the future of a company
Make sure a business can sustainably fund itself
Hold course and don’t sell at the bottom

[kiora]

What is the catalyst for turn arounds?

https://www.marketscreener.com/quote...6979/finances/

https://finance.yahoo.com/news/1-war...083700190.html

Rarely :"synergies and cost savings" ?

More interesting ? "annual operational savings by 2027, largely driven by investments in AI tools and supply chain enhancements that simply weren't available until now"

"It's not just greater efficiency now working in shareholders' favor, however. The company's also giving more thought to meaningful innovation"

[kiora]

"The Junk in Your Index Fund Is Costing You Big-Time"

https://www.msn.com/en-us/money/mark...me/ar-BB1qFqwR

"During a recent surge of investor interest in neglected small U.S. companies, Russell’s index got almost all of the ink. Since July 10 it has trounced the previously red-hot Nasdaq 100 by more than 17 percentage points. Pretty much anything with “small cap” on the label has worked for that tactical trade.

But investors in the category for the long haul should consider how companies get into their fund. The less-followed S&P 600 small-capitalization index—dating to 1994, making it seven years younger than the Russell 2000—has only about $137 billion tracking it. By screening for profitability, though, it has beaten its more popular competitor by more than 700 percentage points since then.

Index funds—and beaten-down small-caps specifically—might well be the cure for recently sagging portfolios. Just read the label carefully."

[kiora]

This is not investment advice
My understanding is that it would be a "high risk" portfolio
My understanding is that the "portfolio" value could be volatile
My aim is to maximise returns over 60 years


For the GRANDSON PORTFOLIO:Aiming For CAGR of 15%

Requisite for 60 yr Time Frame
Minimise drag on performance therefore

NO
No/minimal trading
No Fees
No Hedging
No Funds with "junk companies"
No cash
No bonds
No property
No dividend drag
No/minimal brokerage Fees
No Bid/ask spreads
No foreign exchange fees
No/Minimal Rebalancing

"ETFs are funds in which you can buy and sell units on the share market. Hence, besides the management fees paid to fund managers, there will be other trading costs incurred. For example brokerage/trade fees, bid/ask spreads, and foreign exchange fees, when buying or selling ETF units.

By comparison, with unlisted index funds, you purchase units directly with zero transaction fees. You receive the full value of a unit, not a premium when buying or discount when selling to a market maker as the usual facilitator. Overall, the difference between our fees of 0.25% p.a. and the management fee of the Vanguard fund at 0.03% can be more than outweighed by other costs.

Moreover, listed investments are not always as tax efficient as some unlisted investments. Thanks to unclaimed tax benefits, higher dividend tax rates and dividend drag, NZ ETFs can often cost NZ investors more than they think."
https://www.moneyhub.co.nz/kernel-vs...ource=hs_email
https://kernelwealth.co.nz/blog/sp-5...ld-i-invest-in

Fund Preference
Tax wise:Any "fund" to be Pie Investment Entity
Limited risk of any takeover
Intergenerational
Minimal need for investment intervention
Stay focused


Minimal number of Investments in Portfolio
Three, one of which could be a "fund",definately no more than ten

This "Portfolio" has ended up with Three investments
One of which is a fund.
The "S&P Global 100 Ex-Controversial Weapons Index" look interesting but the data only went back for a limited time.

Final,For now, "Portfolio Allocation"


60% Share 1:An accessible public company that is essentially a private market fund
20% Share 2: New Zealand-based platform technology company
20% Fund: Australasian fund focusing on earnings growth

Could potential returns be improved?
No doubt,but I am satisfied with it for now.

[kiora]

"Dambisa Moyo offers a basic framework for assessing the risk of new bubbles and their potential spillover effects"

https://www.interest.co.nz/investing...y+29+July+2024

"From an investment perspective, two factors can provide an early warning of where and when a bubble might burst, and whether it will be followed by a market correction or broader economic crisis. The first is the underlying or intrinsic value of an asset (whether it is productive or unproductive); and the second concerns how that asset is financed (be it through equity, cash, or a substantial degree of leverage)."

" productive asset primarily financed by equity or investor cash" "the lost capital will be largely contained or ring-fenced among the direct investors "
"productive assets funded by debt" "large losses will reverberate through the banking system or capital market"
"unproductive assets are funded by equity or cash, as in the case of much cryptocurrency investing" " the equity/cash financing implies that the spillovers will be contained."
"unproductive assets financed by debt. The prime example is the subprime mortgage crisis that erupted in 2008-09" "the manner of financing through mortgage and debt markets meant that the collapse in house prices would trigger a chain reaction"

"roughly 70% of leveraged loans and mortgages in the US are now held in the shadow banking sector, where institutions take on debt and provide financing without being subject to traditional banking regulations, and without recourse to emergency federal bailout facilities should they become illiquid or insolvent"

"A system with low visibility regarding the sources and forms of capital underlying many investments is a risky one. Greater scrutiny of unproductive, leveraged assets is crucial to avoiding a financial crisis"

[kiora]

"Management choices that help great businesses stay great"

https://www.livewiremarkets.com/wire...THE%20INSIGHTS

"Fade is common, but not universal."

"1. Price to deliver great value. Don’t be greedy.

Great businesses are often essential to their customers and for that reason they have pricing power, at least in the short-term.

Businesses that remain great don’t use that pricing power.

2. Invest to grow. Profit margins don’t rise forever.

To remain great, a business must grow.

3. Exit underperforming areas.

Staying great requires strategic discipline and sometimes uncomfortable decisions."