Seeking Tips in Improving My Shares/Stocks Investing (Stake, IB, Tax, Funds.etc)

amrdeus on 01/07/2022 - 21:04

I currently use NabTrade for local and international shares. I have been investing for a few years now and want to improve. I mostly want to do some long term somewhat safe investing. I've been interested mostly in keeping it simple with $SPY (top 500 US). I'm hoping for long term averaged returns of about 8% (I know we're in a bear market, but I plan to keep averaging down). I'm 36 so can be riskier than something that would get me 2%.

Here are some questions I hope I can get answered:

  • From my research it looks like I should be using Stake for local shares and Interactive Brokers for international shares. Is that best move?
  • I have a decent 50K+ portfolio in NabTrade. Is it worth migrating to the above? Or do I just start new portfolios there? If I'm migrating, what's the rough process for local and international stocks?
  • If I'm buying SPY ETFs. Should I be buying the AUS version for easier tax or should I be buying the international one?
  • Is there something smarter than ETFs? I don't really understand bonds, index funds, super…etc especially in terms of tax. Is there something I should be focusing on instead for somewhat safe long term investing? Like is there an ETF that the Oz government gives tax relief?
  • Come tax time, should I just use Sharesight?

I know that's a lot of questions, any help would be appreciated!

Financial Investment Shares (financial)

Comments

  • Drakesy on 01/07/2022 - 23:00
    +3

    In a recession
    The safest place is a bank atm.
    Or gold

  • Adredocto on 02/07/2022 - 06:14
    +1

    Can share my journey. I'm early 30s chasing financial independence. 100% equities through ETFs.

    Best advice I ever got was Investing isn't sexy, I.e. the ones you talk about at dinner parties like crypto, stakes in restaurants, horses etc are not for me.

    I have a set investment plan and simply save up $s and put into ETFs each month. VGS is my main fund. Read up on them, they track an index by buying a tiny portion of each listed company.

    Rinse and repeat and wait for compound interest to do its thing. Also make sure any dividends are automatically reinvested.

    And remember when the market is down you are buying shares on sale so get more bang for your buck. Ignore the day to day market fluctuations and remember this is a long term thing.

    Jlcollinsnh has a great blog series that breaks down ETF investing if you want to learn more.

  • Adredocto on 02/07/2022 - 06:17

    Haha so my comment ended up being much longer than anticipated. Kinda like this stuff.

    ETFs can give the international exposure you are after and if you use an Aus based one you get prefilled tax return info to make tax time easy

    • amrdeus on 02/07/2022 - 09:30

      I really appreciate it all. This is exactly what I'm asking for help on doing. I'm not after sexy investing, I've already made those mistakes.

      There are just so many options I find it overwhelming. Like why do you go with VGS over SPY? Is there much of a difference? Which brokers do you use?

  • El-Rhi on 02/07/2022 - 06:51
    +1

    Sounds like you need to see a financial planner

  • MrMarket on 02/07/2022 - 08:53
    +2

    Education is your best bet, read a lot of financial papers and books
    Long term investing is pretty boring and isn't that sexy so you need to developed some form of habit and get enjoyment out of it
    else you end up overwhelm with headlines, FOMO and all sort of crazy stuff and bubbles

    ignore most of the stories you hear about people winning big in crypto or xyz stock, the truth is somewhere in the middle and you never know

    ETFs is just a basket of shares or commodities, there is ETF that track the market index or gold or bond or oil or renewal etc..
    Your SPY is ETF tracking the S&P500 index, the Aussie equivalent is IVV run by iShares.

    Stake is cheap so you should be switching to them for Aussie shares, they provide you with the same protection of the other brokers at a fraction of the price.

    you are doing ok, just enjoy the journey and get into the habit of reading and learning

  • skid on 02/07/2022 - 10:48
    +1

    I have a decent 50K+ portfolio in NabTrade. Is it worth migrating to the above? Or do I just start new portfolios there?

    From a risk perspective, it is better to start a new portfolio.

    Is there something smarter than ETFs? I don't really understand bonds, index funds, super…etc especially in terms of tax.

    Unfortunately the answer here is, "it depends". Generally speaking, ETF's are the smartest. The strategic part is deciding how much you'll invest in each ETF.

