Managed Funds Navra NO LONGER an Income Fund ?

Sim, we might have to agree to disagree on this one too.

Seaview, sorry, didn't mean to take over this thread!

GSJ

 

OK, I am afraid you don't understand anything I am saying!

GSJ

 

GSJ

I am honestly not sure what point you are trying to make, it kind of seems you are getting hung up on contrived scenarios...

Do you want people to agree that it is a bad idea to leverage 100% into a risky/volatile investment returning 10% and the leveraging costs you 9%? Done, this is a terrible idea. I dont think you will find anyone that disagrees with you on this concept.

What I would suggest is that you forget about such scenarios, as they are really pretty useless. Maybe even forget about the terms "income" and "growth", as you seem to be getting hung up on them. Use the term "investment return" instead. That way if you get 15% income, 10% income/5% growth, or 15% growth, your return is still 15%, the only difference being the tax treatment.

What you do with that investment return is up to you.

However your personal analysis of what constitutes too much risk or too much gearing is just that - your own personal analysis.

You cannot just ignore the ability to reinvest income or other scenarios though.

If you are trying to work out a specific situation or scenario, give it to us and lets see what we can do with it.

 

Coopranos,

Then why on page 6, and even earlier before, did you say this in the first place?:

???!!!

'Absurd' and now 'contrived'!

GSJ

 

Does that mean you are an intelligent or skilled investor?, not necessarily - but your prayers certainly seem to have been answered.

GSJ

 

Rubbish GSJ,

Just because SIM has some higher risk more volatile growth funds does not mean he is either intelligent or lucky. (I think I just insulted you SIM, sorry) Anyway, I appreciate how SIM has benefited many on this forum by being transparent with his thoughts on investing and like many of us, I suspect he tries to spread his risk around a variety of growth and income funds. Neither one is wrong or right, just different strategies for different folks, ultimately depending on our investing goals, risk tolerance etc.

Seaview

 

Geez 130 replies on one managed fund.

Can I start a new thread on Platinum Asia and get 130 replies also

How about Hunter Hall

How about Clime Capital

How about 452 Capital

geez!

 

I did not say that if I could make 1% in a high risk fund, I said if I could make 1%. If the 1% was a given, then I would do it.

Again, if you actually have a point to make, make it so we can discuss it, rather than making blanket statements about contrived scenarios.

 

I'm new to this to begin with, and 130+ moves in an argument loses me.

If I'm not mistaken this is a debate between strategies espoused by GSJ vs Others (Sorry I just havent got a handle on a principal respondent).

Would it be possible for each side to give a basic synopsis of their positions at this point, ideally starting from their understanding of a "scratch" position.

 

Actually in my case yes it does look attractive because :

1. If I wasn't invested in it, my money would be earning nothing p.a. rather than 1% p.a
2. NavraInvest means my money remains fairly liquid if I need it again at short notice
3. The risk involved isn't high because of the conservative nature of the fund
4. I couldn't care less about capital growth - as long as there is better than break even when I pay the interest bill on the LOC, and/or when I cash out, I'm happy
5. I don't have to read about the sharemarket in order to know my money is invested in stocks that have been chosen for a reason by someone who knows what they are doing
6. I can potentially make money in a declining market (yet to be fully experienced ) whereas I could do my dough invested in direct shares, even some blue chips

Personally I think the risk of doing nothing comes with much worse consequences than the risk of NI not performing as well as some other potential investments (which may not meet criteria 2 and 3 and 6 from above)

I think it would be worthwhile to list some other potential investments and compare historical and likely performance to NI provided the alternatives :
a) Pay income quarterly
b) Are relatively conservative and not invested in high risk companies
c) Able to withdraw when money needed for other investments with minimal penalty

That's my understanding of the benefits of NI - it plays a part in a balanced strategy, and its flexible. There would have been a day I'd have read comments like some on this thread and sat on my hands in fear because someone had pointed out there are risks involved in an investment. Luckily those days are gone, and the 20% returns (or future 1% or whatever) still get put in my bank account every quarter, and I happily spend money I would otherwise not have had.

So maybe the, um, argument, could get down to tin tacks and list specific vehicles that are potentially better than NI. I'm still looking for one that meets all the criteria. We have some money in Platinum and Colonial now, to spread our exposure, but I've yet to be convinced they're better or worse than NI, but of course they show some good historical returns too.

PS. and my usual disclaimer, I am a 'mum and dad' (just the dad bit, I'm not transgender!) investor that NI is specifically targetted at - hence my simplistic view on things

 

GSJ:

If I'm not mistaken, have you been talking about industrial property over at SS? I have an account over there but haven't posted because... ummm... I'm not sure.

Anyway, some people have been talking about 10%+ yields from CP. What do you think about that for a good alternative? Personally, I don't know where in a capital city you get 10% yields. But if they were out there, I'd much rather the fundamentals of that than some technical trading gimmick.

How's your foray into industrial property going anyway?

 

Sim:

I'm not really sure. I wouldn't think it would be ideal with macro factors starting to be questioned and business earnings starting to taper off.

We own a bit of direct industrial in SW Sydney that supplements our other property quite well, but it would be a nightmare if they were vacated. It's a bit of a double-edged sword; they say it's best to invest in large properties so you don't have to deal with 'transitional' businesses, but then once they're vacated, it can be a pain to find another tenant. We've never had an issue, but they've been good times.

Most CP I see in Sydney is based on sub-8% yields. But there's still talk of 10%+ on the other forums. I like the idea of industrial renos too. Some suburbs have really cheap sq meters and so if you make the place look respectable, you can turn up the $/sqm quite easily. We did one about two years ago, but when we put up the rent accordingly the tenant threatened to leave. We ended up with a compromise (he's still getting an awesome deal).

As for LPTs, there seems to be so much talk of them being too expensive. Plus you have to wonder how much of an LPT they are and how much of a business they are... and how much the market is inflating prices. In theory an unstapled LPT should be priced at around NTA and return the rent. But these days they make 40% returns and are prices well above NTA. That would make me feel uneasy, but nothing some research couldn't fix.

That latest SI article has outlined a couple of LPTs returning over 10%.

Anyway, I'm off to the property expo.

 

Hi everyone,

Just a quick post now as I am short on time, Coopranos and Sim, sorry but I don't think we are getting anywhere. I've made my point several times and in different ways but obviously not getting through. It may be 'contrived', in that I created this example, but this is to illustrate and facilitate understanding of the basic idea behind this particular strategy. If you still think it is 'absurd', or not a realistic or possible scenario, then I really can't help you with further posts and I wish you well in your investments.

iiinvestor, you are right on the money - this 'strategy' of 'leveraging into an income fund' - which is as you know is what I've been posting about - is far better suited for an 'asset class' or 'investment', broadly speaking, that involves commercial or industrial property...but that's another huge topic all-together, and has been discussed already on Somersoft.

Yes, I too prefer the fundamentals of that, than some 'technical trading gimmick'!

GSJ

 

GSJ

It might also be beneficial if you let us know your strategy - what are you currently invested in, your gearing, etc.
That way we might gain a better understanding of where you are coming from in case we have missed something that we can learn from.
After all the purpose of the forum is so we can all put our heads together isnt it?