Income portfolio opinions

[Dod101]

The reason that RGL has an apparent yield of 10% is because its price has dropped so much.

It either has a yield of 10% or not, there should be no 'apparent' to it. The use of 'apparent' sounds like a bit of kidology. So the yield of 10% is because the capital value has dropped a lot. The next question is why has that happened? Is it likely that there will be a dividend cut? That is the usual reason.

No. That is rarely the reason. It is often a consequence of the real reason though.

I agree that with property companies you are probably correct but for many trading companies that is very often the reason.

Dod

I strongly disagree.

Dividend payments are dependent on the cashflows of the underlying business. They are also under the control of Directors who are reluctant to cut them.

Having a belief that it is a dividend cut, or a predicted one, that results in a falling share price is the wrong way round. Dogs wag tails. Tails don't wag dogs.

You are entitled to your view but it is neither my belief nor experience. The market often reacts to anticipation of a dividend cut. I am surprised, if that is what you are denying, that you have not seen this yourself. I remember some years back, when miners were entering a recession and their share prices were tanking. I wrote at the time, 'It is like a bus coming down the road, with Deep Cut on its destination board' The anticipated dividend cut duly happened.

Dod

[simoan]

The OP asks for opinions.

Well I think that this is not a solid portfolio to give a flow of income through decades of retirement, because it looks capable of doing that by paying a good part of that income from its own capital, as it has done so far.

I would sell the lot NOW, take the pain, and rebuild with the help of the contributors. Long term it would be well worth it.

However the OP seems defensive to me and happy about his choices, so fine, it is his money.


Bagger

The OP asked for opinions on the investments in his portfolio, not advice. No-one should be providing advice such as yours to anyone without knowing the age, stage of life and full financial situation of the recipient. Telling someone to sell everything and take advice on re-investing from people who will never have to look them in the eyes if it goes tits-up is wrong. None of us know what the future holds; there could be a big bounce back in commercial property in the next few years and this portfolio could do well.

I think my views on investing for income only are well known, but even I would not provide advice, especially to change tack so abruptly. I see no problem with the Vanguard holdings: they are low cost and low risk investments ideal for a conservative investor but most of the other holdings are unfamiliar to me apart from the joke that is IUKD.

[88V8]

The title talks about options. I have an income portfolio made up of 24 individual shareholdings....

... which are?
Or is this like The Mousetrap... do we have to guess?

What is your interest in other people's portfolios?
You asked about mine the other day in responding to a post on another thread. On providing details it generated no response or even a "thanks".

Ahh yes, here viewtopic.php?p=549115#p549115.
Sorry that I didn't respond.

Perhaps unrealistically I was hoping I suppose for something more concrete that would show your philosophy and learning in action in terms of actual stocks. Given the extent of your portfolio I realised that was probably not practical.

In the same way, here we are in a thread where the OP is asking for comment on specific choices, and it seemed reasonable to ask Dod who has a lot to say on such subjects to illustrate his ideas through his own holdings.

In the end, income investing comes down to the purchase of individual holdings, whatever the theory or philosophy behind it.

V8

[dealtn]

Perhaps unrealistically I was hoping I suppose for something more concrete that would show your philosophy and learning in action in terms of actual stocks. Given the extent of your portfolio I realised that was probably not practical.

Well a list of stocks won't give you that.

At best it will give you what is currently held, and by implication what isn't currently invested in.

That's fine if all you are interested in is the "what" but to understand the "philosophy and learning in action" you need to know the "why" (and when, what price etc.) That's a whole different set of questions and can be found to some extent in various posts over a number of boards.

[Dod101]

The title talks about options. I have an income portfolio made up of 24 individual shareholdings....

... which are?
Or is this like The Mousetrap... do we have to guess?

What is your interest in other people's portfolios?
You asked about mine the other day in responding to a post on another thread. On providing details it generated no response or even a "thanks".

Ahh yes, here viewtopic.php?p=549115#p549115.
Sorry that I didn't respond.

Perhaps unrealistically I was hoping I suppose for something more concrete that would show your philosophy and learning in action in terms of actual stocks. Given the extent of your portfolio I realised that was probably not practical.

In the same way, here we are in a thread where the OP is asking for comment on specific choices, and it seemed reasonable to ask Dod who has a lot to say on such subjects to illustrate his ideas through his own holdings.

In the end, income investing comes down to the purchase of individual holdings, whatever the theory or philosophy behind it.

V8

Dear V8. I could write a book on my choices and will happily expand on my philosophy but most I think know it already. Sadly I have made enough posts!

Sign of an idle mind.

