This post originally on SMSF COMSEC Thread.

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It is not every day that someone will share with you their modus operandi especially in the field of Financial Investment, but a Doctor friend made this available to me and allowed it to be placed on this Forum. It is not for everyone, but could be of value to those not experienced in the Share Investment field, but who are faced with the wise investment of considerable superannuation funds or the husbanding of retirement funds at the end of one’s working life, but who also want to stay in control of their own financial destiny.

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From the Doctor’s Notes:
DR BRUCE’S Model Portfolio BULLET PROOF: Version 2

Banks: ( 18 Units )
NAB 2 ½ National Aust Bank
CBA 2 ½ Commonwealth Bank
ANZ 2 ½ ANZ Bank
WBC 2 ½ Westpac Bank
MBL 1 . . .Macquarrie Bank
SGB .2 . . .St George Bank
SUN . 2 . . Suncorp Bank
BEN . 1 . . Bendigo bank
ADB . 1 . . Adelaide Bank
BOQ . 1 . . Bank Of Qld.

Insurance: ( 1 ½ Units )
AMP . 1 . . AMP Insurance
IAG . . ½ . .IAG Insurance

Cons Staple: ( 3 Units )
WOW . 2 . . Woolworths
FGL . .1 . . Fosters
Gambling. ( 2 units )
TAH . 1 . . Tabcorp
TTS . . 1 . . Tattersalls

Build Materials: ( 1 ½ units )
BLD . . 1 . . Boral
CSR . . ½ . .CSR

Media: ( 1 Unit )
PBL . . 1 . . Publishing & Broadcasting

Property Trusts ( 2 Units )
WDC . . 1 . . Westfield Grp
SGP . . . 1 . . Stockland Grp

Steel: ( 1 Unit )
BSL . . 1 . . Bluescope Steel

Infrastructure: ( 3 units )
TLSCA . . 1 . . Telstra Install Receipts
AAN . . . . 1 . . Alinta
AGL . . . . 1 . . AGL Energy

Special financial: ( 1 Unit )
ASX . . . 1 . . .Aust Stock Exchange

Resources: ( 4 Units )
BHP . . . 1 . . BHP Billiton
RIO . . . 1 . . .Rio Tinto
WES . . 1 . . .Wesfarmers
WPL . . 1 . . .Woodside

38 Units in total.


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INITIAL NOTE:

This presumes that you have your own Self Managed Superannuation Fund or other Investment Vehicle, that you are able to control.

This is the second version of Dr Bruce’s BULLET- PROOF Portfolio. Why is it the second Version?. Because the first version is now out of date due to Takeover, Merger and Acquisition activities in the market since the first version was issued. However there is very little difference in the state of play between the two versions.

How does it Work ?. Go back and you will see allocated against each share a number (eg. NAB 2 ½). This means that NAB is worth 2 ½ units.

If you count up, you will find there are 38 units all up in this portfolio.

What you do is divide your kitty by 38 to find out what one unit is worth then allocate money to each designated share appropriately.

You should notice various matters that stand out:-

1. There is a disproportionate allotment to banks. In my mind, Banks don’t go broke in Aus. Therefore almost half of the units end up with the banks.
2. Not all sectors of the market are represented. Eg. There ar no shares allocated to Health, I.T., developers and contarctor, setc.
3. All shares must pay a reasonable dividend, ( there are two notable exceptions here; Re BHP & RIO. They have been included because of their Icon status and to balance up the portfolio a little; But that’s all that resources get even though this country was built on our resources.)
4. Most stocks are blue –chip ( or almost Blue Chips) or, if they’re not, they must represent a monopolistic type of situation. Eg. ASX and the smaller Banks.
5. How To Buy?. Open up a COMSEC Account. You will find brochures with application forms at any Commonwealth Bank, Or, alternatively, ring 131519 ( 8 am – 7 pm Sydney Time ) and ask them to send you out a brochure, or two with application forms.
Why COMSEC? Reliable ( so far ) and lowest brokerage rate. ( See costs on WEB Site for Internet Preferred Trader ).
You need $5000 to open the account but once opened the balance doesn’t have to stay at a minimum $5000. It can be any number, probably down to $1, just to keep the account open.
This account is called a C.D.I.A. = Commonwealth Direst Investment Account.
COMSEC will issue a deposit and cheque book for you, linked to this account so that you can top up or withdraw at any time you like and for any reason.
There are no charges for the account keeping – not to me so far.

6. When To Start Your Portfolio?. On a day when the market is well down, say 40 or 50 points. Just go straight to the WEB SITE and put all your sharepurchase orders on in one session.

seems a horribly restrictive portfolio

Defensive, little scope for picking stocks, and whatss the point of diversifying across one sector (eg, banks) and ignore other stories completely.

Is it for retirement - if for a SMSF, does it fit the risk profile of the trustees? What is their investment strategy? How do you deal with reinvestment of dividends, or is this drawn as income?

Does it manage risk by ignoring other Asset classes - any fixed interest, international equity, property?

may as well with a portfolio like this buy the Streettracks 50 index LIC

Classifying PBL as "Media" is probably pushing the description now. More of a gambling Co. than media.

Hi Benthonic I can't answer some of the queries raised in your post, but recently received an email from the good Doctor wherein he outlined that he had now retired from remunerative medicine. I envy his ability to walk about twelve paces from his backdoor onto his jetty and view the great array of bream, just waiting to be caught and cooked. Although I must admit it is much easier in retirement to find a fine restaurant, especially on the Sunshine Coast, and have the finest Coral trout or Red Emporer freshly cooked and served. Cheers

With the rejection of the legislation in the U S of A congress to cure all Financial ills yesterday, ( and the NYSE dropped over 700 points ); Investors are seeing something that, except the over 80+ still alive and with their own marbles; they have never witnessed before; like as occurred in 1929-1934. Remember that during that period of the great depression only about 40% felt what it really means, the other 60% virtually revelled on untouched as if there was no tomorrow; and the first job many men had was as new recruit soldiers for the Second World War, the War to end all Wars.

So step up today and grab some goodies, after all tomorrow, babies will be borne, houses will be built and bought, new roads, bridges, power stations, dams, schools, universities, skyscrapers will be planned, designed constructed and opened, airliners will fly, people will holiday, politicians will be civil and honest, Doctors will operate, scientists will find new solutions; and so life goes on ........ and the maggots will be devising new plans.

We live in interesting times, Try to learn something from all that unfolds before your very eyes; it is better than reading History, because this time we are all part of it. Cheers.

Great post Cung .......AGREE ...life does go ....the foolish are hindered and the prudent rewarded ........

On the TV a few weekends ago were some analysis, and one quote that stuck was: -

"The best investment is paying off your debt"

Well that certainly done itself this last few weeks and if I sold lossy stocks based on shareprice I would in fact write off all my year-to-date CGT gains for this year.

Sorry taxman, you lose!

Cheers, time for some white riesling and bear cupboards, I now have to look at the next margin of pay for re-stocking the wine racks, signed both.