How is HYP doing in the Covid-19 crisis vs alternatives?

[Wizard]

I posted these numbers on a thread on HYP-Practical where it was heading off topic for the board. I thought I would post here in the hope others would share their performance numbers.

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

Given this, as far as it has performed for me,, the answer is HYP has performed badly. Very badly.

I don't hold Investment Trusts, so the relative performance of such a portfolio is a blind spot for me. How have others found different elements of income investment have held up?

[Lootman]

As background, I saw today that the S&P 500 Growth index has out-performed the S&P 500 Value index by an astonishing 20% year-to-date.

Since HYPs correlate to value, it is reasonable to infer a similar 20% total return shortfall in the UK as well, even if you confine yourself to equities.

[tikunetih]

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

You've not said what you're comparing your capital to...
It's value at a certain date? Value at a high water mark?

[Wizard]

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

You've not said what you're comparing your capital to...
It's value at a certain date? Value at a high water mark?

Good point, I should have also copied this from my original post...

Quoted figures are based on the 20th February closing position to the 7th May closing position for my income investments.

[IanTHughes]

I posted these numbers on a thread on HYP-Practical where it was heading off topic for the board. I thought I would post here in the hope others would share their performance numbers.

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

Given this, as far as it has performed for me,, the answer is HYP has performed badly. Very badly.

I don't hold Investment Trusts, so the relative performance of such a portfolio is a blind spot for me. How have others found different elements of income investment have held up?

You have missed out my best performer:

Cash In bank - capital down 0%, expected income down 0%

Seriously, if you are going to compare the performance, income or capital, of any investment vehicle, with any other investment vehicle, over such a short period of time, then you should surely only compare like with like - Equity with Equity - Bond with Bond - Cash with Cash

If you must compare the investment performance of investment vehicles with different asset classes, then you should surely do so over a much longer time frame than your chosen period of under three months, a period when one asset class, Equities, has obviously performed very badly.

Give us the figures over 5 years or more, otherwise your analysis tells us very little of any use.


Ian

[Wizard]

I posted these numbers on a thread on HYP-Practical where it was heading off topic for the board. I thought I would post here in the hope others would share their performance numbers.

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

Given this, as far as it has performed for me,, the answer is HYP has performed badly. Very badly.

I don't hold Investment Trusts, so the relative performance of such a portfolio is a blind spot for me. How have others found different elements of income investment have held up?

You have missed out my best performer:

Cash In bank - capital down 0%, expected income down 0%

Seriously, if you are going to compare the performance, income or capital, of any investment vehicle, with any other investment vehicle, over such a short period of time, then you should surely only compare like with like - Equity with Equity - Bond with Bond - Cash with Cash

If you must compare the investment performance of investment vehicles with different asset classes, then you should surely do so over a much longer time frame than your chosen period of under three months, a period when one asset class, Equities, has obviously performed very badly.

Give us the figures over 5 years or more, otherwise your analysis tells us very little of any use.


Ian

What it tells me is relevant to stress situations, such as the current one. If it tells you nothing fair enough, but it is of use to me.

I have only been running my HYP experiment for a shorter period than the other two, about three and a half years. What I know is the overall return over that period from HYP is negative and for my bond and preference share portfolios it is positive. I dare say you will say three and a half years is too short a period to judge HYP on. That may be your view, for me it is long enough to know I am not happy with it. The good news is that because it was an experiment I had committed only a small amount of capital to the HYP portfolio, so relative to my overall wealth and income the impact is pretty small.

[88V8]

There will be times like these. Equities in a big wobble.
I've been taking advantage to add to HYP shares, and Fixed Income and ITs, so I can't tell you how far my prior HYP portfolio has fallen, but like the OP's it has fallen a lot.

However, over a period, inflation will nibble away at our Fixed Income income. So it is not a sustaining one-pot meal.
Yes, if one has surplus income one can buy more FI to offset inflation, adding more to the pot as the gravy leaks out of the bottom. But that in a sense is cheating. A portfolio that needs constant topping up cannot be considered sound. And the younger one is the worse it is as the weevils of inflation have more time to nibble.

I regards FI as a bedrock, as you say, there will be no cuts. As a rule.
And I am old. The worms will get me before the weevils of inflation do.

