Member Info for zac0_4

Apologies, correction from previous post relating to L&G International Index performance

"However, your capital is now worth £11,935. So a total return of £5,245 or 52.4% . . ."

Meconopsis
“ Maximising return and ignoring risk was everything . . . “

That’s not what I said. Nor is it what I meant. Too many investors (not necessarily here) simply focus on dividends and ignore what’s happening to the value of their capital. I don’t. I focus on the total return ie capital value and dividend payments received. And I stand by my view.

Here’s an example – If you’d have invested £10,000 here on the 1st January 2018 you’d have received dividends to date of £3,310.However, your capital is now worth £9,222. So a total return of £2,532 or 25.3%

If you’d have invested the same £10,000 into Legal & General International Index 1st January 2018, and simply sold down units at the end of each year to the same value as your L&G dividends, you’d have drawn down the same value £3,310. However, your capital is now worth £15,245. So a total return of £5,245 or 52.4%

Then ask yourself which poses most risk? An individual share in a single sector and geography or a global equity fund invested in over 2,200 companies across multiple sectors and geographies?

I hold both and, currently, have room for both. Good luck.

robleo

"once they hopefully come back into profit or at least lessen the loss from them as much as possible i will be selling them off and reinvesting that money into funds . . . "

I think you need to ask yourself the question as to whether, from here, you think the funds you have in mind will outperform the shares whilst they recover? If you think the funds are a better bet then the answer is to sell and move to funds now.

I have a similar dilemma. My funds continue to outperform a number of my dividend paying holdings but I'm finding it difficult to say goodbye to old friends . . . even if they've let me down!! At the end of the day total return is all that matters.

lti
''currently have an average cost price of c. £3.45

that is hard to achieve over that period when the top price has been about 370p."

I can confirm, having now checked, that my average cost per share is £3.42. 1st purchase made in May-17. Highest price paid to date £3.67 and a low of £2.84.

My capital is down 23% which is offset by 25% of my investment cost having been received in dividends.

I can't see me investing further here. At this time I simply view that as throwing good money after bad. Whilst I do have a number of dividend paying holdings, analysis shows I'd be better off simply investing in a global equity tracker fund and drawing capital as and when required. I'm at breakeven here after 5 years. My holding in Legal & General International Index is up 65% over the same period. Thankfully I'm very well diversified! It's just a pity this is my 3rd largest holding!!

"I repeat, the only share prices that are relevant are purchase and sale prices . . ."

You are, of course, correct. However, it's the damage that's done whilst holding that's of concern to me. I first bought into HFEL in 2017 and (without checking) currently have an average cost price of c. £3.45

However, if I look at returns over the last 5 calendar years this has been an appalling investment most years.

2018 tr -3.3%, 2019 tr +12.6% (whoopee!!!), 2020 -4.9%, 2021 -1.7%, 2022 -0.4%. Total return over the 5 year period +1.6%. If it manages to hold the current sp until year end the tr will be a little over 5%. Yet another year watching capital decline in return for a high yield. What's the point?

anon3 - surely the £85k fscs you refer to is irrelevant? The platform is acting as a nominee on your behalf when purchasing shares. If it got into financial difficulty it must hold some form of register listing actual shareholders. It would be LGEN getting into financial difficulty that would present me with more of a concern.

Thanks for feedback. I've taken a look at iWeb and they appear to have an initial £100 opening charge. Also, they don't appear to offer the range of investments I'd be after. I'll stick with HL, Fidelity and Fundsmith direct, which is by far my largest holding.

Cheers

Meconopsis - who for shares in an isa?

Capped at £45 per annum in HL ISA for shares, etfs, investment trusts. Fund charges are 0.45% year with no cap.

Well one thing's for sure when you hold shares in a 'crap' company is that over time they'll destroy value rather than create it. I sold my holding in NRR back in 2020 at a 5 figure loss!! In hindsight it was the right thing to do.

Supposing you held the value of your Vodafone holding today in cash. Where would you invest it? If the answer to that question is not Vodafone then you need to sell. But that's only my opinion, not advice!!

robleo - well on the basis that you think they're "crap", I think you should sell them!

I guess when you're giving over 50% of your profits back to shareholders in the form of dividends, growing the market cap of your business isn't an easy task. You can't have it both ways.

"-13% makes it sound like a poor investment: but is that true, I think not"

Well, that depends on your view I guess. Over the 5 year period in question you'd be sitting on a total return here, dividends re-invested, of c.21%. Had you simply bought into a global equity index fund over the same time period, let's use L&G International Index as an example, you'd have enjoyed a total return of close to 54%.

You make your mind up as to which has come out on top!

Gary59 - I agree. A well managed global equity fund is the way to go and drawdown on capital as and when required. Far too much risk in individual shares.

Good luck looking for a share with 'sex appeal' in the UK stock market!

I'm fine holding L&G as part of a broader, balanced portfolio. For me it's a £2.50 / £2.60 ish share. I'm primarily here for the growing dividend. I've an average cost price of around £2.40 ps. The volatility in the sp is useful. I have the choice currently as to whether I wish to lower my average cost price whilst further locking in a 8.5% growing dividend.

That's provided I'm confident that it will recover to the £2.50 ish level. It always seems to. No guarantees obviously.

The share price is only a real concern to me if I want to sell and I haven't felt the need to for many, many years.

It's hard to remain optimistic! It's always jam tomorrow. I'd made the decision to continue to hold throughout this year and will probably do so. However, the 8.7% dividend yield available at the start of this calendar year has already seen a decline in my capital of over 1.5%.

It will come to the point where I'll finally see sense and move to a more quality holding based on total return.

. . . coupled with what seems like a never ending decline in the share price!

You might be right. Alternatively you might not be. The decision is yours.

Me, I've decided to continue to hold. If the share price simply stays at todays level until year end and we see a 5% increase in the dividend, not guaranteed I know, then the total 2023 return here will be c.9.2%. I'm ok with that.

Whilst a 5% year on year growth in the dividend is certainly not written in stone I do expect a growing dividend policy to continue.

If earnings per share was simply to sit at its current level and the dividend to increase by 5% pa it would be 12 or 13 years before the dividend wasn't fully covered. I'm hopeful of a continuing annual growth in the dividend for some time to come.

I agree that L&G isn't the most exciting of shares. However, it's one of my few remaining individual dividend paying holdings. I've now moved to Investment Trusts for dividends and Investment Funds for capital growth.

I've held this since October 2015, topping up along the way. My average buy price is £2.41. So, only around 7% capital growth but dividend income equivalent to 43% of my investment. I'm ok with a total return of 50% over 7.5 years. I accept it's not the best but it certainly isn't the worst return I could have had during that time period.

I'll continue to hold as part of a balanced portfolio.