Member Info for zac0_4

I wasn't aware there was a % threshold required to post on this forum. I've just done the maths and my holding here represents around 3.25% of my total portfolio value. I hope that is enough to qualify!

" . . . take the S&P500 was 22% down last year and 7% down the average this year without the big 8 involved . . . "

Then it's not the S&P500 with almost 30% of the market cap removed is it? Get real!!!!

Yes. But you were very specific in stating you bought in on the day of the Truss budget at 242p. It was 284p on that day. So, are you now saying you bought in later?

Monkeyman99 - " . . . China will always be a gamble due to the political implications. So only a fool would ever go big on exposure there. Having said that did buy this last year day of the Truss budget at 242p . . . "

The day of the Truss budget it was 284p!!!

" . . . example buying into LGEN at a 10% pullback is a good time to buy . . . with the cash you have made from profit taking with the rally this year . . ."

If only it was that simple!!!!

Not just yet (:

" . . . What I see if you buy this you are gambling that China recovers again . . ."

if that's your view, and you don't consider that likely to happen . . . then don't invest here! Simple.

". . . I bet you’re on this now Zac? . . ."

If you mean am I invested here? Yes. I hold in my Fund & Share account, ISA and SIPP! First invested in October 2015 and continually added since. This is my last single dividend paying share.

Planning to sell both my holding in my Fund & Share account due to tax changes regarding dividend allowance and my SIPP as I'm moving away from dividend paying holdings all together there.

Dividend payers used to represent 30% of my total portfolio. This is down to 25% (due to selling not capital reduction) and the aim is to get it down to around / below 20% by year end.

"The healthy dividends have to be taken into account in any 'share price' discussion . . . "

They do. But so does any reduction in the share price. Using your 2021 start date we've received dividends to date of 58p. In return we're sitting on a reduction in the share price of 52p.

So, at the moment a total return of just over 2% during best part of a 3 year preiod. Could be worse I suppose!!

I'm not convinced with regards to a cut in dividend. Why pay a dividend at the end of August that's 1.2% higher than the previous dividend payment 3 months earlier if you're planning a cut?

Also, statements made in February's half year report don't ring 'dividend cut' alarm bells to me. Here's a couple I've picked out . . .

"Dividends remain the ‘bright spot’ with dividend growth likely to exceed expectations . . . "

"the dividend income generated by the portfolio has risen 14.7% compared to the same period last year . . . "

I know no more than anyone else. I'll continue to hold and see what happens . . . at about 3.5% of my total portfolio value I'm happy to hold in ignorance for the time being!!

Dividend paying holdings used to represent around 30% of my portfolio. That's now down to 25% (based on sells not capital erosion!) with a plan to reduce further to around the 20% mark.

This was my largest dividend paying holding. It was split across my SIPP and ISA. I sold my SIPP holding at £2.43, just prior to last ex-div date. That seems like a good move now!! The sell cost me a capital loss of 30.4% offset by dividends recieved to exactly the same amount. Currently my ISA holding is down 35% in capital terms offset by 25% dividends received. I reinvested my recent dividend here in the hope (not a reliable strategy) that at some point it will turn around.

I don't know what to make of it. If you overlay HFEL sp graph on top of a graph of the Hang Seng Index they track each other. I don't know if that's telling me anything. The current high yield is only high because of the falling share price. I think their year end is at the end of this month. Hopefully we'll get a better picture when the annual report is published. There wasn't anything to unduly worry about in the half year report published for the end of Feb, unless I've missed something. All seemed positive, dividend wise, at that point.

For me I guess it's wait and see!

. . . 8.5% rise in the share price from here by year end coupled with our 7.8% dividend yield and we'll have managed to break even during 2023. Better than our total loss of 9.5% last year I suppose.

Thankfully I'm well diversified and the above reinforces my decision to move away from single shares!

" . . . LGEN is a business on a completely different scale with a very different risk profile . . ."

It's still a single share, though, and with that comes an increased level of risk compared to a fund or trust. Putting the dividend to one side we require an 18% increase in the share price just to recoup capital reduction since the start of the year.

Single shares are fine . . . until they're not!!

Diversification is the name of the game for me. This is now my last dividend paying single share.

I would agree totally if it was a single share.

Robleo - be careful! Don't be seduced by the promise of healthy dividends. That's only part of the story!!

