Monthly income

A_Flock_Of_Sheep

What are people's thoughts on SOI and JEMI at the moment?

grey_gym_sock

A_Flock_Of_Sheep wrote: »

What are people's thoughts on SOI and JEMI at the moment?

i dunno, but wouldn't tim say that all you need is a few cheap trackers?

A_Flock_Of_Sheep

grey_gym_sock wrote: »

i dunno, but wouldn't tim say that all you need is a few cheap trackers?

I expect so! But I have some of those. I don't like to eat bread all the time ya know!

My vanguard side of the portfolio generates very little "income". So I am looking for income generators at the moment.

Clearly when the price falls the yield increases so at the moment SOI and JEMI look like potential purchases but I am still wobbly in my tumbly about Emerging Markets and Asia with QE tapering.

JohnRo

2014 HNY

These are the preliminary and quite significant changes I'm planning to make. I'll be the first to admit there is an element of trial and error in all this but I like to kid myself there's also a little method somewhere in the madness. From the outset I knew this would be a evolving process.

EDIN looks like it'll do the same job - more or less - as the other UK centric trusts, so don't see any real advantage keeping hold of them other than to provide a contrast but their performance over the last few months makes the elimination process easier.

I want to keep LWI and MRC since they were included as a lower yielding growth play and have so far delivered just that unlike one or two others intended to do the same (BNKR & FGT) despite their volatility (which doesn't concern me in a hold forever income portfolio)

I've included a planned stake in Aberdeen Smaller Companies as a stronger growth play but Aberforth geared income looks very tempting too as an alternative and perhaps better suited to an income portfolio. My theory is that any sustained recovery should be felt most acutely by smaller companies.

Property allocation is a bit random, truth is there I can't decide what to do for the best. It may be better to neglect that sector for now as I'm comfortable with equities as income generators long term and their potential for growth.

..anyway here's the planned changes for better or worse, thinking of doing this in January before the April top up and then perhaps doing further trimming or additions in the new tax year.



all comments welcome.

Linton

JohnRo wrote: »

2014 HNY

These are the preliminary and quite significant changes I'm planning to make. I'll be the first to admit there is an element of trial and error in all this but I like to kid myself there's also a little method somewhere in the madness. From the outset I knew this would be a evolving process.

.......
all comments welcome.

Have you developed this portfolio on a top down sector basis or just chosen the funds you like? If the latter you may find it of interest to set up a trustnet portfolio which provides a very useful asset allocation analysis tool showing in which countries and which industrial sectors you are ultimately investing. This should give you some ideas as to whether you are missing out on anything or have a too high allocation anywhere.

JohnRo

I have this all input on trustnet so I can and will take a look at that for sure.

I never set out with or intended a rigid sector/region allocation model or plan for this thing so admit that hasn't been a focus. The purpose initially was to provide a sustainable income and find predominantly UK centric income vehicles that would, based on a good track record, provide a reasonable likelihood of good and growing income alongside capital growth potential in the future.

just chosen the funds you like?

There is an element of that based on numbers, though I have no more like for any particular fund or trust than any other beyond the numbers. As stated I do have a generic affinity towards smaller companies and don't fear the volatility and potential downside.

I'm just aiming to be a bit more flexible in this portfolio than I am in my tracker portfolio for which I've mostly chosen index funds using the methods you describe.

I'm wanting to move this longer term towards trusts and shares for platform fee and cost reasons but also to allow a bit more flexibility along the way where discounts and premiums allow.

Jegersmart

JohnRO

I hope all is well and am impressed to see much work going into this.

My observation would be that this seems to be the actions of a man who is bored. What I mean by that is that I am not sure why one would bother setting up an investment strategy that provides one with an income one doesn't need? (If you do need £140 per month then I would probably just keep an extra buffer in cash/near cash in case I need it).

I may have misunderstood something, but have you asked yourself why you are doing this? If it is an experiment or project to learn then fine - but I just don't see the point.

No offence intended, just an honest question!

J

Jegersmart

JohnRo

HNY by the way.

In addition to my question above, and bearing in mind this is an income portfolio - it may be beneficial to bear in mind that smaller companies may not be able to provide/maintain/increase dividends just because they may benefit more from a "sustained recovery" (even if that is the case) than larger companies.

I also note that you have included some "lower yielding growth funds" in there, which would go against the grain of an income portfolio in most instances. I would be (and do) screen for best current yield (take a look at the underlying assets and/or gearing) and weight it by average yield over 3/5 year period and rebalance accordingly. I never put a growth play in an income portfolio - to me that would mean it is no longer an income portfolio - more like an attempt at a "conservative lower volatility" portfolio.

It is always tempting to hedge your bets when investing, as you have already seen on here where almost everyone wants to be hugely diversified - or follow the advice of the masses in terms of % weighting against whatever index or allocation they read about in the Times.

Personally, I do not want to be diversified most of the time because I do not want to guarantee an average return however in an income only portfolio this is not very relevant.

Good luck!

J

JohnRo

Without getting into personal circumstances I'm in a strange situation, income poor but with reasonable levels of capital.

I live quite a frugal existence through necessity and a stubborn refusal to squander what capital I have with a hope and intent that it will allow me to "escape" the income straight jacket at some point. It's all heading slowly in the right direction so it's not boredom driving this but necessity and a desire perhaps even urgency to achieve a level of financial independence that allows me an affordable lifestyle (I think) I want, by making the best I can of what capital I have available. At least in the medium term.

I can't afford to be totally reckless but I can and am prepared to take risks that might achieve what I think I'm aiming for sooner in the full knowledge it might also push them back.

JohnRo

http://www.theaic.co.uk/companydata/C103X

JPI seems more in tune with what I'm trying to achieve than many I hold in this portfolio currently, it's just the constant dilemma of balancing diversification, risk and potential return while trying to check and stop myself being reckless.

90% gearing and a strong (quoted) income yield seems to align with my attitude and much of what I'm aiming for, 50% plus drop in value during the 2008 financial crisis is something I'm prepared to accept in future given the income stream will not be adversely affected to anything like that extent. Currently on a decent discount which is affecting it's league position but the NAV seems to be in line with the growth and income benchmark, scheduled to be wound up early 2018.

Seems to hold many of the usual suspects when it comes to constituent parts so nothing to panic about should the UK equity market turn sour.

decisions, decisions...