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FTSE 250 yields over 3.5% (Dividend and Yield History)

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moorfield
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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442676

Postby moorfield » September 16th, 2021, 6:54 am

MDW1954 wrote:
moorfield wrote:
Itsallaguess wrote:
Heh - I like the approach - I just wish it didn't look like you'd been marking my homework!

At least the crossing out wasn't in red pen!

:O)

Cheers,

Itsallaguess



Well we can go further. All of those sectors might already covered by selections from the FTSE 100 first before dropping into the 250, with the exception of one.

DLG, GLO, CSH, TEP, CEY,UKW,IGG

So from your original list, UKW is the only one I would choose to buy from the 250 !


You appear to be using the words "[FTSE] 250" in a pejorative sense. Exposure to some of those assets is only available in the FTSE 250. That is why I hold so many of them. The sectors, frankly, are misleading: look at the underlying assets.

MDW1954




Not at all. I was being mindful of the original HYP practice of firstly ranking the FTSE 100 by descending yield and working down, rejecting any share from a sector already chosen previously. Nothing pejorative or contentious in that.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442677

Postby moorfield » September 16th, 2021, 7:01 am

Dod101 wrote:
moorfield wrote:
Dod101 wrote:moorfield
I have not copied any of your post but that seems to me to be totally unrealistic. I in any case do not agree with using the yield on City of London as any realistic yardstick because they can and do, make it what they want (as they pay part of the dividend from capital/Revenue Reserves) You are comparing apples with oranges: in the one case anything they want the yield to be and the other mainly the natural yield.



No I'm not. I'm taking a "black box" view of the yield, whereas you are taking a "white box" view - that is how we differ in our outlooks, and neither of us are wrong, although your "white box" view still doesn't answer that question: why would you buy less yield from a single 250 share than a collective?


Dod101 wrote:Otherwise, you are relying on the HYP mantra.


And what's wrong with that, here?


I genuinely do not care whether I am taking a black box or a white box attitude. The answer to your question is simple. Because the single 250 share's yield is a fake.

Dod



Well that's an interesting thought. If the single 250 share's yield is a fake, then why would HYPsters bother ranking its yield at all, as IAAG has done with this list?

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442682

Postby Dod101 » September 16th, 2021, 7:36 am

moorfield wrote:
Dod101 wrote:
moorfield wrote:

No I'm not. I'm taking a "black box" view of the yield, whereas you are taking a "white box" view - that is how we differ in our outlooks, and neither of us are wrong, although your "white box" view still doesn't answer that question: why would you buy less yield from a single 250 share than a collective?




And what's wrong with that, here?


I genuinely do not care whether I am taking a black box or a white box attitude. The answer to your question is simple. Because the single 250 share's yield is a fake.

Dod



Well that's an interesting thought. If the single 250 share's yield is a fake, then why would HYPsters bother ranking its yield at all, as IAAG has done with this list?


I am referring to the City of London's yield as a fake because it is being made what the directors want it to be (as long as it augments the 'natural' yield by paying some of it from its Revenue Reserves) It is really no measure of anything. I have no idea why HYPsters would bother ranking it. In the overall yield of the FTSE250, that effect on its yield gets lost of course.

Dod

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442713

Postby Gengulphus » September 16th, 2021, 9:52 am

moorfield wrote:... (why would you buy less yield from a single 250 share than a collective?)

The short answer to that in my case is "Because I run a HYP as defined on this board".

The slightly longer answer is "Because I run a HYP as defined on this board, and such a HYP is a DIY collective of the same types of share that your non-DIY collective (CTY) also invests in. Your collective doubtless invests in shares that yield less than its overall portfolio yield as well as those that yield more (*) in the interests of having a decently diversified portfolio, and I'm not going to handicap my collective's diversification by not allowing it the same."

Any longer answer than that inevitably goes into the reasons why I choose to run a HYP as defined on this board, and that subject runs into the restriction in this board's guidance (with my bold):

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 .

Edit: By the way, I'm not saying that you (or indeed any other HYPer) are not allowed to use "yield no less than CTY's" as one of your filters for good HYP purchase candidates. Just that there are perfectly good reasons why a HYPer might not choose to use that filter. Essentially, your question sounds like a very plausible reason for using that filter, but that plausibility is based on an "apples with oranges" comparison, comparing individual constituents in a collective portfolio with another collective portfolio viewed as a whole.

(*) The only way it could avoid doing so is by having every single one of its investments yield its overall portfolio yield precisely, a situation that is vanishingly unlikely to occur.

