Forum Archive Index - December 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Woody and Ryan,
 
>
> In my opinion if you have $100,000. Keep it NZ.   $25,000 deposit on
> rent producing property, Seek out Mortgagee reposession, 
> buy it ' Cash Positive '  
>
> $25,000. Good quality shares.  
> $25,000 in Precious metals. Gold, Silver. 
> $10,000 Trading Portfolio US Stock Options. ( Plenty of Internet
> training guides ) if ready I will give you a good Broker.  
>  $10,000 In the Bank 
> and $5,000 Forex trading Portfolio Very high risk but worth risking
> $5,000.
> 

I know that Woody and I have sparred in the recent past.   Now I'm not 
saying that I agree in detail with everything Woody says here, but 
actually I think he is talking quite a lot of sense.

If you live in New Zealand, and you intend to spend your money in 
New Zealand, it does make sense  to have most of your invesments 
paying income in that currency.

Property, bought wisely (not every property is overpriced in a bull 
property market) is a good anchor for a portfolio.  And a good way to 
check if the purchase is wise is to check out the rental yield.   
Personally I favour income shares to do this job.   But this is a distinctly 
New Zealand thing as in most countries the shares will not pay you an 
income that is high enough to anchor your portfolio with as good an 
income flow as property.    'Cash positive' is the key phrase, as Woody 
says.

Shares have a long term record of outperforming every other class of 
investment.   So matching your core income producing assets with 
good quality Blue Chip style shares makes quite a bit of sense.

I am not a precious metal fan myself, but one thing you can say about 
them is that they are often negatively correlated with other shares.  If 
you want to smooth out the returns in your portfolio this is no bad thing.

$10,000 as cash in the bank is an excellent idea, as it means you have 
something on hand to take up those opportunities that Mr Market 
unexpectedly  throws  to you.

That leaves you $15,000 for 'risky' investments.  Something that you 
can have a bit of a punt with, but a suitably small proportion that won't 
destroy you if make some bad calls.

So well done Woody.   I may have to reassess my image of you as a 
wild trader who will think nothing of betting the farm before breakfast, 
betting the house at lunch time and gambling with the shirt on your 
back at dinner time  while surviving on a diet of white rice and baked 
beans ;-).

SNOOPY




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