    • amrdeus on 02/07/2022 - 10:55

      Thanks for that! This brings up a good point. Isn't the point of ETFs that its usually diversified already. I was thinking of just sticking to one (Like top 500 US companies). Is there much of a benefit of diversifying further?

      • skid on 02/07/2022 - 11:12
        +1

        Sticking to one is a valid strategy (I stick to one myself, but the ETF forms part of the total portfolio). You'd buy more than one ETF to capture different markets (Aussie shares, property, tech stocks, as examples).

  • MITM on 02/07/2022 - 22:44
    +2

    36yo, so 30 years till retirement/FI. Time and compounding are in your favour.
    Guessing you have a Super Industry fund your boss contributes to. Salary sacrifice would be a simple and tax effective way to use your income to continue your investing. You can then choose certain particular (mainly Australian-see the list of allowable investments) shares/ETFs to invest in within your fund. They take care of all the admin and tax records etc. and may satisfy your long term investment goal.
    Re: your NABtrading, how much in fees has it cost you over the years ?

    • amrdeus on 03/07/2022 - 15:03

      Great point about tax. I think I'm already contributing more to Super but I'll check.

      I suppose on average, its something small like $60 per year. So in the grand scheme of things not much. But if I moved to somewhere cheaper then I'd probably put in more. Also, that's what we ozBargainers like to think about :).

  • donga100 on 03/07/2022 - 12:24
    +1

    If you voluntarily contribute to super you effectively get a 29.77% return on investment instantly. This is because voluntary contributions are only taxed at 15% as opposed to the 32.5% income tax (+2% Medicare) that most people are paying, even better if you are in a higher tax bracket. It is currently capped at $27,500 per year and comes with the obvious downside of not being able to access it until you retire but if you are looking for long term investment/wealth creation there is not much better in terms of risk/reward. You can invest in all different types of ETFs, commodities, shares, etc. via super and even more complex investment types (property, art, crypto, etc.) if you are willing to self manage.

    • amrdeus on 03/07/2022 - 12:38

      This is a fantastic tip! I'm already doing a bit but can probably do more. I'll look into this for sure! Thanks very much!

      • MITM on 03/07/2022 - 13:58
        +1

        If making voluntary contributions, may as well do salary sacrifice into super, select your choice of investments (though limited/regulated choice) - set and forget.
        As Donga says if you want to self manage, look at www.ESUPERFUND.com.au
        Good value at $1000 pa. But it’s called self manage for a reason.
        You could rollover some of your industry super to get it started.

        • amrdeus on 03/07/2022 - 15:04

          I've never considered managing it myself. I think last I checked it was only worth it if I had a high income (I'm below 100K). What would you say the benefits are?

          • MITM on 04/07/2022 - 10:31

            @amrdeus: High income is FUD from the banks/industry superfunds to keep YOUR money.

            • Full control.
            • High conviction investments (opposite of diversification)

            At your age you probably have other commitments, family, mortgage etc. so you might not want to invest too much now for the long term but should keep SMSF on your radar.
            At this stage if you feel you want to utilise your industry super to hone your investing skills/results/strategy and rollover to a SMSF in the future when you’re confident.

            Remember, you can retire at min 55yo to access your super if you’ve grown it enough to. And nothing stopping you returning to work after retiring.

            So there you go - there’s your challenge - to retire 20 years from now aged 56.

  • dtc on 03/07/2022 - 15:30
    +2

    If you want some good resources on long term investing, google 'financial independence retire early australia' and there is a fair bit of analysis, read through the blogs.

    Of course, it mostly comes down to:
    - keep investing
    - invest ETFs being VAS/VGS or variants on those (ie Australia/international or Australia/US/International ex US). Or DHHF (the simplest) or VDHG as one stop ETFs
    - max super

    In terms of investing in Australian ETFs or overseas, there are tax implications. There is no real need to buy an overseas ETF if you can replicate it through an Australian ETF.

    • MITM on 04/07/2022 - 10:35

      Agree: max super & FIRE (Don’t go crazy though like some do)

  • ChunkyToast on 04/07/2022 - 01:11

    NHC / WHC - pumping out crazy FCF yields right now and I think they will be even in the next 12-24 months. Even if the coal prices come down, they will still be doing well since they have paid down or will have paid down all their debts.

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