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

TCA

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.

Thanks for correcting my error! Several replies have already pointed out why your thinking is flawed, but to add to what atush said re investment trusts, have a look at The City of London Investment Trust (CTY), which has increased dividends progressively for every one of the last 47 years.

Ryan_Futuristics

masonic wrote: »

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.

Absolutely, there are similar articles on asset allocation (arguing, quite rightly, that the more funds and stocks and asset classes you hold, the more you'll dampen any that outperform and just create an elaborate index tracker) ... And it's true that some of the best investors are Conviction investors - so they'll only hold 6 companies in a portfolio, or only be invested in one region or sector at a time

But, evidently, avoiding risk has a financial value - just like taking out insurance

My perception of risk isn't so much the kind of risk we can look back on over recent periods ... For me it's: who knows what markets will be like in the future? We've never had this period in global finance or politics or demographics before ... So you've got to learn from the past, but don't expect it to repeat ... It wouldn't surprise me if developed markets spent the next 50 years on a downward trend - the UK's been worryingly flat since 1999 (and it's been a downward trend if you consider inflation)

masonic

Ryan_Futuristics wrote: »

Absolutely, there are similar articles on asset allocation (arguing, quite rightly, that the more funds and stocks and asset classes you hold, the more you'll dampen any that outperform and just create an elaborate index tracker) ... And it's true that some of the best investors are Conviction investors - so they'll only hold 6 companies in a portfolio, or only be invested in one region or sector at a time

But, evidently, avoiding risk has a financial value - just like taking out insurance

Well yes, that's Peter Lynch's 'diworsification'. Although it has to be said that high conviction investing only avoids risk if the right calls are made. The argument against going down that road is that often they are not. TBH, I do a bit of both - on the one hand I hold trackers for my US and UK large cap exposure and also several actively managed funds including one with a very concentrated portfolio - the definition of conviction. What I'm not doing at the moment though is tactical asset allocation, which is perhaps something I should consider.

My perception of risk isn't so much the kind of risk we can look back on over recent periods ... For me it's: who knows what markets will be like in the future? We've never had this period in global finance or politics or demographics before ... So you've got to learn from the past, but don't expect it to repeat ... It wouldn't surprise me if developed markets spent the next 50 years on a downward trend - the UK's been worryingly flat since 1999 (and it's been a downward trend if you consider inflation)

In terms of the UK, by the end of 1999 its CAPE was approaching 30, while today it stands at about 12, so it's more than halved during those 15 years. It's funny you should mention the returns since 1999 - a few months ago there was a similar discussion. I worked out that an investor putting a lump sum into the FTSE100 at the end of 1999 would have achieved an annualised return of just 3.2% - not much more than inflation (and today, after the recent correction it is pretty much zero in real terms). Contrast that with annually drip-feeding into the FTSE100, which would have restulted in annualised returns of 6.7% (presumably a touch lower today).

So, I can't help but feel quietly optimistic when I see that investing in a pretty rubbish index, starting at a time at which the market was considerably more expensive than today, it was possible through regular investment to generate halfway respectable returns. We certainly shouldn't forget the caveats of making predictions about the future by looking into the past, but I don't think things are that bad.

Thrugelmir

atush wrote: »

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

That's because they hold income reserves to smooth payouts. Not that the underlying investments have performed well, income wise.

easterbunni

Considering the latest dip, I thought the Halifax Sharedealing page was quite funny...

PenguinJim

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 was pleased to get some BP for 408.7725, but slightly kicking myself for missing BlackRock World Mining Trust in the 340s, as I had them on a vague watch-list but just didn't look at them last week.

I should be holding off and saving my current available cash for future dips, but I'll keep an eye on BRWM this week in case it gets into the 340s again (371 at close Friday). I won't get more "effortless" cash with nothing else to do until January, so I'd like to keep an available cash pot for t' bargains through the next 10 weeks.

Ryan_Futuristics

masonic wrote: »

Well yes, that's Peter Lynch's 'diworsification'. Although it has to be said that high conviction investing only avoids risk if the right calls are made. The argument against going down that road is that often they are not. TBH, I do a bit of both - on the one hand I hold trackers for my US and UK large cap exposure and also several actively managed funds including one with a very concentrated portfolio - the definition of conviction. What I'm not doing at the moment though is tactical asset allocation, which is perhaps something I should consider.


In terms of the UK, by the end of 1999 its CAPE was approaching 30, while today it stands at about 12, so it's more than halved during those 15 years. It's funny you should mention the returns since 1999 - a few months ago there was a similar discussion. I worked out that an investor putting a lump sum into the FTSE100 at the end of 1999 would have achieved an annualised return of just 3.2% - not much more than inflation (and today, after the recent correction it is pretty much zero in real terms). Contrast that with annually drip-feeding into the FTSE100, which would have restulted in annualised returns of 6.7% (presumably a touch lower today).

So, I can't help but feel quietly optimistic when I see that investing in a pretty rubbish index, starting at a time at which the market was considerably more expensive than today, it was possible through regular investment to generate halfway respectable returns. We certainly shouldn't forget the caveats of making predictions about the future by looking into the past, but I don't think things are that bad.

When I've seen investor league tables, Buffett's practically out there on his own as the one conviction investor who beats everyone, then it's all diversified investors filling the big space in the middle (in terms of returns and consistency)

I guess I'm a semi-conviction value investor, as my regional allocation looks nothing like a market weighted index ... e.g. I'm around 10% each in Russia, Brazil and Italy, but only 2-3% US ... I've probably got more in Polish shares than US (with mean reversion and dividends reinvested, the U.S. is only predicted to return 1%/year)

I've got a monthly drip-feed, but what I'm trying to do more is only buy cheap ... So while I want to increase my Asia allocation, I've stopped buying while valuations are average, and instead I'm buying more Eastern Europe

I started CAPE averaging my whole portfolio by region, and one plan is to try and keep the average below 15, and the price/book below 2 ... Or I may compartmentalise 20-30% of my portfolio as a global value pot, and try and grow and rebalance it separately (rotating so as only to hold low CAPE regions, selling as they rise)

But I also have a fair bit in Woodford and Murray International, who've both navigated tough markets well, as a 'quality' allocation


And yeah, and obviously over 20-30 years, even investing in 1999, the compounding effect really kicks in ... But you never really know whether you're in a 1999 today ... So I'm quite positive, but my only worry with the UK is how closely we tend to follow the Dow - whether we'll experience the US's potential problems by osmosis (and whether we should just use US valuation) ... So my 'value' pot (if returns are anything like Meb Faber's modelled) diversify me by more than just region, but sort of by philosophy

TCA

PenguinJim wrote: »

I was pleased to get some BP for 408.7725, but slightly kicking myself for missing BlackRock World Mining Trust in the 340s, as I had them on a vague watch-list but just didn't look at them last week.

I should be holding off and saving my current available cash for future dips, but I'll keep an eye on BRWM this week in case it gets into the 340s again

Although they are maintaining the next dividend, there's still big concerns as to whether they'll be able to continue the income levels after the London Mining debacle.

Ryan_Futuristics

TCA wrote: »

Although they are maintaining the next dividend, there's still big concerns as to whether they'll be able to continue the income levels after the London Mining debacle.

I've been waiting for an opportunity to get rid of my BlackRock mining shares for ages

There are two kinds of cheap - I don't hold great prospects for the sector ... Water might be an interesting thing to be invested in however

ChesterDog

Indeed. Water is the one commodity I hold. As an iShares tracker.