Following the advice I got earlier this week, I have my next question. After EOFY I plan to take over management of my portfolio as I am no longer prepared to pay extortionate fees. I have been managing 2 smaller SPA investor portfolios (one on the ASX the other on the US markets) as practise in between educating myself to prepare for this (quite exciting) moment. The portfolio I will be taking over consists of about 20 equity positions, mostly on the Nasdaq but with a couple on European markets. Many are stocks that SPA3 tracks, a few are not. Of the SPA3 equities some are currently open, others are currently closed. The equity positions will be moved into my Australian based account so as not to immediately trigger a CGT event. What I am struggling a bit with is how to convert the portfolio into an objective SPA3 portfolio. Stocks that are currently open on SPA3 are easy, I can just hold until there is a sell signal but I was wondering if anyone had ideas on how to approach the rest. I think I need to assess each stock on merit, see how close the current value is to potentially hitting a buy trigger but I was just wondering if anyone out there had experience in making this sort of transition that they would be prepared to share
Thanks in advance
My following thoughts should not be taken as advice as I am not qualified to give it…
Is your portfolio in your name or a trust or smsf? That may make a difference to cgt considerations. Regardless, with those stocks you hold that are not in the SWS universe (or even the some of the ones that are), you may want to consider other things such as writing options etc to prevent cgt in the event of selling.
Looking to see if closed SWS stocks are close to rising above the stop line is a good idea, but be mindful that anything can happen.
With the US stocks, you may want to consider transferring to a US broker (such as Schwab or Interactive brokers) where brokerage is free or miniscule, and you don’t have currency conversion costs on every trade. SWS has a hedge strategy (optional) if aud/usd cross rates concern you.
Once have considered the tax situation with your current holdings, here are some pointers to try to make objective buy/hold/sell decisions:
You know what to do with the stocks in the SPA3 Investor universe.
For those stocks NOT in the SPA3 Investor universe, try to determine whether the reasons / criteria they were bought are still in tact or not. If not, then sell. If they are, then pre-define some criteria now (if fundamental, that’s fine) such that if they change for the negative this will determine when you sell.
It is important that you become vigilant for both sets of stocks. A suggestion is that you establish a routine / process for regularly assessing the criteria established in 2) above. Perhaps entering these stocks into Portfolio Manager (PM) in Beyond Charts, or some other PM, to keep you vigilant with these stocks.
Over time, as exits occur with the non-SPA3 stocks, you can bring that capital into your SPA3 Investor portfolio, if that’s you aim.
To achieve these and Phillips’s suggestions, document your Investment Plan asap. The process of doing this will raise the necessary questions that you need to answer.
There is plenty of training material in the SPA3 Investor course in the Education Centre. And sample Plans that you can build on.