With the exception of AEW all have lost a considerable amount of investors capital over the last 5 years. AEW sp is about flat during the 5 year period. The others will have lost you -17%, -37%, -49% and -56% of your capital.

I'm afraid that tells me all I need to know!!

Remember - protect the value of your capital. As boring as that global tracker fund is it would have grown in value by almost 50% during the same time period. You tell me which is best.

Most of the REITs I'm aware of have the same uncanny ability to lose capital over time!

I posted yesterday that currently what I consider to be my dividend paying holdings represent about 30% of my portfolio value. My aim, when the time is right, is to reduce this level of exposure to around 20%

I hold a couple of absolute stinkers. HFEL, current yield of 11.2% and CQS New City High Yield Fund yielding 10.25%. However, I've really paid for my dividends in lost capital value over the last 12 months. HFEL is down 14% and New City down by 7%. However, I've got good old reliable Legal & General which is only down 16%! It's funny how perception can catch you out!!

Gwm121 – I’ll take your points individually

“are you saying you didn’t go for an annuity? . . . “ All the points in my previous post where referenced to my portfolio outside of my pension. However, no I didn’t go for an annuity I’ve simply put my main pension pot into drawdown

“what's the advantage in transferring divi to an external fund then drawing off this . . . “ If I receive a dividend of, say, £500 in my ISA which I want to withdraw I’ll sell units in a fund outside of the ISA to the value of £500 and repurchase the fund units in the ISA. In this way I’m growing the capital value in a tax free vehicle

“.. I’d hoped to find a low cost fund like vanguard with high enough divi to use that . . .” I keep my dividend holdings and funds separate. Funds are to protect and grow my capital, dividends provide me with some reassurance of income

“difficult to match 8pc div from a basket like vod, lgen, aviva, uk wind and Glaxo . . .” Maybe, but at what cost? Here’s the capital performance over the last 6 months: -30%, -15%, -15%, -17% and -7%. If you’re not careful you spend a fair amount of time simply playing catch up with dividend holdings. A global equity tracker fund is flat over 6 months so, at least, has protected the value of your capital

“Interested how you think lgen recent purchase price will do while you take the 8pc div . . . “ I’ve no idea and neither has anybody else here!

Meconopsis – some very relevant points in your earlier post.I took early retirement in 2018, primarily on the back of having invested every month for close to 25 years. Tons of mistakes, tons of learning which I’m still doing today.

Currently my portfolio is around 30% in dividend paying holdings. My plan is to get this down to closer to 20% over the forthcoming 12 months. I’ve also been moving away from single shares into investment trusts for my dividend paying holdings. LGEN is my last single share having sold BP and Shell earlier this year. Less risk of a catastrophic single share failure. Having said that I’ve recently taken small positions in both Microsoft and Nvidia. I’ll never learn!!

All future dividend paying holdings will live in my ISA once I’ve culled the balance sitting in my SIPP and normal fund and share account. I don’t actually take the dividends directly from my ISA, I simply reinvest them, within my ISA, into a fund which I own outside of the ISA and sell down the equivalent value of that fund for income. In this way I build up funds in the ISA.

The balance of my portfolio (currently 70%) is in funds. Some managed some passive.

I agree with your comments on the psychological element of selling down fund units and also the comfort of receiving a regular dividend income. My data clearly shows this doesn’t produce the best return but I’m ok with that for a diminishing proportion of my portfolio.

My largest holding, at 25%, is in Fundsmith. I draw down a monthly income from this holding. I invest directly with them, so no platform fees, and set my own figure for the monthly amount annually so that minimises the psychological effect as I don’t have to manually sell units. The money just lands in my bank account on the 4th of each month.

I’m very conservative at the overall amount I withdraw from my portfolio each year trying to keep it around 2-3%. It’s worked so far in so much as my last 5 year total returns have been +20.9%, +0.7%, +17.4%, -9.7% and year to date +3.4%. I’m clearly finding that it’s getting more difficult!!

Good Luck

" . . . fundsmith seems bit risky . . . "

Since inception, in 2010, it's delivered growth in 12 out of 13 calendar years. In 9 of those years double digit growth. Year to date this year it's looking like delivering a double digit return yet again.

It's diversified across 30 (ish) companies. However, as has been stated that appears to be a 'bit risky', I assume compared to a single share that's delivered a loss in 5 out of the last 10 years (inc 2023)