Member Info for zac0_4

Patience! I think you've got to give it at least another 12 months. Stop looking at the share price on a daily basis.

Hi Both - Adv11 - who knows with Merchants Trust, or any share for that matter! I tend to have a buy and hold strategy so that's what I'll be doing with that one and only time will tell.

snudge1234 - I would strongly recommend diversification, but not necessarily in the way you might think. You say most of your holdings are in stocks 'bruised by Covid' (I like that!). You might want to add some dividend paying trusts to those. In addition I would also suggest you look at investing monthly into an equity investment fund. You could go with a tracker fund (L&G International Index / Vanguard Global All Cap Index) or a managed fund (Fundsmith / LF Blue Whale / Rathbone Global Opportunities). Go with the accumulation version , not the income version. Invest every month without fail, month in month out, year in year out and over the long term you'll do very well. Also, be careful what advice you take from unknow people on bulletin boards!!!!

Good talking to you both and good luck with your investments.

Nick Dog- if you google 'why do investment trusts issue new shares' one of the search results is an article from Master Investor. This goes some way to explaining the reasons. I must admit I don't fully understand it! I don't think it's seen as dilution as you would assume because the revenue is often used to buy more assets. So in theory more shares but higher asset value so same share price.

snudge1234 - The current annual yield, given today's buy price, of the 3 dividend paying trusts I hold is as follows: Merchants Trust 5.25% (7.15%), Henderson High Income 5.85% (5.64%) & Henderson Far East Income 7.0% (6.71%). All pay quarterly. My yield is in brackets.

So, no, nowhere near what NRR would yield if it got back to 5p per quarter payment given the current share price. However, I think you're many years away from 4 quarterly payments of 5p each. But that's only my opinion.

adv11 - interesting. I'm going the other way in that I'm consolidating. I currently hold 7 dividend paying shares / investment trusts. I hope to have this down to 4 by the year end.

Similarly, I hold 15 investment funds, not paying dividends, where I'm invested for capital growth. Again, I can only see this reducing over time. This element of my portfolio has far outperformed my dividend paying holdings for a number of years now. Good Luck.

As I've said my strategy with dividend paying holdings is to move away from individual shares into dividend paying trusts. For the reasons stated below. So, for me, reinvesting here is a no. I'm down to my last 4 individual dividend paying shares and by the end of this year I expect to have got this down to 1 (L&G).

As this stock is still in its recovery phase there's probably some capital growth still to be had.

But to reinforce my very initial post that this was a poor performing stock prior to Covid. Look at the numbers. If you'd have invested here at the start of January 2017 by December 2019 you'd have received dividends to the value of 19% of your initial investment. However, that 19% would have cost you 40% of your capital. So a total loss of 21%. I don't consider this to be a quality stock based on historical data but others may differ in their views and I respect that. Good Luck in your investments.

In addition to my holding in MRCH I also have positions in 2 other dividend paying investment trusts - Henderson High Income and Henderson Far East Income.

snudge1234 - my portfolio is split into 2 distinct categories (i) investment funds for capital growth, and (ii) individual dividend paying shares for income

My investment funds (global equity) have performed very well during this period. As for my dividend paying holdings well that's a different story!

Throughout 2019 I was moving away from dividend paying individual shares into dividend paying investment trusts. The covid situation has forced me to accelerate that process. Hence my sale of NRR.

So, in answer to your question, I sold here and used the proceeds to buy Merchants Trust (MRCH). I have an average buy price of £3.80. Today it is £5.19. My buy price delivers a dividend yield of 7.15%. It's paid quarterly. It's increased its dividend every year for the last 38 years. Whether that remains this year we'll have to wait and see. Using an investment trust means that I'm not exposed to one company as it invests in a wide range of businesses, and they keep back profits each year to support dividend payments in poor years. I'm waiting to see if that works this year.

No, Mike. No intention to re-enter here. I wasn't aware that I was 'moaning'. I was simply pointing out that this share had been in a 2 year decline prior to covid, so not all good news here leading up to the pandemic.

I sold out at around 80p on the way down. I held here primarily for the dividend. I've re-invested the proceeds in a share which I consider to be a more reliable dividend payer. So, far I haven't been disappointed.

Yes, £20k+ investment at £4.45 per share. As a long-term investor I have a breakeven price of £3.49 taking dividends received to date into account. The power of dividends until they're cut by 50%!

In answer to your question my investment here is the same as anyone else's, except those who've used a loan to purchase shares. Irrespective of what happens it's my money I'm losing or adding to. I'm not having to service a debt monthly. Yes, debt is cheap but, I fear, inflation is on the horizon along with higher interest rates. I sit at a loss currently and if I sell then fine. If I sell at a loss using someone else's money I owe them the difference. So, investing with your own money is totally different to investing with someone else's ie the banks!!

nightyard - this now sits at £3.00 (ish). It's gained 50% from it's low in October. I fear people are in for a shock if they expect a similar 50% growth from here any time soon. Each to their own but taking loans out to invest in BP at £3.00 is simply madness! But that's only my opinion and, as I said, each to their own.

Wales12345 - totally agree. Global equity index or well managed fund. Invest every month, without fail. Month in month out. Year in year out. Don't panic. Never sell. Don't look at it very often. Dead boring but make a shed load of money over a 20 year period!

Then you should know the dangers for the inexperienced. And looking at some of the posts on this board there are plenty of inexperienced investors here. And that's not intended as a criticism.

If you're comfortable with your position then fine. All as I'm saying is that you are making it sound like a good strategy. It isn't for most people.

SmithyS2019 - it might not be an issue to you, but if debt is being used to buy shares then it is an issue. Period. You borrow money to buy shares at £3.00. Your investment declines by 37%. And you don't think that's an issue. What about the panic the more inexperienced (and experienced) investors will suffer? Panic causes irrational decisions to be made making, in some cases, a bad situation worse. Using debt for the average investor is simply wrong!

srevebt - and how would they haved coped when it fell to £1.90?

They simply buy them on the open market then cancel them. The theory being that the market value of the company remains the same but with less shares in circulation the share price rises accordingly.

I'm not a big fan as theory is very rarely what happens in practice!

I wasn't aware I needed to justify myself before I could post here!

I held a large position here for many years so have a view on how this share has performed over the longterm. A balanced view is required from time to time!

No i didn't see it coming. If I had I'd have sold my holding here a lot earlier than I did!

Hargreaves Lansdown for me. Great website and quick with dividend distribution.

Because there's still too much uncertainty around future earnings.