Member Info for zac0_4

Borrowing money to invest in the stock market . . . not for me, but good luck!

dimi123 - if you don't want people's input then simply don't ask for it. You may not agree with the feedback received but we all have differing viewpoints.

"a personal loan is NOT investing on margin" - maybe not but it's still money you're borrowing/don't have

"cost would be about £1,700 which I'll get back after just 1 year of TW dividends. The rest is profit, and with 3-4 year horizon the share price will probably be higher" - not necessarily. Had you made this decision 3 years ago you'd be sitting on a 26% capital loss today or worse still a 44% capital loss over 5 years. This could have plenty further to fall looking at forecasts for recession.

Good Luck with whatever you decide.

"What do you folks think about taking out a personal loan to invest here?"

Not a lot! It sounds totally irresponsible to me!!

Assuming you invested the lot here you'd get an annual dividend of £1,950 (your figure not mine). You say a loan will cost around £600 pm (£7,200 pa). So you must have a spare £440 (ish) each month to cover the difference. Why not set up a direct debit and invest every month in a global equity fund ie Fundsmith / Vanguard FTSE All Share Index?

That's investing, what you're proposing is gambling!

antimidas - that's one of the reasons I've pretty much moved away from individual shares.

For dividend income I use dividend paying investment trusts. Less volatile and (an almost) guaranteed dividend despite market conditions. My holdings have continued to increase their dividends annually despite covid lockdowns and individual companies cutting their payouts.

For capital growth I favour investment funds. Better diversification, less risk than individual shares and exposure to global markets. People don't seem to realise the UK economy only makes up around 4% of the global economy. There's a big wide world out there!

I sold my entire holding here in June 2020, right in the middle of lockdown, at £1.60 per share. Bit of a panic sell really but looking back no regrets.

Good Luck!

Sekforde - well let's hope that level of buy back can continue. Very dependent upon the price of oil I imagine.

In theory, yes. In practice it's very different. The buy back yield since the beginning of 2020 is around 7%. The reality is a share price decline of 7%!

You also state that the current rate of buy back is $3.5bn per quarter. Where has this figure come from? Q1 was $1.6b, Q2 was $2.4bn and to date Q3 is around $1.1bn. That's a big difference to the annualised figure of $14bn you seem to be alluding to.

"For income on a quarterly basis" - if income is all you're interested in then there are plenty of investments that offer a better dividend return than BP.

Don't forget, irrespective of your buying price, this is yielding around 4.25%

Neil37 – let me first of all say that I’m no expert so what I’m about to say should not be taken in any way as financial advice!

You say you are keen to safeguard your inheritance. Well investing 100% in a single stock is (in my opinion) extremely risky. As you are 59 years of age time is probably not on your side should the BP share price suffer a major setback. I base that statement on the fact that I am 65 years of age so invest accordingly. Having retired early at 61 and, with the exception of my workplace pension, I manage my own portfolio.

You seem relatively new to investing, and so whatever you decide to do I would suggest you keep it very simple at this stage.

I would definitely diversify. An option for consideration if you want to consider investing in a couple of funds would be to split your fund investments between one tracker, or index, fund and one managed fund.

Two I have been happy with over the years are Vanguard FTSE Global All Cap Index fund and Fundsmith Equity fund class T. Invest in the accumulation version of each fund ie any income from the holdings is automatically reinvested. If you want to take income regularly as you say both offer an automatic drawdown facility ie monthly, quarterly etc. In this way you set the amount of income you wish to take and when. Invest directly with them not via a 3rd party platform. Here's their websites: www.vanguard.co.uk & www.fundsmith.co.uk

As global stock markets have been volatile recently you may wish to drip feed your capital into funds over a period of time. However, I would say that having money in funds is probably less risky than having it with BP. Ensure you use your stocks and shares isa allowance each year and if you also set up a sipp with Vanguard you can invest £2,880 each year, also in the same fund, and HMRC will top it up to £3,600. There are other rules here which you should be aware of.

