hiriskpaul wrote:Itsallaguess wrote:
As a (primarily) IT-related income-investor (multi-sector / global-scope), and as one who is happy to 'contract out' those decision-making processes, as well as taking advantage of those sub-managed processes such as income-smoothing/revenue-reserves etc., it's the 'hands off' income-stream I'm interested in, and being able to track it, see and measure it's general long-term growth, judge it's long-term reliability, and be able to pitch those against any calculated safety-criteria (cash buffers etc..) when set against my long-term, post-work income requirements, without feeling the need to get too directly involved with day-to-day, market-related activities, that are some of the main attractions of the overall 'income-strategy' to me.
That's very interesting thanks. You appear to have much the same position as me with respect to the
underlying source of income. It could come from dividends, or from the sale of shares. Does that mean that you are entirely comfortable for an IT to hold shares that paid little to no income and are agnostic as to the portfolio's dividend yield? That would seem to follow as what matters to you is the income paid by the IT, not how the IT generates that income.
Would you be interested in a system such as that operated by Vanguard that would make regular payments to you from dividends and occasional disposals? Or would you prefer to have someone else (the fund manager in the case of an IT) make decisions on the level of income to be paid? ie to decide on what was sustainable. I am assuming this system would be run at very low cost, not suggesting using an expensive wealth manager!
As an income-investor I'm keenly interested in some of the new income-related IT's that are recently emerging that fish in what we might normally describe as a more '
growth orientated' pools (and as you imply, where those fish perhaps don't of themselves pay any overly useful level of dividends...), but which then look to
pay out as regular dividends, a percentage of underlying NAV, presumably requiring some level of underlying sales being required to then generate such payouts, so there's certainly no
fundamental reason, for me at least, to avoid looking at those types of investments, as they'd predominantly deliver
the same end-result as more 'underlying dividend-based' income-IT's, in that an investor holding them would, with a fair wind, continue to see income 'delivered' in a hands-off way, but with the relevant 'NAV-based' IT-managers dealing with the
generation and delivery of those outward-facing dividends in a slightly different way...
And that's probably as good an opportunity as we're likely to get on this particular thread for me to do what I try really hard not to, and raise what I personally think is my single biggest criticism of the focussed high-yield HYP strategy itself, in that by primarily locking itself and it's proponents into a relatively old and very rigid investment framework, largely based on an historical investment landscape and product-set that bears little resemblance to the one cheaply and more widely available *today*, I think it unfortunately paints itself into a highly focussed and potentially risk-based corner that, in my personal view, doesn't deliver enough of a benefit to strongly justify doing so..
I say that as someone that started out income-investing by following the HYP method, but what I'd also say is that my personal journey was
also an 'of it's time' one, and I think if I were to see myself at that younger age being in the same position
today, with an interest in income-investing but with the much-improved investment landscape opportunities that exist
today, then I'd have most probably short-cut my longer journey, and missed the HYP bit out altogether, and probably have started out with a much broader IT-based portfolio, venturing into the wider sector and geographical areas that are available to them (whilst sticking with the income-investing theme), and also looking at these new types of 'NAV-based yield generators' that are becoming available, that do seem to be looking to hit that sweet-spot of taking advantage of more growthy areas of the markets, whilst still delivering to income-seekers by keeping much of the mechanisms of cash-generation behind the IT-scenes, and still looking to the end-user as a 'yield-based' investment....
Cheers,
Itsallaguess