And then I have HYP to provide some income growth. As a rule.
And then a few income ITs to provide almost guaranteed income growth albeit at a lower yield. For me, MRCH, MUT, JCH, CTY, all of which have grown their divi for more years than I've been investing.

A mixture.
Is the elixir.
Of investing health.

V8

[IanTHughes]

I posted these numbers on a thread on HYP-Practical where it was heading off topic for the board. I thought I would post here in the hope others would share their performance numbers.

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

Given this, as far as it has performed for me,, the answer is HYP has performed badly. Very badly.

I don't hold Investment Trusts, so the relative performance of such a portfolio is a blind spot for me. How have others found different elements of income investment have held up?

You have missed out my best performer:

Cash In bank - capital down 0%, expected income down 0%

Seriously, if you are going to compare the performance, income or capital, of any investment vehicle, with any other investment vehicle, over such a short period of time, then you should surely only compare like with like - Equity with Equity - Bond with Bond - Cash with Cash

If you must compare the investment performance of investment vehicles with different asset classes, then you should surely do so over a much longer time frame than your chosen period of under three months, a period when one asset class, Equities, has obviously performed very badly.

Give us the figures over 5 years or more, otherwise your analysis tells us very little of any use.

What it tells me is relevant to stress situations, such as the current one. If it tells you nothing fair enough, but it is of use to me.

I have only been running my HYP experiment for a shorter period than the other two, about three and a half years. What I know is the overall return over that period from HYP is negative and for my bond and preference share portfolios it is positive. I dare say you will say three and a half years is too short a period to judge HYP on. That may be your view, for me it is long enough to know I am not happy with it. The good news is that because it was an experiment I had committed only a small amount of capital to the HYP portfolio, so relative to my overall wealth and income the impact is pretty small.

Fair enough.

All I would advise is that an Equity Portfolio is inherently risky. Capital invested should only be what one can confidently "put away" for at least five years, preferably longer.

For what it is worth, over the past 3 and a half years, up to just before this Covid crisis struck, the value of the Accumulation Units of my HYP portfolio increased by 25%. Of course, taking into account the recent downturn, that is now a small decrease in their value.

Since the start of my HYP in February 2012, including the recent downturn, the value of those Accumulation Units has increased by 50%


Ian

[johnhemming]

I like stocks that have a yield because it is symptomatic of a business that has an established function that performs on a regular basis and I often look at higher yield stocks to see if they are value traps or not. However, I am a stock picker in that I make assessments about the individual companies.

The challenge for that strategy in these circumstances is to see if there are stock picks that can balance out the losses from other investments. HYP is a form of tracker and it is not unreasonable to say that if that is your strategy then see how it works over time.

This is, however, a difficulty thing for people who are invested in some form of tracking fund as all thay can do is crystallise losses or stay onboard for the ride.

We do have some ideas of what the end game of lockdown etc is in in that there may be a facility for the government to underwrite the recapitalisation of businesses that have swallowed too much lockdown loans for them to cope. However, a lot of this depends upon what costs of businesses have been lost through things like furlough, nndr holidays and possible rent sharing. Unsurprisingly the government are not looking publicly at the end game on this, but there will be an end game.

[TopOfDaMornin]

From April 2019 to April 2020 my capital in HYP is down -15.6%, slightly better than the FTSE100 that I have at -21%.
https://www.lemonfool.co.uk/viewtopic.php?f=15&t=22929&p=300372#p300372

In terms of income, it is too early for me to tell what will happen in the coming year but I expect at least a drop of 35%.
I have a small position in ITs but they have performed worse than the HYP. I have now added to the ITs.
I have another £37k in a FTSE All-World UCITS ETF (VWRL), which I bought about 9 months ago and this is down 5%.


My concern at the moment is what to do with the HYP. There are temptations to sell it all and buy back later as I think the market may drop further but past history shows I cannot time the market. So I shall probably leave things as they are as the HYP is reasonably well balanced. Obviously, with the recent drops, now looks like a good time to buy, especially ITs.