I’m not saying don’t invest in BP (I’m still here) but with what you’ve said having all your capital invested here seems, to me, to be a very risky strategy considering your objective is to protect your capital.

Nothing I’ve said should be taken as advice just some information for you to explore. Feel free to come back if clarification on anything I’ve said is needed.

Good Luck.

“ . . . maybe as the winter sets in & if oil prices increase maybe we can hit 475, i would personally be delighted with that, i would bail out & diversify . . . “

Neil, your above statement says it all to me. In my opinion you’re carrying way too much risk for a relatively small reward!

You’re holding close to £240k whilst readily admitting you’ll “bail out” if you get 11% return from here. The risk doesn’t match the reward! I would quickly diversify a large amount of your holding. There are plenty of global equity funds offering a much safer, similar, return from here.

This is a cyclical stock that's so dependent on the price of oil. It could turn down quickly. As I say, for me, too much risk for the reward you’re after.

As has been stated this is only my opinion. Good Luck!

meoryou - although I'm still slightly down capital wise here it's more than offset by dividends received to date. My total return currently sits at +25%. That's -3% capital loss and +28% from dividends. So, all in all I'm ok with that. Over the years I've held some absolute stinkers!!

I intend to continue my strategy of moving away from individual shares. I'm down to my last 3. BP, Shell and L&G. BP will be the next to go. The green strategy is fine and I agree that I should have exposure to green energy, just not via an oil company transitioning! I've a position in Greencoat UK Wind investment trust which I'll continue to build.

I favour investment trusts for dividend income and investment funds (accumulation version) for capital growth.

Good Luck!

"Who has a holding priced at more than 466?"

Thankfully, not quite! Average currently sits at £4.45

Chandley-1976

Thanks for the response. That makes perfect sense. Good Luck!

Chandley-1976 ". . . slap it in a no doubt pending 2% APR savings account . . . "

Why won't you invest elsewhere rather than deciding to hold cash?

too excited with regards to the dividend increase. It's still over 40% down on its pre-pandemic level!

" . . . So since beginning of year we've spent about $4bn to remove 573m . . . shares from the market"

Year to date BP have spent $4.494bn buying back 875m shares. So, an average price of $5.14 / £3.95 (ish!) per share.

" . . . It would be good to see how many shares are in circulation monthly or at least quarterly . . . "

They issue a RNS on a monthly basis entitled 'Total Voting Rights' which provides exactly what you're looking for. It's available on this site.

. . . as to the value of buy backs.

I have numerous investments, one of which is an investment trust investing in UK wind energy. They've just announced their half year results and, unsurprisingly, have generated a large amount of cash on the back of high energy prices.

No buy backs announced. Simply a commitment to, (i) a year end dividend increase in line with inflation, and perhaps more importantly, (ii) continued investment in UK wind projects to grow future earnings. That I like.

Now I realise there's little comparison between BP and the trust in question. However, I can't help wondering if the cash being used for buy backs couldn't be better utilised for investments rather than simply reducing the shares in circulation. That's not growing the business. Investing is.

Unless, of course, I'm missing something and a large proportion of the BP cash generated is being invested and I'm simply not aware of it!

Whilst I'm looking forward to q2 results I'm not expecting them to provide any meaningful movement to the share price.

For me what's expected is priced in.

Try www.dividenddata.co.uk

TinkerT - I agree with your analogy. I keep waiting for the catalyst to push this higher but despite record profits, a very high oil price, volumes back to pre-pandemic levels and aggressive buy-backs the share price pretty much stagnates.

What to do? That's the question I need to answer. Both my heart and mind are now saying it's time to say goodbye to BP. Yes, oil prices may go higher and with them the share price. But once the oil price starts to retreat there's only one way I can see the share price going from here and that's down!

It's always difficult saying goodbye to an old friend so I may hold on a little longer!