Stupid HYPTUSS question

[bjmarren]

I have a stupid question to ask regarding the HYPTUSS. I am about to top up 5 of my 15 share portfolio and assumed that the HYPTUSS would make the recommendation based on the value of the individual shares in comparison to the overall value of the portfolio but it doesn't seem to do that exactly. Am I missing something here?

By the way, many thanks for creating the HYPTUSS, it's an excellent tool.

Brendan

[Itsallaguess]

I have a stupid question to ask regarding the HYPTUSS.

I am about to top up 5 of my 15 share portfolio and assumed that the HYPTUSS would make the recommendation based on the value of the individual shares in comparison to the overall value of the portfolio but it doesn't seem to do that exactly.

Am I missing something here?

Hi bj,

The tool mimics Terry's methodology for top-up selection, which gives a ranking for each share based on their value as a percentage of the overall portfolio, and also the forecast yield.

The rankings are highest for a low relative value, compared to other holdings, and also highest for the highest forecast yield, and the two rankings are added together to give an overall rank for top-up selection, with the lowest value/highest forecast yield being at the top end of the final ranking list. You can probably see this working on your own portfolio list if you look at the two separate ranking columns.

The idea is that a type of rebalancing will naturally occur if you top up the highest yielding, lowest value stock, which is meant to give you the most income for a particular top-up, whilst bringing lower-value shares (in terms of capital diversification) up towards the higher capital value shares.

You do need to be careful, in that sometimes the higher ranking shares do need some thinking about, as there may be a reason that they currently top your list, and it should never be blindly followed. It should be used as a helpful guide only, and to be honest I've not topped up my highest-ranking shares for some time, as I've had share-specific concerns regarding some of them. In those cases, I've just worked my way down the list until I come to an approproate share for investment, and I'd always recommend others to do just that too.

Thanks for asking the question bj, because if you're not clear on the idea then I'm sure there are others in the same boat, so it's always good to have a chance to explain any issues that aren't as clear as they could be regarding the tool.

Cheers,

Itsallaguess

[bjmarren]

Hi Itsallaguess,

Many thanks for the explanation, it's makes perfect sense now. I'll also follow your advice with respect to not automatically topping up the top 5 without first having a look at them in more detail.

Brendan