[Wizard]

You have missed out my best performer:

Cash In bank - capital down 0%, expected income down 0%

Seriously, if you are going to compare the performance, income or capital, of any investment vehicle, with any other investment vehicle, over such a short period of time, then you should surely only compare like with like - Equity with Equity - Bond with Bond - Cash with Cash

If you must compare the investment performance of investment vehicles with different asset classes, then you should surely do so over a much longer time frame than your chosen period of under three months, a period when one asset class, Equities, has obviously performed very badly.

Give us the figures over 5 years or more, otherwise your analysis tells us very little of any use.

What it tells me is relevant to stress situations, such as the current one. If it tells you nothing fair enough, but it is of use to me.

I have only been running my HYP experiment for a shorter period than the other two, about three and a half years. What I know is the overall return over that period from HYP is negative and for my bond and preference share portfolios it is positive. I dare say you will say three and a half years is too short a period to judge HYP on. That may be your view, for me it is long enough to know I am not happy with it. The good news is that because it was an experiment I had committed only a small amount of capital to the HYP portfolio, so relative to my overall wealth and income the impact is pretty small.

Fair enough.

All I would advise is that an Equity Portfolio is inherently risky. Capital invested should only be what one can confidently "put away" for at least five years, preferably longer.

For what it is worth, over the past 3 and a half years, up to just before this Covid crisis struck, the value of the Accumulation Units of my HYP portfolio increased by 25%. Of course, taking into account the recent downturn, that is now a small decrease in their value.

Since the start of my HYP in February 2012, including the recent downturn, the value of those Accumulation Units has increased by 50%


Ian

Apologies, I kept meaning to reply to your post, but then always got distracted by something else. To be clear I am not saying I am moving away from equity investment, just the HYP approach. You may have seen on other threads I have challenged whether some posters are actually running HYPs, because they are not following all the basic principles articulated by PYAD, the easy example being they are not adopting an LTBH approach. I am very deliberately calling my portfolio an HYP because barring two specific exception I have followed those principles. The two exceptions being that relatively early on I sold one share where the board switched from paying a dividend to mainly doing buy backs and second I acquired one non-UK share in the portfolio, that being IBM. Other than that the portfolio has been fully HYP with no tinkering. What I am saying is that it is the HYP approach as put forward in the early 2000s by PYAD that I am unhappy with.

Going forward I plan to keep most, if not all, of my current investments in the hope they will recover somewhat. However, during the crisis I have been buying new shares that would not always fit the PYADic HYP model and will continue to do so. For example, I plan to purchase more non-UK shares and I will buy shares which I believe can grow their dividends even if they are not considered 'high yielders' at the time I make my purchase.

From the very outset my HYP experiment was for a specific purpose, as an inflation hedge for my existing Preference Share and Bond holdings. Under any reasonable scenario for inflation my income from my Preference Share and Bond holdings will deliver all the income I will ever need. Indeed that income should grow over time as my needs will be significantly less than the income produced, meaning there is scope for reinvestment to create more income. What attracted me to HYP was the promise of high and growing income. But that promise has not been delivered through a combination of companies failing and dividend cuts and that was the case even before the current crisis. The current crisis is just the final nail in HYP's coffin for me. I will still be looking for a way to hedge the inflation risk, but it will not be through an HYP.

[tjh290633]

What attracted me to HYP was the promise of high and growing income. But that promise has not been delivered through a combination of companies failing and dividend cuts and that was the case even before the current crisis. The current crisis is just the final nail in HYP's coffin for me. I will still be looking for a way to hedge the inflation risk, but it will not be through an HYP.

I think it is fair to say that, for you, in the relatively short time you have been trying to follow the HYP sytem, you have not achieved a growing income. I hate to keep bringing this up, but there have been a number of crises over the years. The following is the dividend per income unit for my portfolio over the last 30-odd years:

.   Ordinary 
Year to      Divs/unit
05-Apr-88         2.83
05-Apr-89         2.25
05-Apr-90         3.40
05-Apr-91         4.67
05-Apr-92         5.94
05-Apr-93         5.52
05-Apr-94         5.31
05-Apr-95         6.45
05-Apr-96         6.27
05-Apr-97         7.13
05-Apr-98         7.55
05-Apr-99         7.92
05-Apr-00        10.79
05-Apr-01        11.39
05-Apr-02        12.46
05-Apr-03        11.68
05-Apr-04        11.13
05-Apr-05        13.03
05-Apr-06        14.21
05-Apr-07        15.18
05-Apr-08        18.73
05-Apr-09        21.60
05-Apr-10        11.91
05-Apr-11        15.12
05-Apr-12        17.78
05-Apr-13        19.93
05-Apr-14        20.34
05-Apr-15        21.35
05-Apr-16        21.68
05-Apr-17        24.17
05-Apr-18        27.02
05-Apr-19        26.36
05-Apr-20        29.71

As we all know, dividends do not always rise. However in the long term they do. They recover from set-backs. Three and a half years is not long enough to form an opinion.

