Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi Mark - thanks for your response which, although I might not agree with, I respect.
You are correct. I sold out on 7th Feb last year at £5.14p per share. Had I waited a little longer I could have enjoyed another 10% or so. However, I've no complaints.
50% of the capital went into a simple global equity tracker fund, 25% into a small/medium cap trust and the balance was split 50/50 between 2 individual US tech stocks.
Had I stayed with BP I'd be sitting on a 2.6% loss over the last 12 months. However, the return from the portfolio listed above is in profit to the tune of 32.2%. So, it's outperformed BP by almost 35%.
I also sold my Shell holding a little later. Had I stayed with Shell I'd have at least seen a profit over the last 12 months of 5.4%. So, again an outperformance vs BP of 8.0%.
Good luck with your investment here, I hope your views come to fruition.
MarkGo - I'll answer your question but would ask that you answer my couple in return
" . . . What interest do you have in BP now. You sold out previously so why give a history lesson on the share price. . . . "
Simple. I'm coming up to the 12 month anniversary of my sale and like to review if my decision to sell and reinvest elsewhere was the correct one
And for you
" . . . I intend on holding until real value is obtained . . . " And when do you see that happening? And what is the catalyst that is likely to deliver real value? Today's share price is lower than it was 10 years ago!!
A few of you may know I'm a big fan of funds, for a number of reasons. As capital gains tax allowances continue to reduce they're very useful for realising profits.
If you take 2 global equity tracker funds, L&G International Index Trust and Fidelity Index World as examples, they are (almost) identical in their make up and produce (almost) identical results.
Accordingly if a profit is made outside of an ISA / SIPP you can sell your holding in the one you hold realising your capital gain within the allowance and reinvest in the alternative fund and start the process again. Really useful.
As for direct exposure to India, well I'm not that clued up to make a decision one way or another and so am happy to have a level of exposure that a global equity tracker fund allocates me! As the Indian economy grows I actually think it will be Western companies supplying goods into the Indian market that will benefit - Apple, Microsoft, Unilever etc etc etc
Robleo - " . . . I hope Zac is not going to be a wet blanket and tell you how much you could have made if you invested in lgen global technology fund . . . " - as if I would!
To comment on whether you consider Mr Math's return to be 'very nice' you'd need to know how much was invested and over what time scale.
However, at the end of the day it's not what you or I consider to be a good return it's up to Mr Math and if he's happy with his return then that's all that matters. I do agree with his strategy of 'buy and hold' though. It works for me in most cases.
" . . . it’s still a good price to sell at the moment most people bought around £2 to £2.20 so that double bubble without the dividends . . . "
Maybe. But as each year ticks by annualised returns reduce.
People need to be aware that over the last 10 years average annualised returns have been 3.75% pa
In my opinion it's vitally important to look at performance over the long term ie 10 years. I hold both L&G International Index Trust and LGEN. I've no idea what the next 10 years will bring but historcally . . .
L&G International Index has delivered an annualised average growth rate over the last 10 years of 11.96% pa
LGEN has delivered an annualised average growth rate over the last 10 years of 6.22% pa
The result is that the fund has delivered a return of 209% over that period whilst the individual share 83%
Presently I'm comfortable with both. Although I'll continue with my strategy this year to reduce exposure to dividend paying assets, including LGEN, and increase exposure to simple low cost global equity funds / etfs
NoloServileCapis
I've a couple of questions . . .
" . . . whilst the global tech performance is clearly better than LGEN itself I do wonder whether it has the potential to outperform to the extent that LGEN does . . . " - when you refer to LGEN's 'outperformance', what are you comparing it to and over what time period?
" . . . the international index hasn’t one too badly but am glad I didn’t buy more . . . " what were you expecting over a 5 month period? Give it 5 years and then make comparisons!
Good Luck
You can't transfer shares into your wife's isa.
Either you would have to sell them and transfer cash to her, or transfer shares to her for her to carry out a bed & isa transaction.