Dod

[PrefInvestor]

Here is a more comprehensive set of comments on the OPs portfolio:-

1. Holding weights far too high for my liking. Big weights make for big losses and should be avoided IMHO. That way if one holding drops 10% the effect is minimised. I prefer a portfolio with lots of holdings and very low weights. Depends on portfolio size though, suggest 10% max on smaller portfolios. Just my opinion.
2. IUKD a poor ETF given its stock selection method IMHO.
3. VHYL I hold doing OK.
4. VFEM not familiar with this.
5. HFEL I hold but it hasn’t done well. Nice yield, but a value trap ?.
6. VUKE unimaginative holding – could do better, especially with FTSE 100 high like now. Why not Equity Income eg MRCH or CTY instead ?.
7. RGL problematic REIT IMV. Yield too high and not fully covered. Office only policy a potentially big problem IMHO.
8. API & CLID other commercial property holdings I haven’t heard of, but I would hold ANY funds the Abdn brand personally as none I have EVER tried have performed well. Just a personal opinion.
9. HDIV good yield & quite well diversified. Might do OK.
10. No green infrastructure trusts ?. Safe, stable and high yield some paying RPI linked dividends.
11. No Prefs, Bonds or Other Fixed Interest investments. Prefs pretty bombed out and are solid payers that will pay you good yields once purchased, potentially forever. BOI ditto.
12. More overseas holdings (investment trusts and ETFs) all high yield would be an idea.
13. No infrastructure, energy or commodity exposure ?.
14. No high yield FTSE 100 financial holdings LGEN, AV., MNG…..?.

No “advice” intended just my comments and observations. OP (or anyone else) should DYOR etc.

ATB

Pref

[Bagger46]

Well done Pref, much of this analysis of yours might help the OP, if he chooses to take action.

I was not giving advice either, was careful on my phrasing (although the new resident bully on these boards thought so), just stating my opinion. Which I do hope the OP will seriously consider, because his portfolio is not fit for purpose IMO. I think after 50 odd years successfully investing, in the markets and businesses, I was qualified to give an opinion. But the new bully thought different.

This post will be my very last, as I have asked a moderator to get my account closed for good, something I have contemplated for a while anyway. I will concentrate on discussing investing with friends and family.

Cheers, have a good Xmas and 2023 all,

Bagger

PS: Our stock market portfolios, my wife and I, will fail to produce £150k of income in 2022, by a whisker ( around £600 short depending on exchange rates by year end). Average yield is 1.73%. You do the maths, not a bad return since we started married life with a nice overdraft, never accepted any inheritances offered to us, twice, and that our market based investments are about 50% of our net worth, by 'design'. A very large proportion tax sheltered, but we do pay tax, plenty, I have never minded a bit. Better to have to than not IMO.

[MDW1954]

This post will be my very last, as I have asked a moderator to get my account closed for good, something I have contemplated for a while anyway. I will concentrate on discussing investing with friends and family.

Cheers, have a good Xmas and 2023 all,

Bagger

Moderator Message:
I am that moderator. You will be much missed. Certainly by me. In my view, it is a shame that certain comments were phrased as they were.

MDW1954

[ukmtk]

Many thanks to all for taking a look and making suggestions regarding alternative avenues that I could consider.
I would never consider the suggestions as financial advice but take them as helpful advice.
I always say to people "this is what I have done but I'd suggest you do the opposite as I normally do badly".

[Dod101]

Well done Pref, much of this analysis of yours might help the OP, if he chooses to take action.

I was not giving advice either, was careful on my phrasing (although the new resident bully on these boards thought so), just stating my opinion. Which I do hope the OP will seriously consider, because his portfolio is not fit for purpose IMO. I think after 50 odd years successfully investing, in the markets and businesses, I was qualified to give an opinion. But the new bully thought different.

This post will be my very last, as I have asked a moderator to get my account closed for good, something I have contemplated for a while anyway. I will concentrate on discussing investing with friends and family.

Cheers, have a good Xmas and 2023 all,

Bagger

PS: Our stock market portfolios, my wife and I, will fail to produce £150k of income in 2022, by a whisker ( around £600 short depending on exchange rates by year end). Average yield is 1.73%. You do the maths, not a bad return since we started married life with a nice overdraft, never accepted any inheritances offered to us, twice, and that our market based investments are about 50% of our net worth, by 'design'. A very large proportion tax sheltered, but we do pay tax, plenty, I have never minded a bit. Better to have to than not IMO.

I am sorry to read this but obviously cannot/will not comment on the problem. I wish you and your family well. It is always a huge shame to lose posters who just get on with things and are successful at it. We can all learn from posters like you.

Dod

[simoan]

So I'm a resident bully am I now? Anybody would think it was me that told the OP to sell their entire portfolio because it was rubbish, and to listen to them and others on what to replace it with. Is that not bullying? Is that not financial advice which they are not qualified to give? Unbelievable.

All the best, Si

[MDW1954]

Is that not financial advice which they are not qualified to give? Unbelievable.

All the best, Si

Well, no. Because the site's rules are very explicit on that:

Users should note that absolutely no discussions regarding finance or investments should be given or taken as 'advice', and is given and received only as the personal opinions of the posters themselves.