TJH

[Wizard]

What attracted me to HYP was the promise of high and growing income. But that promise has not been delivered through a combination of companies failing and dividend cuts and that was the case even before the current crisis. The current crisis is just the final nail in HYP's coffin for me. I will still be looking for a way to hedge the inflation risk, but it will not be through an HYP.

I think it is fair to say that, for you, in the relatively short time you have been trying to follow the HYP sytem, you have not achieved a growing income. I hate to keep bringing this up, but there have been a number of crises over the years. The following is the dividend per income unit for my portfolio over the last 30-odd years:

.   Ordinary 
Year to      Divs/unit
05-Apr-88         2.83
05-Apr-89         2.25
05-Apr-90         3.40
05-Apr-91         4.67
05-Apr-92         5.94
05-Apr-93         5.52
05-Apr-94         5.31
05-Apr-95         6.45
05-Apr-96         6.27
05-Apr-97         7.13
05-Apr-98         7.55
05-Apr-99         7.92
05-Apr-00        10.79
05-Apr-01        11.39
05-Apr-02        12.46
05-Apr-03        11.68
05-Apr-04        11.13
05-Apr-05        13.03
05-Apr-06        14.21
05-Apr-07        15.18
05-Apr-08        18.73
05-Apr-09        21.60
05-Apr-10        11.91
05-Apr-11        15.12
05-Apr-12        17.78
05-Apr-13        19.93
05-Apr-14        20.34
05-Apr-15        21.35
05-Apr-16        21.68
05-Apr-17        24.17
05-Apr-18        27.02
05-Apr-19        26.36
05-Apr-20        29.71

As we all know, dividends do not always rise. However in the long term they do. They recover from set-backs. Three and a half years is not long enough to form an opinion.

TJH

Thank you for this. I would make two points.

First, I could run my experiment for 30 years, which would mean pretty close to death (or possibly after if things do not go as I hope) I would know if I had made the right decision or not, but then that would not be an experiment, it would be the actual main event. On that basis maybe I should rely on the experience of others.

But, second, by my way of thinking your results do not represent a good proxy for a longer term version of my experiment as your approach is more sophisticated than PYAD's HYP approach. For example, I believe you will sometimes sell a cutter but other times retain it depending on your judgement as to the likely timescale for the resumption of a dividend - though you advocate waiting for the initial (often over-) reaction to the news to pass if you are going to sell. You also regularly top-slice your portfolio to keep it in balance, even during this crisis you have done so when others have suggested maybe sitting on your hands. That was never part of PYAD's HYP approach, as clearly demonstrated by the significant imbalance in HYP1 in terms of both capital values and the sources of income. Your results since 1988 are not the same as the results of an HYP portfolio run without the features that did not form part of PYAD's HYP approach.

All I am saying is that HYP as described by PYAD is not for me, the promise of a hands off, never need to look or worry growing income is not a promise I trust after my relatively short experiment. I may end up with a portfolio with some non-PYAD HYP methods you use, I think you manage your portfolio very effectively. But in the terms I am using the nomenclature that would not be an HYP.

[Itsallaguess]

All I am saying is that HYP as described by PYAD is not for me, the promise of a hands off, never need to look or worry growing income is not a promise I trust after my relatively short experiment.

Surely the single best example we've got available to us regarding a 'HYP as described by Pyad' is the original HYP1 portfolio...

Given that HYP1 was 19 at it's last birthday, couldn't you have taken a quick look at the current state of that portfolio and saved yourself a three and a half year experiment?

https://www.lemonfool.co.uk/viewtopic.php?f=15&t=20386

Cheers,

Itsallaguess

[dealtn]

All I am saying is that HYP as described by PYAD is not for me, the promise of a hands off, never need to look or worry growing income is not a promise I trust after my relatively short experiment.

