HYP- High Yield Portfolio

cheerfulcat

thought Stephen Bland advised no more than 15 and is there a certain amount you should invest in each one to begin with?

I don't remember that ( doesn't mean he didn't say it, though! ) - but there are several people on the HYP board who have more than 15. I have a 19-share HYP. There has been some discussion of this along the way. BTW if you sort the board by recs ( like this ) you get to some of the most interesting stuff. Oh and look out for TMFPyad's posts - that's Stephen Bland.

$17mma

cheerfulcat wrote:

I don't remember that ( doesn't mean he didn't say it, though! ) - but there are several people on the HYP board who have more than 15. I have a 19-share HYP. There has been some discussion of this along the way. BTW if you sort the board by recs ( like this ) you get to some of the most interesting stuff. Oh and look out for TMFPyad's posts - that's Stephen Bland.

Thanks agin cheerfulcat I do not find the Fool as user friendly as MSE especially the baoards so also finding it difficult to work my way aroung. Have read so much over the past week just want/need a clear cut guide as to what action should be taken.

EdInvestor

15 shares is the minimum you should have in a full HYP bought at once with a lump sum.This is so it spreads the risk over enough sectors. But there's no reason you can't have more.I have 25 in my HYP.

though I do not see RBS here?

RBS is not an HYP candidate - Lloyds is the standout commercial/High St banking pick because of it's high dividend.

BTW Vodaphone could be added to the list above as it has now changed its dividend policy to high yield, if the HYP is a big one,otherwise I would choose BT. You need to take care with utilities as they are more risky than other companies as the regulators can muck about with their business.Hence only one is recommended on the elec/gas/water side, although they tend to have high yields.

is there a certain amount you should invest in each one to begin with?

If buying an HYP all at once, you should invest the same amount in each share but there's no minimum or maximum.If you have only a small amount to invest you should consider opening an account with Halifax Sharebuilder.

$17mma

Am I right in assuming that when picking value shares that they should ideally be valued lower than their potentil, which wil eventualy rise paying an increased dividend over time?Ensuring the company has no debt or at least net cash to off set it?Also what is meant by 100m cap?

Xbigman

I'm new to share buying but I'll try to answer (and someone will correct me if I'm wrong).

Mcap is market capitalisation. Which is the value of all the shares in the company added up. The actual assetts of the company can be more or less than the value of the shares, but obviously an undervalued (more assets than shares) company is a better bet.

Yes you want to buy shares that are undervalued compared to their potential, but working that out is where the skill and a healthy dose of luck comes in. The fall back position is to invest in solid companies with low debts that make a good profit. Whch is pretty much what HYP investing is all about.
Regards



X

Paul_-C-

Market cap info:
http://en.wikipedia.org/wiki/Market_value

cheerfulcat

$17mma wrote:

Am I right in assuming that when picking value shares that they should ideally be valued lower than their potentil, which wil eventualy rise paying an increased dividend over time?

Hi,

The share price has nothing to do with the dividend, except in calculating the yield. So share price 100 pence, dividend 10 pence = 10% yield. Share price doubles to 200 pence, yield now = 5%. In the HYP it is the yield you are looking for, along with dividend cover of >1.5 ( depends on your appetite for risk, of course - I prefer a cover of >2 but that's hard to find in high yielders ). With value investing yes, you are looking for undervalued shares with an " outer " - things like a company with a lot of land/property that hasn't been valued for 20 years - but beware of value traps. This is all very simplistic as far as explanations go, so I'd suggest some further reading. The Intelligent Investor is a very good place to start.

Ensuring the company has no debt or at least net cash to off set it?Also what is meant by 100m cap?

Yes-ish to the debt question. Some sectors are naturally highly geared. Market cap is as others have explained.

HTH

Cheerfulcat