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*NEW* HYP Practical - Group Guidelines

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
Forum rules
Tight HYP discussions only please - OT please discuss in strategies
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*NEW* HYP Practical - Group Guidelines


Postby Clariman » June 9th, 2020, 11:15 am

The objective of this board is to be a place for investors who have decided to take, or are contemplating taking, a HYP approach to investing. Here they can discuss the practical decisions and activities involved, without those discussions being interrupted or taken over by discussions of whether a HYP approach is appropriate in the first place.

Do not post here if you are unwilling or unable to make your post comply with this objective.

For the avoidance of doubt, the practicalities of taking a HYP approach DO NOT include making decisions about whether to use such an approach, nor decisions about whether to stop using one, the effectiveness and performance of HYP strategies versus other strategies, the desirability or otherwise of investment trusts as an alternative to HYP shares, nor discussions of other types of approaches. Such issues should instead be discussed on the High Yield Shares & Strategies - General board, or on the Investment Strategies board. The guidelines for the former are here viewtopic.php?f=31&t=8652 .

Discussion of these rules is NOT permitted here, but can be raised in Lemon Fool -- Improve the Recipe. The discussion of moderation is also not permitted on this board.

For the purposes of this board, a HYP approach is one that invests on a Long Term Buy and Hold (LTBH) basis in a diversified portfolio of shares. Those shares should:

  • When bought, be among the constituents of the FTSE 350 index.
  • When initially bought, have yields greater than the yield of the FTSE 100 index.
  • When bought, be reasonably expected to sustain, and preferably grow their dividends in the future.
  • Be ordinary shares, not preference shares.
  • Not be shares in investment companies or investment trusts which are largely invested in quoted equities. REITs and REIT-like investment companies (e.g. infrastructure companies) are perfectly acceptable.

It is acknowledged that individual HYP investors may from time to time see the need to sell individual HYP stocks, perhaps in response to adverse performance, portfolio imbalance, or a corporate action, e.g. takeover. It is further acknowledged that it would be unrealistic to rule that discussion of such actions is outside the board’s remit. It is stressed, however, that HYP investing was always intended to be a LTBH strategy.

When reporting on a HYP portfolio, there may be times when it is impractical to exclude overseas shares, Investment Trusts, or preference shares. In such circumstances, these shares can be included within a published portfolio if they make up no more than circa 5%. They must NOT be discussed on this board.

A note on yield
There are multiple sources for FTSE 100 yield data, although they don’t always agree. Posters are asked to make clear when discussing yield whether they are referring to historic yield (as quoted by many data sources), forecast yield, or some other yield such as yield on bought cost. For the avoidance of doubt, the FTSE 100 index referred to is the normal, widely-quoted capitalisation weighted version of the index, and not the less well known equally weighted version, or any other version.

Lemon Fool began life in late 2016 following the announcement of the closure of the Motley Fool UK’s discussion boards. The previous version of this board’s guidance reflected the attempts by our volunteer, part-time moderators to codify and emulate the moderation policy of the Motley Fool’s approach to its own HYP-Practical board. The present guidance is intended to be a further improvement of that initial guidance, based on recent user feedback and discussions among moderators and the Lemon Fool’s owners.

It is always difficult to strike a balance between wide-ranging, unfettered dialogue and structured discussion. Please bear in mind that the site’s moderators are human, fallible, part-time, and volunteers. Please also bear in mind that they possess the power to bar users from posting on the board. While this power will not be deployed lightly, users wilfully ignoring these guidelines, or engaging in trolling and similar activities, should not be surprised to find themselves duly barred.

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