Surely the single best example we've got available to us regarding a 'HYP as described by Pyad' is the original HYP1 portfolio...

Given that HYP1 was 19 at it's last birthday, couldn't you have taken a quick look at the current state of that portfolio and saved yourself a three and a half year experiment?

https://www.lemonfool.co.uk/viewtopic.php?f=15&t=20386

Cheers,

Itsallaguess

For me it is statements such as

"But all the rules with their permitted flexibility are subservient to the one inviolable law that is never (sic) be broken, diversification accompanied by equal investment in each sector." *

Which when coupled with the resulting huge concentration issue of HYP1 (as an example) is why I think the inherent inflexibility of a strict PYADic HYP strategy is dangerous, particularly to those who perhaps don't understand those risks, but are attracted to the "simplicity" of the strategy.

To be clear I would think it equally dangerous for other rules based strategies.

Less strict High Yield strategies, and rules based systems generally have merit in their simplicity, and accessibility, but rules in general are counter to the flexibility that is often preferable to strictly adhering to them in my view. It is "your" money after all, so why shouldn't "you" be deciding how and when to follow the "rules".

* https://app.stockopedia.com/content/hyp ... e=threaded (as recently quoted in another post)

[tjh290633]

But, second, by my way of thinking your results do not represent a good proxy for a longer term version of my experiment as your approach is more sophisticated than PYAD's HYP approach. For example, I believe you will sometimes sell a cutter but other times retain it depending on your judgement as to the likely timescale for the resumption of a dividend - though you advocate waiting for the initial (often over-) reaction to the news to pass if you are going to sell. You also regularly top-slice your portfolio to keep it in balance, even during this crisis you have done so when others have suggested maybe sitting on your hands. That was never part of PYAD's HYP approach, as clearly demonstrated by the significant imbalance in HYP1 in terms of both capital values and the sources of income. Your results since 1988 are not the same as the results of an HYP portfolio run without the features that did not form part of PYAD's HYP approach.

All I am saying is that HYP as described by PYAD is not for me, the promise of a hands off, never need to look or worry growing income is not a promise I trust after my relatively short experiment. I may end up with a portfolio with some non-PYAD HYP methods you use, I think you manage your portfolio very effectively. But in the terms I am using the nomenclature that would not be an HYP.

As Captain Mainwaring wpuld have said, I'm glad you asked me that, Pike. As it happens I took a look at my disposals after I had written that post. It may be worth listing the 41 here:

