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Attractions of certain shares

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
Dod101
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Attractions of certain shares

#501696

Postby Dod101 » May 20th, 2022, 11:27 am

The unfortunate spat between simoan and me on the Smithson thread has got me thinking. The attractions of any particular share, such as Smithson, depends so much on what the aims of the investor are, over what timescale, his personal circumstances and so on, almost none of which is evident from exchanges on these Boards.

Dedicated HYP investors are about the only ones who might be considered a homogeneous lot and even then, we have builders and drawers. At least though, they have one dedicated aim, which is to maximise the income in the form of dividends from a portfolio. The only argument becomes how high a yield is acceptable and of course how sustainable it is likely to be.

For a share like Smithson, Scottish Mortgage and growth shares other than ITs, however, one's attraction to a particular share depends a great deal on the other issues that I have mentioned in my first paragraph, the investor's perception of the attraction of the business and of course in the case of ITs or other funds the investor's view of the manager and his charges. That is why I get a bit het up about the sort of black or white arguments that are sometimes espoused. Unfortunately for all of us, investing is much more art than science and as such there is seldom a black or white answer. As I write this I am not sure whether I am expressing myself very well, but I simply cannot accept that just because there are different ways to look at a share, one is wrong or even nonsensical, against the other which is 'correct'.

For instance, for my grandchildren it could be that say Smithson might not be a bad investment, since they can afford to take risks and they have plenty of time to allow things to mature. I would advise them of course about the high charges and so on but they would probably ignore me. For a guy of 85, (which I am not yet anyway!) it is probably not a good idea. He could probably afford to lose it but that is no way to invest. However, he may not want to have a timescale of say 5 years before he might see a result that is worthwhile.

What do others think?

Dod

ADrunkenMarcus
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Re: Attractions of certain shares

#501709

Postby ADrunkenMarcus » May 20th, 2022, 12:12 pm

Dod101 wrote:For instance, for my grandchildren it could be that say Smithson might not be a bad investment, since they can afford to take risks and they have plenty of time to allow things to mature.


Smithson makes up a huge chunk of my SIPP (almost 50%). I'm assuming I won't need the funds until 2060! There's also a broader smaller to mid cap bias which I hope will serve well over that sort of timescale, whether active or passive approaches are used.

Best wishes,


Mark.

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Re: Attractions of certain shares

#501712

Postby simoan » May 20th, 2022, 12:15 pm

Dod101 wrote:The unfortunate spat between simoan and me on the Smithson thread has got me thinking.

Dod

I'm sorry you view it that way, FWIW I didn't see it as a "spat" at all. I was merely trying to correct the balance of some points you made on that thread which were factually incorrect so that others did not get unduly influenced by them. Balance and correcting things which are factually incorrect is important IMHO so that others do not act on erroneous information.

With regard to this thread, I completely agree that people's approach to individual investments is coloured by their own personal circumstances and you should always take that into consideration when reading others points of view. Most of us have been on TLF and TMF for many years, so I assume will be only too well aware of this. I'd always assumed most HYP investors were very old people who already had a lot of money tbh!

All the best, Si

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Re: Attractions of certain shares

#501724

Postby Alaric » May 20th, 2022, 12:54 pm

simoan wrote:[ I'd always assumed most HYP investors were very old people who already had a lot of money tbh!


You might be right about the lot of money, but given that most discussions are about accumulating and reinvesting, that suggests they may not be so old.

If one had an annuity replacement, an objective might be maximise current return as withdrawals whilst running it down over a number of years, not to zero, but to some plausible residual value. It's then about what higher yielding instruments to invest in and how to run off the assets with selective selling.

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Re: Attractions of certain shares

#501818

Postby 88V8 » May 20th, 2022, 8:05 pm

Dod101 wrote:For a guy of 85, (which I am not yet anyway!) it is probably not a good idea.

My black & white may indeed differ.
I think that one should be cognisant of one's age and likely span.
It is little use investing for a long-term that one will not see.

Never held Smithson, but every share has its day in the sun. For me, riding the chariot of Fixed Interest the last ten years has been a no-brainer, but for now its day is done, and unlikely that I will be directing much more funds in that direction. I am only in my 70s, but I have to think a little on my end game even while hoping that it may be long delayed.

simoan wrote:I'd always assumed most HYP investors were very old people who already had a lot of money tbh!

Less of the very, thankyou :)

V8

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Re: Attractions of certain shares

#501820

Postby scrumpyjack » May 20th, 2022, 8:16 pm

88V8 wrote:
Dod101 wrote:For a guy of 85, (which I am not yet anyway!) it is probably not a good idea.

My black & white may indeed differ.
I think that one should be cognisant of one's age and likely span.
It is little use investing for a long-term that one will not see.

Never held Smithson, but every share has its day in the sun. For me, riding the chariot of Fixed Interest the last ten years has been a no-brainer, but for now its day is done, and unlikely that I will be directing much more funds in that direction. I am only in my 70s, but I have to think a little on my end game even while hoping that it may be long delayed.

simoan wrote:I'd always assumed most HYP investors were very old people who already had a lot of money tbh!

Less of the very, thankyou :)

V8


Ha, Ha yes what is 'old' and 'very old' is an individual perspective. I don't agree that it is little use investing for a long term that one will not see.
Firstly, unless you have a terminal illness, you really don't know how long you will last. Someone in their 70's could easily last another 20 years.
Secondly I think most people plan their finances on the basis that they do not want to be nearly destitute in their last year and plan to have something to leave their offspring. Certainly most of my pension fund is untouched and I plan to leave it to my children and grandchildren so I do invest it for the long term.

Everyone will have their own outlook and I see no reason to change the habits of a lifetime simply because I am getting older.

Dod101
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Re: Attractions of certain shares

#501840

Postby Dod101 » May 20th, 2022, 9:43 pm

scrumpyjack wrote:
88V8 wrote:
Dod101 wrote:For a guy of 85, (which I am not yet anyway!) it is probably not a good idea.

My black & white may indeed differ.
I think that one should be cognisant of one's age and likely span.
It is little use investing for a long-term that one will not see.

Never held Smithson, but every share has its day in the sun. For me, riding the chariot of Fixed Interest the last ten years has been a no-brainer, but for now its day is done, and unlikely that I will be directing much more funds in that direction. I am only in my 70s, but I have to think a little on my end game even while hoping that it may be long delayed.

simoan wrote:I'd always assumed most HYP investors were very old people who already had a lot of money tbh!

Less of the very, thankyou :)

V8


Ha, Ha yes what is 'old' and 'very old' is an individual perspective. I don't agree that it is little use investing for a long term that one will not see.
Firstly, unless you have a terminal illness, you really don't know how long you will last. Someone in their 70's could easily last another 20 years.
Secondly I think most people plan their finances on the basis that they do not want to be nearly destitute in their last year and plan to have something to leave their offspring. Certainly most of my pension fund is untouched and I plan to leave it to my children and grandchildren so I do invest it for the long term.

Everyone will have their own outlook and I see no reason to change the habits of a lifetime simply because I am getting older.


A pension fund is usually IHT free so that puts a different perspective on it as well of course. But I am wary of too ,much piling up in my general estate just for the taxman to get a chunk of it via IHT. Better give surplus away in your lifetime.

Dod


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