Either way profit on sale would count towards cgt allowance of person who sold
" . . . Companies (and therefore their shares) have a fundamental value, based on the fact that ultimately they make profits which they pay out to shareholders in the form of dividends . . . "
And thereby lies one of the issues.
Every time a dividend is announced / paid the value of the business is devalued by that amount.
Alternatively if a business produces high returns on capital in cash, has growth opportunities to allow reinvestment of that cash at a similar high rate of return (instead of paying a dividend) and has a sustainable competitive advantage in their market the value of that business will grow.
That's why the value of UK dividend payers is sluggish compared to some of the growing businesses in the USA who pay next to no dividends.
MB007 - I'm with you on this one. I came to the conclusion you're highlighing a number of years ago and have been reducing my exposure to dividend paying assets steadily over time. Currently they represent about 24%, in value, of my portfolio. I intend to reduce this down to around18% during 2024.
The majority of my portfolio is invested in global equity funds. Mainly managed some index trackers.
Why do I continue to hold some dividend payers? Well, I'm not seduced by the dividends received that's for sure! Everything I own is measued on a total return basis.
I'm all for diversification. And that includes how I receive my return ie growth or income or a combination of the two.
I've been hearing for years that the US stock market is overvalued. That the UK is undervalued. That there'll be a switch to value from growth. Maybe.
What I do base my investment strategy on is that, over the long term, I believe the global economy will continue to grow. On that basis I want to own the global economy. The UK is about 4% of it, so to achieve my aim I must invest elsewhere and there are plenty of either well run managed funds or low cost tracker funds that allow me to do that.
Just my view not intended as anything else!
Some really interesting posts of late. Good to hear other peoples perspective on their investment strategy. I'm always (almost) fully invested. I'm heading into 2024 with the following portfolio breakdown -
Large cap global growth -58% (78% managed / 22% tracker funds)
Direct technolgy - 7% ( 2 x funds / 2 direct shares)
Small cap equity - 5%
Global Income - 4%
Dividend payers - 24% (5 x trusts & LGEN which is 23% of my dividend portfolio)
Maybe a few tweaks along the way - more emphasis on trackers - but I can't see me deviating much from the above.
Good luck all and here's to a prosperous 2024!
Finished year with a total return of +10.7%. Best performer L&G Global Tech Fund at +54%. Worst performer HFEL at -13%. All 6 of my dividend paying holdings were a lag on overall performance in that they all came in below the total portfolio finish.
Started the year with dividend paying holdings at around 30% of overall portfolio value. This is now down to 24% due to selling BP and Shell, and reducing holdings in LGEN, HFEL and MRCH. Aim is to further reduce dividend holdings to below 20% of portfolio value.
Whilst I’m reasonably happy with the overall +10.7% total return had I simply consolidated everything into a global equity tracker fund I’d be looking at a return of close to +18.0%.
Plans for next year: (i) further reduce value of dividend paying holdings, (ii) consolidate number of holdings by increasing exposure to simple global tracker fund/etf, (iii) increase exposure to small / medium cap companies on back of likely interest rate reduction
For info current portfolio split is: 45% USA, 28% UK and 27% RoW
Good luck
". . . LGEN dividend just keeps up with inflation, that'll be an 8% real return . . ."
Over the last 10 years the average annualised return from LGEN has been 6.21%
". . . That's better than the long term market average . . ."
Whilst a simple global tracker fund ie Legal & General International Index, has returned an average annualised return over the same 10 year period of 11.78%
" . . . Due to reinvesting my LGEN dividends, this has both reduced my average cost per share but has also increased the yield to 8.25% . . . "
I'm sorry but I don't agree. If you started out with a £10k investment 5 years ago your initial cost per share would have been £2.31 and you would have started with 4,329 shares. A reinvestment of dividends over the last 5 years, on an annual basis, would mean that today you would have 5,534 shares, however, you would have spent a total of £14,432. So, an average cost per share of £2.60