EPIC       Share                                   IRR       Since       Until    
CNA        Centrica plc                            -97.24%   17-Feb-97   06-Mar-97
Energy     Energy Group*                            34.42%   24-Feb-97   05-Jun-98
ALLD       Allied Domecq plc*                      115.52%   21-Jul-99   27-Jul-00
Syngenta   Syngenta AG                             -92.88%   13-Nov-00   23-Nov-00
BCI        Blue Circle Industries plc*              20.74%   21-Jul-99   25-Jul-01
OOM        O2                                      161.82%   19-Nov-01   20-Dec-01
MONI       Marconi                                   7.67%   24-Aug-89   21-Nov-02
BAY        British Airways plc                     -33.69%   21-Jul-99   17-Jan-03
SXC        Six Continents plc, formerly Bass plc     3.86%   05-Oct-99   15-Apr-03
IHG        Intercontinental Hotels Group plc        35.51%   17-Apr-03   30-Aug-05
PILK       Pilkington plc*                          10.53%   18-Jan-80   07-Mar-06
BG.        BG Group plc                             15.80%   08-Dec-86   07-Jun-06
BOC        BOC Group plc*                           11.69%   26-May-87   07-Jun-06
MAB        Mitchells and Butler plc                 38.20%   17-Apr-03   10-Oct-06
WTB        Whitbread plc                            10.77%   06-Aug-98   31-Oct-06
SPW        Scottish Power plc*                      10.99%   18-Jun-98   08-Feb-07
HNS        Hanson plc*                              11.75%   26-May-87   30-May-07
SCTN       Scottish & Newcastle plc*                30.20%   10-Oct-06   23-Nov-07
ICI        Imp.Chem.Ind.plc*                        10.64%   09-Feb-70   02-Jan-08
SGC        Stagecoach Holdings plc                  22.32%   21-Jul-99   05-Mar-08
CBRY       Cadbury Schweppes plc*                   11.40%   26-May-87   04-Apr-08
HBOS       HBOS plc*                                 4.69%   02-Jun-97   05-Jun-08
THUS       Thus Group plc*                          30.78%   20-Mar-02   15-Oct-08
MAY        Mapeley Ltd                             -88.99%   30-May-07   20-Mar-09
DSGI       DSG International plc                   -37.46%   24-Feb-06   06-May-09
TNI        Trinity Mirror plc                      -10.95%   23-Nov-07   22-Oct-09
AAL        Anglo American plc                       38.04%   09-Oct-08   19-Feb-10
PFD        Premier Foods plc                       -46.29%   14-Dec-06   19-Feb-10
RTO        Rentokil Initial plc                      0.34%   07-Jun-06   19-Feb-10
PRU        Prudential Corp plc                      12.45%   25-Sep-90   18-May-10
ITV        ITV plc                                  -0.51%   14-Feb-97   28-Sep-10
YULC       Yule Catto plc                           29.56%   04-Apr-08   28-Sep-10
TOMK       Tomkins plc*                              7.63%   31-Oct-06   01-Oct-10
BRE        Brit Insurance Holdings NV*             129.25%   18-May-10   26-Oct-10
NFDS       Northern Foods plc*                      -2.36%   07-Mar-06   17-Feb-11
CTT        Cattles plc*                            -81.53%   05-Jun-08   16-Mar-11
RSA        RSA Insurance Group plc                   2.37%   21-Jul-99   05-Mar-14
REX        Rexam plc*                               10.41%   19-Jan-04   27-Apr-16
PFL        Premier Farnell plc*                     10.48%   17-Jan-08   14-Jun-16
CLLN       Carillion plc*                          -93.54%   27-Apr-16   25-Jun-18
INDV       Indivior plc                             21.35%   23-Dec-14   25-Jun-18

Those with asterisks were either taken over or sold just before take-over. The rest were almost all sold because of low or no yield, or were taken private. Some only stayed a few days after demerging. Some have been with me a very long time.

Cogitate on that, if you will.

TJH

[onthemove]

I posted these numbers on a thread on HYP-Practical where it was heading off topic for the board. I thought I would post here in the hope others would share their performance numbers.

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

Given this, as far as it has performed for me,, the answer is HYP has performed badly. Very badly.

I don't hold Investment Trusts, so the relative performance of such a portfolio is a blind spot for me. How have others found different elements of income investment have held up?

I'm currently up 8% on the FTSE100 ETF tracker purchase I was referring to here just 2 months ago, when you said you weren't comfortable buying …
viewtopic.php?f=15&t=22174&p=290136#p290136

But overall...

Currently I'm up around 24% on original capital invested, with all dividends reinvested (I'm in the building stage).

I think I'm down roughly 20% capital value from a peak around Jan due to the pandemic

I think my expected dividends are perhaps around 25% -35% down on last year on the ones I'm aware of so far, but dividends from high yield ETFs are a big unknown and I fully expect I haven't seem the last of the reductions.

Sure, back in January I was much higher up... but only as a result of the returns from my HYP over the years.

If I'd got scared away from ever starting my HYP, and put my money under the mattress, sure, there'd be 0% capital loss since January.

Whoohoo!

But it'd currently be v. roughly 50% lower than where my HYP was in January!!.... it would just never have got any higher than that, so I wouldn't have felt any fall this YTD.

It's true my capital values overall are underwater on capital, had I not reinvested dividends. That's in part down to too much 'diversification' into retailers prior to the pandemic (Thomas Cook mainly! Though Debenhams didn't help), and then the pandemic.

But it has to be said, that this sort of thing is going to be inevitable when you're incrementally building a portfolio over many years.

I mean, the pandemic knocked a big % off of the total accumulated portfolio from all the top ups, capital and dividends reinvested, every year prior to January this year.

That's inevitably going to be a big knock.

