Mine is parking our SMSF cash in our IP offset account at 7.290%. Risk free, returns a premium that doesn't attract taxes, on-call when we do decide to enter a market.
Apparently, the positions are so defensive that it is with an 'abundance of caution' that no information is to be shared in a public forum. Classified. Oops, I said way too much already. Disclaimer: I am NOT SilverNGold. ***hacked***
Investment in "essential" and crucial services that are necessities to society then gold and to lesser degree silver...Protected offensively with a wide range of ranged and melee weapons strike at 1st sight and leave no prisoners, witnesses or a single fingerprint from their grubby hands on our precious treasures
I was listening to a podcast yesterday, the guest suggested the etf USFR would fit the bill as a defensive asset.
To fit the criterium I presume any third party investment is not defensive. It would need to be hard assets such as home property, food, gold, silver, hard cash.
These are my criteria for a defensive investment: 1. protects capital 2. provides a regular return 3. is on call Essentially, a defensive investment is an allocation of funds to an investment that provides protection from losses, grows with time and is easily sold into a highly liquid market. So looking at the offset account it ticks all boxes, the etf ticks all boxes in my eyes however some may consider the risk of having funds managed by a third-party to be too great. As far as the other suggestions go, they don't meet my criteria though hard cash would nearly make it but I'd rather see it doing some work for me eg earning interest. I would consider trading out of a defensive asset say cash in the offset account for a different asset class such as property or silver when the market for those assets becomes more conducive to making a gain and I am willing to take on more volatility in order to make more gains (beta). I don't consider food or education to be defensive investments though I do stockpile fuel and other consumer staples during cyclone season. But I run them down when the threat is over. Security systems, dogs and other protective measures tend to come at an opportunity cost so they don't meet my defensive investment criteria. Though again in my stockpile there is a stumpy tail red and a neo mastiff. They don't get run down, though I'll admit that the urge is there sometimes.
Prior to 2023 my most defensive investment was precious metals, prior to 2019 it was the cash I had in the bank. Its only recently that I had engaged in stock investments. The low risk ETFs that I've chosen I would consider my most defensive at this time (I am still learning). I would like to participate in handling a SMSF for myself and my family, however my understanding of the requirements and rules surrounding them prohibit that as an option for the foreseeable future. I think its rather poor (pun intended?) that the barriers for entry to a SMSF are so high, a discussion worth having in another thread perhaps? Looking back on my journey so far to upping my financial defences so to speak, I cant help but notice contributing factors that determined my late arrival to this position. I feel that family plays a majority role in determining not only your immediate outlook in the early years towards investments but also the pursuit of financial literacy as a whole. Growing up, my family was at the bottom end of middle income, I do not blame my parents or my upbringing for the feelings I have today of being so late to the party of diversifying my financial situation. I kick myself for not seeing the potential sooner. Is what I've just described a fair assumption of the majority of people who do not see or want for a more secure future guarded by better defensive investment choices? I'm curious as to why you consider Education to not be a defensive investment? The ROI maybe to low compared to other forms of investments no doubt. I suppose it depends on how you define/see the other criteria you mentioned. How would you categorise it instead?
I think in part they're a response to pressures from retail and industry funds, combined with the fact that some people are just piss-poor managers of their wealth or just downright shady. But the regulatory hurdles do add up to thousands of $ a year in compliance costs. And that doesn't sit well with me to some extent as it's the government that has introduced legislation around auditing, insurance, storage of assets, fees for annual revues etc and then they have the nerve to insist we pay the fees for compliance. Reminds me of those Barons on the Rhine. It's probably just down to my definition. Education is the process by which I would maximise my income/wages ie opportunity, investment is what I do with my excess income after I've earned it.
Nothing like a bit of philosophy at 8:00 am midweek is there? In the nature v nurture debate I lean toward nurture as an explanation for the outcomes average people find themselves in (of which I class myself). So initially family and later peers mould our perceptions of the world and the outcome of that which are our values. The talented seem to be laws unto themselves and thrive/destroy themselves in spite of the environment in which they find themselves. I have great admiration for anyone young or old who actively seeks to tread new paths. I like to think I do that too now though I wish I had started earlier, however I try to avoid looking back on my life with regrets.
Mine was recently purchasing coal shares in Yancoal. Yancoal Australia Ltd engages in the exploration, development, production, and marketing of metallurgical and thermal coal in Australia, Japan, Singapore, China, South Korea, Taiwan, Thailand, and internationally. It owns 95% interests in the Moolarben coal mine located in the Western Coalfields of New South Wales; 100% interests in the Stratford Duralie mines located within the New South Wales Gloucester Basin; 100% interests in the Yarrabee mine located to the northeast of Blackwater in Central Queensland's Bowen Basin; and 80% interests in the Mount Thorley mine and 84.5% interests in the Warkworth mine located in the Hunter Valley region of New South Wales. In addition, it owns 100% interest in the Ashton mine located in the Upper Hunter Valley region of New South Wales; the Austar mine located in New South Wales; and 50% interest in the Middlemount mine located in the Queensland's Bowen Basin, as well as holds interest in the Cameby Downs mine located in the Southeast Queensland, and the Hunter Valley coal mine located in the New South Wales. The company was incorporated in 2004 and is based in Sydney, Australia. Yancoal Australia Ltd is a subsidiary of Yankuang Energy Group Company Limited. Key Metrics PE ratio 2.28 PB ratio 1.01 Dividend yield 19.79% Beta 0.22 The dividend yield last year was around 17%. I purchased shares in this company just 5 weeks ago and the next payout in April will yield a cool 11.5%. I expect the end of year final dividend will be another 11.5% so that will be a return of 23% for one year in dividends. Of course there is no franking credits but a nice little earner if you have other accumulated losses to offset the tax.
I think this is really smart. There's a shed load of things that could happen in the near future that would make a ton of investments risky. Not paying 7.29% interest on your investment property (or part of it) debt in this environment is very smart.
I come close to buying Yancoal but the debt they hold is to much for my liking in current economic climate. So keep a close eye on them.
