S+S ISA, dividend hunting vs diversification?

lozzy1965

I disagree with most here who say that individual shares are risky, but I agree that your original post sounded like you were a novice!
Some of the examples showing how share prices can fluctuate dramatically miss the point. You are in this for the long term, and even when they fluctuate they are still paying dividends. And with individual shares, you can realise a huge increase as a capital gain whilst switching to a 'cheaper' high divi stock. Ideal world I know, but it can happen I have done it many times over the years.
So my suggestions are: Google "Top Yields" and click on the FTSE100 and 250 links to see potential candidates for high yield shares. DON'T take the results as read though! Go to another site (I use Digital Look) to look for dividend history and predicted future payments.
6 shares is a reasonable starting point if you plan on adding more later and you diversify into different market sectors.

jimjames

lozzy1965 wrote: »

Some of the examples showing how share prices can fluctuate dramatically miss the point. You are in this for the long term, and even when they fluctuate they are still paying dividends.

That might be true for some shares but both RBS and BP suspended dividends so you were hit by a double whammy of plunging share price and no dividends either.

There is no guarantee that dividends will be paid for any share.

bowlhead99

lepidopterist wrote: »

Please be clear: I didn't ask for lectures. I asked for advice.

You did ask for advice, and also for opinions, and "should I diversify more" and the near universal advice you received was that £12k was not enough for a portfolio of individual stocks to be "invested in a relatively low-risk way". As I mentioned, it is a more fun way of doing it but it is not really low risk. It is higher risk which is why it can be fun.

I pointed out that you need to be careful about 'safe looking stocks' because BP as an example of one you had selected had delivered a relatively poor return while at the same time crashing down 30-55% on four separate occasions in the last 14 years.

After all, you had mentioned you were slightly nervous as you had never filled out a £15k S&S ISA with iWeb before, and you wanted opinions.

So, I'm not surprised you received some feedback telling you to carefully consider what you were getting into and the approach, along with people's ideas for other stocks, comments on a specific stock in your portfolio, the concept of using equity income funds or other fund types to achieve diversified growth alongside income, and so on.

This is what a discussion forum is generally going to get you.

I appreciate your concern. It is not necessary.

It is polite to be concerned if someone is perhaps mischaracterising the risks, especially if they admit to being nervous about having not loaded up an ISA with individual stocks before.

If you would prefer just to be told it is a good idea and collect some stock tips for your "chase some risky shorttermist" piece, fine. Feel free to write off all the feedback as a 'lecture' that you don't want.

But if the comments so far are not what you want, then why not engage in debate and discussion to get more feedback and opinion. For example, what do you think will be the dynamics of the energy market in the next 15 years and how has that helped you come to the conclusion that BP from its current share price is better than Royal Dutch Shell or Exxon from their current share prices, or something like BG plc, etc? Why Glaxo instead of AstraZeneca, why Sainsbury ahead of Tesco and so on.

It is difficult to work out how to pitch a response if you're going to just sit back and criticise our approach without saying what it was you would have preferred we did instead.

lozzy1965

jimjames wrote: »

That might be true for some shares but both RBS and BP suspended dividends so you were hit by a double whammy of plunging share price and no dividends either.

There is no guarantee that dividends will be paid for any share.

True, but that's why one diversifies. With 6 shares you would be incredibly unlucky to have owned both these, and they happened at different times anyway. I owned BP, and sat out the disaster. My shares are back above what I paid for them and the dividned continued to be paid for most of the recovery time. That is the kind of 'risk' I am prepared to take, unlikely to lose my money entirely, and likely to recover within a couple of years.
Individual shares are more risky than funds maybe, but by no means "risky" if you stick to the big boys, and I believe the rewards are far greater on average. Of course, my personal opinion and at odds with the many fundies on here.