The only way to avoid this effect, is to not grow your portfolio
Don't keep adding top ups each year / month, and don't let dividends accumulate. That way a drop early on will have the same net effect as more recent ones.

That my portfolio is, I believe, still up compared to original capital invested, during a pandemic in which the world has largely shut down, the US with more unemployment since the great depression, etc, has gotta say something.

Could I have avoided such a large drop by not chasing such high yields?

Who knows.

But I do know that right now, near the (as of yet so far) bottom of the pandemic, the accumulated dividends have more than compensated for the capital loss.

Had I opted for lower yields, perhaps maybe the capital wouldn't have gone so far down.

But then, the dividends would have been lower as well.

So whether that would have made any net difference? Who knows.

In theory, if the markets are efficient, on average, I should perhaps be just slightly better off than had I taken less risk.

I do know that if I'd been taking out the income to live off, then my overall portfolio value wouldn't have been anywhere near as high as it was in January, so then there wouldn't have been anywhere near as much capital to be impacted by the fall due to the pandemic.

If performance during bad times is a crucial criteria for you - after all, it seems to be what you're singly highlighting! - then perhaps cash under mattress might suit you better.

And as for your returns... perhaps your aversion to buying while prices are low is perhaps a contributing factor to your HYP returns.
(See link at beginning of post)

[Wizard]

I posted these numbers on a thread on HYP-Practical where it was heading off topic for the board. I thought I would post here in the hope others would share their performance numbers.

HYP portfolio - capital down 27%, expected income down 47%
Bond portfolio - capital down 7%, expected income down 0%
Preference Share portfolio - capital down 17%, expected income down 0%

Given this, as far as it has performed for me,, the answer is HYP has performed badly. Very badly.

I don't hold Investment Trusts, so the relative performance of such a portfolio is a blind spot for me. How have others found different elements of income investment have held up?

I'm currently up 8% on the FTSE100 ETF tracker purchase I was referring to here just 2 months ago, when you said you weren't comfortable buying …
viewtopic.php?f=15&t=22174&p=290136#p290136

...

And as for your returns... perhaps your aversion to buying while prices are low is perhaps a contributing factor to your HYP returns.
(See link at beginning of post)

Yes I do remember, but then by 3rd April I was happy to purchase VAPX, VEUR, VFEM, VJPN and VNRT in the appropriate proportions to mimic VWRL but with lower fees. I bought an amount roughly equal to my whole HYP and currently show a profit of 13.5%. But I didn't mention it as it isn't an income investment.

[G3lc]

As an overview i’m With V8 and tend to look at an ongoing mix of investments with for me events determining the flavour of the month - when I started investing 15 years ago after getting out of commercial property it was with a HY portfolio aiming to buy on the dips, getting a yield while waiting for the capital value to grow, then selling enough each year to take advantage of the tax free capital gain, while keeping on buying on the dips, apart from my OAP, my investment in the stock-market is my only income and this has worked well enough so far, but I think things may have now changed and “this time (as they say) it is different”.
More recently as well as my HYP i started investing in FI, prefs and ITs for income and overseas exposure aiming for a spread to cover for an individual market falling, but it now isn’t clear to me what the way ahead could be, apart from the FANGS (fully priced and not in my opinion fail safe - one can’t eat FANGS), the prospects for other businesses arn’t great - things will change new opportunities will emerge, so do we sit on (fiat) cash waiting for it to be taxed away, is a HYP a thing of the past as this will also finish off the HY ITs, will inflation destroy cash? Who knows in these odd times, when it would seem we will have big unemployment unless Covid gets enough of us, all governments are desperate for and will be printing what we used to call money, one has to try to get it right..........

[JamesMuenchen]

As background, I saw today that the S&P 500 Growth index has out-performed the S&P 500 Value index by an astonishing 20% year-to-date.

Since HYPs correlate to value, it is reasonable to infer a similar 20% total return shortfall in the UK as well, even if you confine yourself to equities.

Many growth stocks have had a massive tailwind from CV19, especially SaaS stocks and the subset of those related to Work From Home.
Zoom, Microsoft, Amazon, etc (many we've discussed on more relevant TLF boards) have all hit new all time highs.

One more argument for a TR focus, I think.