Gengulphus

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442730

Postby moorfield » September 16th, 2021, 11:53 am

Dod101 wrote:I am referring to the City of London's yield as a fake because it is being made what the directors want it to be (as long as it augments the 'natural' yield by paying some of it from its Revenue Reserves) It is really no measure of anything.


No more or less fake than the other companies on IAAGs list, whose dividends are also ultimately what the directors want them to be.
A company whose dividend is not covered is sustaining that from revenue reserves or debt, and a company whose dividend is covered multiple times may be adding to revenue or debt rather than paying out more. In that respect the boards of CTY, SONG, and PHP are not so different - they are just working with different assets ie. other companies' shares, songs and gp surgeries; so I don't think your "apples and oranges" case is a strong one.

The point of my "black box" analogy is that as income seekers we are "end users" of directors' decisions, over which we have very little (but not no) control.
What we do control ourselves is the yield we buy with our hard-earned and -saved.

I note Gengulphus' post regarding the guidelines, and that is quite reasonable. What I was trying to show with my crossings out above is there is a range of yields in which it may not be optimal to HYP just for the sake of HYPing, given the alternative producers of income that are available and cannot be discussed here.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442732

Postby Arborbridge » September 16th, 2021, 12:05 pm

I think comparing one's HYP with CTY (or insert name of favourite IT) has some merit. However, we should also say "other things being equal" - particularly, for example growth of dividend income and for some people, growth of capital.

If one cannot produce a higher yield, and a higher rate of income growth over a longish period of study, with the additional effort which HYP entails then... perhaps it's time to ask the inevitable question of oneself as a manager.

However, in order to do so, one needs to measure, which some people seem reluctant to do 8-)

Arb.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442736

Postby Dod101 » September 16th, 2021, 12:15 pm

moorfield wrote:
Dod101 wrote:I am referring to the City of London's yield as a fake because it is being made what the directors want it to be (as long as it augments the 'natural' yield by paying some of it from its Revenue Reserves) It is really no measure of anything.


No more or less fake than the other companies on IAAGs list, whose dividends are also ultimately what the directors want them to be.
A company whose dividend is not covered is sustaining that from revenue reserves or debt, and a company whose dividend is covered multiple times may be adding to revenue or debt rather than paying out more. In that respect the boards of CTY, SONG, and PHP are not so different - they are just working with different assets ie. other companies' shares, songs and gp surgeries; so I don't think your "apples and oranges" case is a strong one.

The point of my "black box" analogy is that as income seekers we are "end users" of directors' decisions, over which we have very little (but not no) control.
What we do control ourselves is the yield we buy with our hard-earned and -saved.

I note Gengulphus' post regarding the guidelines, and that is quite reasonable. What I was trying to show with my crossings out above is there is a range of yields in which it may not be optimal to HYP just for the sake of HYPing, given the alternative producers of income that are available and cannot be discussed here.


I can see your point but cannot really accept it because I think using say City of London's yield as a benchmark for any investment seems to me to be flawed. It is as if 'if you cannot do better than City then just buy it.' The yield from an entire index is surly a much better benchmark in that it reflects, obviously, an average rather than just one share.

Can I also say that a company may be sustaining its dividend from revenue reserves (or for that matter any distributable reserves), and possibly from debt if these are not readily realisable or they do not have the cash. I see it as two separate steps. First they must have distributable reserves and then they must have cash or access to cash by borrowings. I do not see it as from revenue reserves or cash.

Dod

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442754

Postby moorfield » September 16th, 2021, 1:32 pm

Dod101 wrote: It is as if 'if you cannot do better than City then just buy it.'


I haven't yet met a retiree who has deliberately chosen to buy a lower income with his or her hard-earned and -saved. Have you? ;)

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442757

Postby Dod101 » September 16th, 2021, 1:40 pm

moorfield wrote:
Dod101 wrote: It is as if 'if you cannot do better than City then just buy it.'


I haven't yet met a retiree who has deliberately chosen to buy a lower income with his or her hard-earned and -saved. Have you? ;)


Yes, me. I seldom buy the highest yielding anything. I prefer to take a lower yield and maybe have a better chance of some capital appreciation. too many very high yielders have a very low or a negative capital gain. I am a retiree.

Dod

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442792

Postby idpickering » September 16th, 2021, 3:34 pm

Dod101 wrote:
moorfield wrote:
Dod101 wrote: It is as if 'if you cannot do better than City then just buy it.'


I haven't yet met a retiree who has deliberately chosen to buy a lower income with his or her hard-earned and -saved. Have you? ;)


Yes, me. I seldom buy the highest yielding anything. I prefer to take a lower yield and maybe have a better chance of some capital appreciation. too many very high yielders have a very low or a negative capital gain. I am a retiree.

