What's happened to my portfolio in the last 2 weeks?!

Ryan_Futuristics

doe808 wrote: »

What did everyone do at the end of the week then? Added some more BP. and BKG for the long term, myself.

I'm still holding out for a 30-40% dip as a real buying opportunity - but I have increased my allocations to emerging markets, Italy and Eastern Europe (which are looking post-2009-crash cheap)

Mistermeaner

Going to buy my equities back once they finish crashing.

Fyi markets will rally slightly before crashing even further.

January will be the time to buy

Trust me im lucky

Ryan_Futuristics

beancurd wrote: »

Gotcha, I agree.

But no one should confuse the return of the average investor with the average of the market. Pure passive investing chases the latter not the former. RF's context came across as the former to me, but if it was a criticism of vanguard using dalbar too strongly justify passive investing, he has a point.

Absolutely

I don't necessarily disagree with their conclusions, but they are trying to sell a certain investment vehicle, and I think the way they present certain information (especially with this use of 'average') doesn't always tell the whole story

By using 'average', lump-sum investing looks better than drip-feeding (Vanguard research) ... But by using 'average' (over time) they also artificially smooth out the risk factor of lump-sum investing, giving it all the advantages of drip-feeding but with slightly better compound interest ... And then people tout this new research, without understanding it fully, like it's science overthrowing Christian doctrine

masonic

Ryan_Futuristics wrote: »

By using 'average', lump-sum investing looks better than drip-feeding (Vanguard research) ... But by using 'average' (over time) they also artificially smooth out the risk factor of lump-sum investing, giving it all the advantages of drip-feeding but with slightly better compound interest ... And then people tout this new research, without understanding it fully, like it's science overthrowing Christian doctrine

It's not just Vanguard who has looked at this (for example). It's easy to lose sight of the fact that drip feeding is a form of insurance against volatility and will, on average , come at a price because more often than not, the market will rise in the short term. However, it won't always do so and the consequences of that might go beyond suffering a capital loss in the short term: The Vanguard research does briefly mention "emotional considerations", but you only need to look around at some of the panic a minor 10% correction caused to see how important that can be.

A_Flock_Of_Sheep

TCA wrote: »

Not necessarily. Many investors create revenue streams from high yield or income portfolios, with no intention of ever selling.

You mean by using the Dividend from the shares. That payout that companies pay share holders but are not obliged to do so and can reduce or cut at any time.

I sincerely hope BP will pay a Dividend for ever at a guaranteed rate.

Last time I checked Tesco were paying a dividend of over 8%. An income investors dream there. We should all jump on it.

masonic

A_Flock_Of_Sheep wrote: »

You mean by using the Dividend from the shares. That payout that companies pay share holders but are not obliged to do so and can reduce or cut at any time.

I sincerely hope BP will pay a Dividend for ever at a guaranteed rate.

That's why you buy a portfolio of them, or invest in high yield funds. It does require saving some of the income during the good times to supplement the returns when yields fall, but it's possible to smooth out returns and get a fairly steady income by doing those things.

Linton

A_Flock_Of_Sheep wrote: »

You mean by using the Dividend from the shares. That payout that companies pay share holders but are not obliged to do so and can reduce or cut at any time.

I sincerely hope BP will pay a Dividend for ever at a guaranteed rate.

Last time I checked Tesco were paying a dividend of over 8%. An income investors dream there. We should all jump on it.

Most dividend paying companies keep on paying a broadly increasing amount year after year. But each year a few stop. So to get a steady income from dividends you need to hold a fair number of them, a number sometimes quoted is 15+. When choosing your dividend payers you should check their basic finances. One key figure is the Dividend Cover - the ratio of profit after tax per share to dividend per share. If its less than 1 the company is paying more in dividends than gaining in profits which clearly isnt sustainable. People may look for Dividend Cover > 1.5.

So yes, if you have more than say £30K to invest (£2K per share) and want income a portfolio of high dividend payers is worth considering. It would be sensible if you also look for international income, the Far East is pretty good as apparently Chinese investors like dividends.

A dividend portfolio needs some maintenance to replace those companies who decrease or stop their dividend and to rebalance those that achieve an unusually good capital increase as well as paying the dividend. Once or twice a year is sufficient.

Rob_192

A_Flock_Of_Sheep wrote: »

You mean by using the Dividend from the shares. That payout that companies pay share holders but are not obliged to do so and can reduce or cut at any time.

I sincerely hope BP will pay a Dividend for ever at a guaranteed rate.

Last time I checked Tesco were paying a dividend of over 8%. An income investors dream there. We should all jump on it.

FOS

I'm not sure if you are being flippant or just that you genuinely don't understand things. A bit of both I suspect.

I'm not sure if you read my post at the bottom of page 8, but in it I explained how you can very successfully buy an income stream from shares and never have to worry about capital fluctuations.

Many companies have an astonishingly good record at maintaining their dividend and such companies have a policy which aims to maintain or increase their dividend year on year. RDSB for instance has apparently done this since the end of the 2nd world war. It is not difficult with a bit of research to establish suitable companies (and I'm only talking about basic research such as Digital Look filters or similar, nothing specialised) and if you diversify sufficiently you will be pretty safe.

As to your comments about BP and TSCO, well, I have held BP for a few years and even with the Deepwater blip, they have paid me dividends amounting to over half the value of what I paid and I am still 10% up on capital overall. A great company for dividend income.

Regards TSCO, you are presumably joking? Whilst you may find their yield being quoted at 8%, you do presumably understand that yield is an expression of the historic dividend payment divided by the current share price. TSCO have announced suspension of the interim dividend and few expect them to maintain the final. Therefore, only an idiot would expect to buy TSCO and see a yield of that order, possibly somebody who did no research and just looked up the yield on a website?. That having been said they have been paying a hansome dividend for a number of years and whilst I would fully accept they are one of a handful of shares that have failed me this year (hence the need to diversify), I will not be selling them and will await the recovery (remember I said don't intend ever selling my shares)

R

racing_blue

doe808 wrote: »

What did everyone do at the end of the week then? Added some more BP. and BKG for the long term, myself.

My "buy" finger has had little exercise since the start of the year & has been twitching these last few weeks. I used it to buy VUKE on Thursday.

If the index is with 10% of an all time high, I probably won't buy. That means 6255 for the FTSE 100 by the way, so Thursday was my first buying opportunity since a choppy few weeks in June 2013.

The hard part in this is seeing the market race away, and having the discipline to sit on boring cash. So I tell myself, boring is good. With money, boring is good. How many poor accountants do you know? Do adrenaline sport for kicks and keep the money side boring.

atush

A_Flock_Of_Sheep wrote: »

You mean by using the Dividend from the shares. That payout that companies pay share holders but are not obliged to do so and can reduce or cut at any time.

I sincerely hope BP will pay a Dividend for ever at a guaranteed rate.

Last time I checked Tesco were paying a dividend of over 8%. An income investors dream there. We should all jump on it.

Investment trusts are shares. And some have raised dividends every single year for decades.