Why High Yield?

[Itsallaguess]

The question is not "Why High Yield?" but "why High Yield here?"

Maybe I am being Hypersensitive but aren't there whole swathes of this site dedicated to just that where everything that could possibly be said has already been said many, many times?

Because the OP wanted to discuss and compare a high-yield investment strategy to a total-return investment strategy.

Doing that on the HYP Practical board would be off-topic for the tight remit of that board, so he is absolutely right to look elsewhere to discuss the topic if it's something that interests him.

If the 'Investment Strategies' board isn't the place to then discuss and compare two completely distinct investment strategies, then I'm really not sure where would be....

I, for one, came here to escape from it..

Then why get involved with a particular topic that doesn't interest you?

There are many, many topics that don't interest me on these boards, and I don't have any problem at all in just ignoring them and focussing on the ones that do...

Cheers,

Itsallaguess

[Hariseldon58]

Earlier in this discussion there was a mention that High Yield investing was a “comfortable” strategy for many, that is a pretty sufficient reason for those individuals, they follow a strategy and stick to it because they are comfortable with it. Over time provided costs and trading are kept fairly low and the income is received in a tax efficient manner, it’ll probably work out just fine.

My early experience from say 1990 to 2007 that an equity income approach ( largely U.K. investment trusts) worked out very well on a total return basis but less so since then.

Personally a global tracker approach has worked very well on a total return approach ( in truth largely because of significant US exposure)

I rather winder that with Value having a bad run over recent years and the current low interest environment ( ie high income stocks are expensive taking into account all factors) that High Yield investing is facing headwinds...

I looked back at my records and found I held a UK income focussed unit trust in 1990 that had a running yield of nearly 8%. In hindsight it was a value fund !

[ADrunkenMarcus]

I looked back at my records and found I held a UK income focussed unit trust in 1990 that had a running yield of nearly 8%. In hindsight it was a value fund !

What happened to the dividend payments in 1990 and the years afterwards? I assume the 8 percent dividend yield declined, either as the capital growth outpaced growth in dividends, or if the dividends reduced.

Best wishes

Mark.

[Alaric]

I looked back at my records and found I held a UK income focussed unit trust in 1990 that had a running yield of nearly 8%. In hindsight it was a value fund !

Back in 1990, couldn't you get that sort of income as a redemption yield from Gilts and even higher from Corporate Bonds or Prefs? The Aviva Prefs that they threatened to redeem at par not so long ago have double digit coupons and were new issues about that time.

If you used a relative definition of "high yield" as being where running dividend yield is greater than risk free yield, nowadays most equities would qualify. Only companies that weren't making any distributable profits or where the Directors retained most or all profits in the Company would be excluded.