Dod


I’m with Dod on this matter. Blindly chasing the highest yielding shares is folly imho, and not at all Foolish. Either way, this thread is drifting off topic imho.

Ian.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442834

Postby moorfield » September 16th, 2021, 9:23 pm

idpickering wrote:
Dod101 wrote:
moorfield wrote:
I haven't yet met a retiree who has deliberately chosen to buy a lower income with his or her hard-earned and -saved. Have you? ;)


Yes, me. I seldom buy the highest yielding anything. I prefer to take a lower yield and maybe have a better chance of some capital appreciation. too many very high yielders have a very low or a negative capital gain. I am a retiree.

Dod


I’m with Dod on this matter. Blindly chasing the highest yielding shares is folly imho, and not at all Foolish. Either way, this thread is drifting off topic imho.

Ian.



I think you missed the other half of my point Ian. It wasn't about chasing the highest yielding shares, I already crossed those off IAAGs list too, didn't I. ;)

I don't think the thread is drifting O/T btw. IAAG left it fairly open to interpretation as I see it. Anyway I'm not going to labour a point I've made here several times before. I've shown how I would overlay an additional filter onto IAAGs list, folk can take that or leave it as they choose.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442854

Postby JohnnyCyclops » September 16th, 2021, 11:25 pm

moorfield wrote:I don't think the thread is drifting O/T btw. IAAG left it fairly open to interpretation as I see it. Anyway I'm not going to labour a point I've made here several times before. I've shown how I would overlay an additional filter onto IAAGs list, folk can take that or leave it as they choose.


From a HYP point of view, with ~50 of the FTSE250 being investment trusts, might it be easier to simply remove them and just focus on individual companies. (I realise REITs are a form of IT). To me "pure ITs" don't feature in HYP considerations. I'm happy if an IT gets used as a practical benchmark for HYP performance (I tend to use the FTSE100 or FTSE All Share, or a buyable proxy like an ETF).

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442885

Postby Arborbridge » September 17th, 2021, 7:51 am

moorfield wrote:
Dod101 wrote: It is as if 'if you cannot do better than City then just buy it.'


I haven't yet met a retiree who has deliberately chosen to buy a lower income with his or her hard-earned and -saved. Have you? ;)



Well, I took this to mean a retiree wouldn't choose less than the yield of something like CTY - rather than the wider interepretation of just any old high yielding single company. Given the history of ITs like CTY, one if unlikely to be disappointed. Time will tell, but as you all know my "experiment" is still running but my IT portfolio is still delivering a decent yield (but less than HYP) while income from it has increased in the past two years. IT income will reach stasis or decline when their reserves are stretched while HYP income will bounce back (OEIC income is already showing signs of doing that) but will HYP recover enough to overtake my HYP? No doubt, I'll keep you posted.

Meanwhile, while one does have to bear in mind the different mandates of ITs and HYP ("high and rising income" for HYP) it is a fair question Moorfield raises: if we can't "do better" (each individual will decide what that means for him or her) than a professional IT manager, then we should sack ourselves as managers - or at least tilt more funds towards the professionals.

Arb.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#442901

Postby moorfield » September 17th, 2021, 9:03 am

Arborbridge wrote:
Meanwhile, while one does have to bear in mind the different mandates of ITs and HYP ("high and rising income" for HYP) it is a fair question Moorfield raises: if we can't "do better" (each individual will decide what that means for him or her) than a professional IT manager, then we should sack ourselves as managers - or at least tilt more funds towards the professionals.



Not quite what I'm asking but you are nearly there Arb, thank you. The question is posited the other way round in effect:

Why would we deliberately "do worse" (each individual will decide what that means for him or her) than a professional IT manager?

Or alternatively, what income risks do we see in an IT run by a professional manager that we are mitigating by buying a lower yielding share?

Anyway as I wrote above I'm not going to labour the point, it's left for others to ponder and discuss if they wish.


( Edit: Both questions assume we are not being dogmatic here and not just HYPing for the sake of HYPing, or in other words "because the guidelines say so". There is nothing off-guidelines by aiming to buy 15-20 shares yielding > 4.90% AFAIAC ! )

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#443019

Postby Gengulphus » September 17th, 2021, 2:04 pm

moorfield wrote:Or alternatively, what income risks do we see in an IT run by a professional manager that we are mitigating by buying a lower yielding share?

