yopyop wrote:Not posted here, but I have had a HYP for 5 years, mainly because I only transfered my DB pension to a SIPP in 2016.
I just did a review, splitting the HYP between fallers and static/risers in terms of SP. I used CTY as the balance of positives versus negatives. Coincidentally , it worked out as about 50% investment each, over and below the CTY investment %. In other words each "block' is more or less equal in terms of original investment
Interesting , but not sure what to do with it.
Let's start with the positives - up 15% in share price and an average dividend of 5,5% with a current forecasted dividend of 5,3%
Negatives - down 39% and an average divi of 3,7% based on the current share price, not the original SP (full of cutters such as banks and oil and gas, oh and REITs). No idea what the forecasted Divis might be, too hard to guess.
What would you do with this info - ignore it?
Well, in future I would aim to answer that question
before gathering the info - and not bother gathering it at all if the answer is "Ignore it"! ;
-)
Having said that, I don't think it's the most useful way of starting a HYP review, but I also don't think it's useless. As a general rule, I would regard it as indicating that a review is unlikely to indicate that the 'positives' should be topped up or completely sold, but some of them might have grown too big for comfort (*) and be worth trimming back. But "unlikely" means what it says - topping up or selling completely are possible verdicts from a review of a 'positive' holding, just ones that don't happen very often in my experience because a 'positive' holding is usually already fairly highly weighted in the portfolio and at least pulling its weight in income terms.
A review is more likely to indicate action on the 'negatives' - though whether that action should be selling them because one reckons the company has become a basket case or topping up because one reckons that it's out of favour with the market for no very good reason can be a good question! (**) And I should add that "more likely" does not mean "more likely than not" - most times that I review a 'negative' company in my HYP, I end up deciding to leave it as it is. It just means "more likely than deciding that a 'positive' holding needs some action taken".
So basically, what I would do with the information is use it to guide me to the main questions I should investigate about each holding, and if short of time, to investigate the questions about the 'negative' holdings first. Having said that, what I actually do is keep a spreadsheet listing of all my holdings and sort it various ways - some simple, like highest-yield-to-lowest-yield or highest-capital-value-to-lowest-capital-value; some combined measures like a HYPTUSS-style 'top-up ranking' (which basically combines those two simple ones); some a bit more esoteric such as what percentage of my total holdings of each company are in tax-sheltered accounts, and of the tax-sheltered holdings, what the ratio is of ISA holdings to SIPP holdings. Then I tend to concentrate my reviewing on the 'outlier' holdings by those measures - are the especially high yields sustainable? are the especially low yields significant? are the especially high capital-value holdings too big for my comfort? etc. So I don't really use a 'positives' vs 'negatives' split of my holdings at all in my reviewing, and the above answers aren't about what I actually do, just what I would use such a split for if I was given it for free.
Finally, that's all generalities, not specifics about particular shares. If you want the latter, post a list of your HYP's shares and their capital weightings in your HYP, plus any other information you're happy supplying such as what you consider their sectors to be or dividend yields (though I appreciate that dividend yields are awkward at the moment - historical yields are likely to be misleading because of short-term pandemic effects, forecast yields are a lot more difficult to obtain than they used to be...).
(*)
Your comfort, that is - which isn't a matter that others can decide for you...
(**) And expect to get the answer to that question wrong from time to time. E.g. last night I stumbled across the fact that a company I'd sold from my HYP in May 2017 on the basis that I thought it had become a basket case was taken over about three years later for a price about 80% above what I got for my sale... (I won't name the company - it's decidedly off-topic here, having never met this board's standards for HYP companies and been very much a 'marginal candidate' experiment even when I acquired it for my HYP back in TMF days, and it cut its dividend pretty promptly after I acquired it! I was quite lucky to get out at about a 1% capital loss when I did...)
Gengulphus