MDW1954

[OhNoNotimAgain]

It is always a huge shame to lose posters who just get on with things and are successful at it. We can all learn from posters like you.

Dod

History does not support that statement.

[Dod101]

It is always a huge shame to lose posters who just get on with things and are successful at it. We can all learn from posters like you.

Dod

History does not support that statement.

I have no idea what you mean and frankly it does not matter much anyway. We are all just names of people who care to post on a website with no idea who or what is behind them, signifying nothing.

Dod

[moorfield]

What else should I consider adding?

<investment trust hat>

I've missed much of the handbags of this thread, but to answer this one question - You have a bit of a mix there, but take a look at the AIC website for research: https://www.theaic.co.uk/aic/statistics/aic-sectors, and consider diversifying holdings across these.

For example, (I recently posted a similar example elsewhere)



(*) Other/more sectors are available, but most of the usual high yield income IT suspects can be found in these

</investment trust hat>

And for ongoing portfolio management, look at TJHs method which limits the cost of and income provided by holdings. That is a sound technique that can be reapplied to any portfolio imo regardless of whether it holds individuals or collectives. (But what limit you use and when/whether you choose to trim etc. is up to you.)

[moorfield]

It is always a huge shame to lose posters who just get on with things and are successful at it. We can all learn from posters like you.

Yes let's hope it's a two or three week flounce(*) rather than a permanent exeunt. We've all done it at one stage haven't we (me included)


(*) not intended to be derogatory, it's a common occurrence in t'internet parlance.

[simoan]

Well, no. Because the site's rules are very explicit on that:

Users should note that absolutely no discussions regarding finance or investments should be given or taken as 'advice', and is given and received only as the personal opinions of the posters themselves.

But this is just usual bum covering legal clause to protect the site. I see posters clearly asking for advice and being provided with it on a daily basis. You can call it an opinion but would it stand up in court? Interesting you missed out the first part of that rule:

Any views expressed herein remain the responsibility of the user posting the views. LemonFool takes no responsibility for the content posted by its members.

[Alaric]

I see posters clearly asking for advice and being provided with it on a daily basis. You can call it an opinion but would it stand up in court?

Financial Advisors, whether independent or tied, sought to gain a monopoly over comment on financial matters using the 1986 Financial Services Act. That always had an exemption for journalist comment. When the internet became more generally available in the early 1990s that allowed discussion on financial matters, to the discomfort of those who didn't want their lucrative commission deals questioned.

I'm not aware that Lautro, the FCA, the FSA and other members of the alphabet soup of regulators have ever had the courage to mount an attack on sites hosting independent opinions on financial matters. That includes discussion of specific investments and critical assesment on what the regulators consider "correct" advice.

[tjh290633]

Well, no. Because the site's rules are very explicit on that:

Users should note that absolutely no discussions regarding finance or investments should be given or taken as 'advice', and is given and received only as the personal opinions of the posters themselves.

But this is just usual bum covering legal clause to protect the site. I see posters clearly asking for advice and being provided with it on a daily basis. You can call it an opinion but would it stand up in court? Interesting you missed out the first part of that rule:

Any views expressed herein remain the responsibility of the user posting the views. LemonFool takes no responsibility for the content posted by its members.

The best way is to say "If it were me, I would do so-and-so", or something similar. Qualified with "It's up to you to decide what to do". If people suggest that the OP considers alternative options, that is merely discussion between peers. As I see it, giving advice is telling the OP to buy so and so, or to sell something. Discussing alternatives is definitely not.

TJH

[simoan]

Well, no. Because the site's rules are very explicit on that:

Users should note that absolutely no discussions regarding finance or investments should be given or taken as 'advice', and is given and received only as the personal opinions of the posters themselves.

But this is just usual bum covering legal clause to protect the site. I see posters clearly asking for advice and being provided with it on a daily basis. You can call it an opinion but would it stand up in court? Interesting you missed out the first part of that rule:

Any views expressed herein remain the responsibility of the user posting the views. LemonFool takes no responsibility for the content posted by its members.

The best way is to say "If it were me, I would do so-and-so", or something similar. Qualified with "It's up to you to decide what to do". If people suggest that the OP considers alternative options, that is merely discussion between peers. As I see it, giving advice is telling the OP to buy so and so, or to sell something. Discussing alternatives is definitely not.

TJH

It depends on what the so-and-so is but you're right. Most of the discussions on this site are what the FCA would consider as guidance, which is fine, anyone can provide guidance. However, as soon as you instruct someone to buy or sell an investment you are unequivocally providing advice and if you are not an FCA authorised adviser you have crossed the line and broken FCA regulations. Apart from the sheer arrogance and lack of empathy for the OP displayed in the post, this is what I was objecting to. It's a total no go - you cannot tell anyone to buy or sell an investment regardless of the rules of this site. The FCA definition of what constitutes advice is very clear.

All the best, Si