The income risks that the professional manager is mitigating by buying lower-yielding shares. One can reasonably expect that about 50% of the shares in the professional manager's portfolio will have yields below that portfolio's overall yield and the other ~50% of them yields above it. The professional manager will probably reckon that the higher-yielding shares carry somewhat higher risks, but those are mitigated by only putting about half of the portfolio's capital value into them and putting the other half into lower-yielding shares to at least dilute the effects of those risks if they materialise, and preferably be negatively correlated with them (i.e. loosely speaking, likely to rise and/or raise their dividends if the higher-yielding shares fall and/or cut their dividends). If one restricts oneself to buying only shares that are (or might be) in the professional manager's higher-yielding half, one is taking on the higher risks the professional manager has identified without the accompanying mitigation.

That argument does of course assume that the professional manager is good at identifying the risks and suitable mitigation for them, a point that quite a few HYPers would dispute... But basically, either one does believe that and it follows that one shouldn't deny oneself the mitigation the professional manager uses, or one doesn't believe that - in which case why be guided at all by what the professional manager does???

Gengulphus

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#443043

Postby MDW1954 » September 17th, 2021, 2:59 pm

Moderator Message:
Several off-topic posts regarding buying ETFs have been deleted. Later this evening, when I have more time, I'll look at moving them over to the ETF board. I did try, but it all went horrendously wrong. --MDW1954

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#443148

Postby JohnnyCyclops » September 17th, 2021, 8:33 pm

MDW1954 wrote:
Moderator Message:
Several off-topic posts regarding buying ETFs have been deleted. Later this evening, when I have more time, I'll look at moving them over to the ETF board. I did try, but it all went horrendously wrong. --MDW1954


I respect the decision, if it's OT for this thread.

However, having a benchmark to measure a HYP's performance is a very practical tool. A benchmark can be an index (I choose FTSE100 TR). And a measureable/accessible form of an index can be an ETF index tracker. T'was only that. I accept it might then read as "invest in HYP or an index tracker (ETF)?" which was not the intent of those posts.

Finally, if you find this post is of a 'meta' discussion nature on the rights/wrongs of the board, then please feel free to delete it, and I'll not mind.

Thank you for moving the other posts to the ETF board, but I fear they'll lack context, being relevant to practical HYP management.

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#443164

Postby moorfield » September 17th, 2021, 9:16 pm

MDW1954 wrote:
Moderator Message:
Several off-topic posts regarding buying ETFs have been deleted. Later this evening, when I have more time, I'll look at moving them over to the ETF board. I did try, but it all went horrendously wrong. --MDW1954



Apologies that was one of my posts, but permit me to be clear (again, as I have done many times before) that I do not advocate buying CTY or ETFs here. I do however advocate not buying shares yielding less than these into an HYP - so tell me, how is that off-topic or off-guidelines, please ?


JohnnyCyclops wrote:However, having a benchmark to measure a HYP's performance is a very practical tool.


Absolutely, even more so if it is a buyable proxy as you well phrased it JC. I would hope a thread such as this would permit some free-flowing discussion and development of this idea, since it was initiated with a suspiciously arbitrary "3.5%" (although I'm guessing that's a recent quote for the FTSE100 yield? but then why not the FTSE250 yield, see the problem already?)

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#443174

Postby MDW1954 » September 17th, 2021, 9:48 pm

JohnnyCyclops wrote:
MDW1954 wrote:
Moderator Message:
Several off-topic posts regarding buying ETFs have been deleted. Later this evening, when I have more time, I'll look at moving them over to the ETF board. I did try, but it all went horrendously wrong. --MDW1954


I respect the decision, if it's OT for this thread.

However, having a benchmark to measure a HYP's performance is a very practical tool. A benchmark can be an index (I choose FTSE100 TR). And a measureable/accessible form of an index can be an ETF index tracker. T'was only that. I accept it might then read as "invest in HYP or an index tracker (ETF)?" which was not the intent of those posts.

Finally, if you find this post is of a 'meta' discussion nature on the rights/wrongs of the board, then please feel free to delete it, and I'll not mind.

Thank you for moving the other posts to the ETF board, but I fear they'll lack context, being relevant to practical HYP management.


Moderator Message:
If you're happy for me to reinstate them, edited, in order to make it clearer that you were discussing an ETF in the context of a benchmark, then I'm happy to do that.

Other people use CTY as a benchmark, so that seems reasonable.

-- MDW1954

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Re: FTSE 250 yields over 3.5% (Dividend and Yield History)

#443198

Postby JohnnyCyclops » September 17th, 2021, 11:19 pm

MDW1954 wrote:
Moderator Message:
If you're happy for me to reinstate them, edited, in order to make it clearer that you were discussing an ETF in the context of a benchmark, then I'm happy to do that.

Other people use CTY as a benchmark, so that seems reasonable.

-- MDW1954


Hi, yes that's absolutely fine and I trust you in the edit, plus my note above should still remain, which also provides an explanation. Many thanks.


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