I'm timing the market - who's in?

coastline

coastline said:

coastline said:

coastline said:

coastline said:

coastline said:

Sold ISF.L at 765.40p today .Units sold 13,065 . Notional 100K is now £99,987.05p with the £12.95 fee.

 DATE    BUY/SELL   ISF.L    UNITS       VALUE           
18 JAN       SELL      765.40  13065     £99,987.05

BUY ISF.L  at 744.30

 DATE    BUY/SELL   ISF.L    UNITS       VALUE           
18 JAN       SELL      765.40  13065     £99,987.05
14 MAR      BUY       744.30  13432     £99,974.10

SELL ISF.L at 749.22

 DATE    BUY/SELL   ISF.L    UNITS       VALUE           
18 JAN       SELL      765.40  13065     £99,987.05
14 MAR      BUY       744.30  13432     £99,974.10
29 MAR      DIV            4.28   13432    £100,549
31 MAR      SELL      749.22  13432    £101,197.17

BUY ISF.L at 756.30

 DATE    BUY/SELL   ISF.L    UNITS       VALUE           
18 JAN       SELL      765.40  13065     £99,987.05
14 MAR      BUY       744.30  13432     £99,974.10
29 MAR      DIV            4.28   13432    £100,549
31 MAR      SELL      749.22  13432    £101,197.17
10 MAY       BUY       756.30  13379    £101,184.22 
15 JUNE     DIV           10.40  13379   £102,575.63 

SELL ISF.L at 747.86   

  DATE    BUY/SELL   ISF.L    UNITS       VALUE           
18 JAN       SELL      765.40  13065     £99,987.05
14 MAR      BUY       744.30  13432     £99,974.10
29 MAR      DIV            4.28   13432    £100,549
31 MAR      SELL      749.22  13432    £101,197.17
10 MAY       BUY       756.30  13379    £101,184.22 
16 JUNE     SELL      747.86  13379    £100,043.23
16 JUNE     DIV           10.40  13379    £101,434.65 

BUY ISF.L AT 725.80

  DATE    BUY/SELL   ISF.L    UNITS       VALUE           
18 JAN       SELL      765.40  13065     £99,987.05
14 MAR      BUY       744.30  13432     £99,974.10
29 MAR      DIV            4.28   13432    £100,549
31 MAR      SELL      749.22  13432    £101,197.17
10 MAY       BUY       756.30  13379    £101,184.22 
16 JUNE     SELL      747.86  13379    £100,043.23
16 JUNE     DIV           10.40  13379    £101,434.65 
23 JUNE     BUY        725.80  13973    £101,421.70

MarcoM

city of london it has dropped greatly over the past four months, I am thinking if I should buy more now or will it drop further...

NedS

Sorry I've been away since beginning of the month so no comment or moves from me.

MarcoM said:

city of london it has dropped greatly over the past four months, I am thinking if I should buy more now or will it drop further...

Good question. Referring back to my notes, I see I have "Trading window of 400-440p. Anything significantly below 400p (e.g 375-380p) is a buying opportunity. Above 440p is a sell, although has traded sideways for 8 years, valuations are cheap so there is potentially more room to the upside"

So I'm now watching closely, and if the price drops further, I may add more to my holding. SP closed at 394p today, a further 3.5 to 5% drop would put it right in my buy zone to add more. As @coastline says above, if US markets move south, they will almost certainly drag UK markets down further creating buying opportunities.

That said, CTY is only on a 5.13% yield at 394p which is exactly the same yield as an 18 month government gilt (TN25), so why take the risk? The answer to that is that CTY has a progressive dividend that will increase each year (whereas the return of a gilt is fixed at purchase), and CTY has the scope for capital gain, especially when purchased at distressed levels, so entry points are key to determining long term success. Maybe the SP needs to fall significantly further to make the yield more attractive given the subdued growth prospects? Looking at historical SPs over the last 10 years in a zero rate environment may not provide a realistic view in the current rate environment?

I'm watching for now. There were things that looked cheap last week that now look a lot cheaper this week. I think another 5% drop for CTY is not out of the question in the next month or so.

Prism

NedS said:

That said, CTY is only on a 5.13% yield at 394p which is exactly the same yield as an 18 month government gilt (TN25), so why take the risk? The answer to that is that CTY has a progressive dividend that will increase each year (whereas the return of a gilt is fixed at purchase), 

I have never been convinced by the progressive dividend policy and the dividend hero status. Not sure why all of the fuss about a dividend that does increase by only by a tiny amount, right when inflation is high. I wouldn't be expecting a 10% increase but a 1% increase that it seems to be offering is hardly worth it, except to maintain the status.

Small dividend reserves and heavy exposure to financials and cyclicals when we might be entering a recession - not for me.

adindas

Prism said:

NedS said:

That said, CTY is only on a 5.13% yield at 394p which is exactly the same yield as an 18 month government gilt (TN25), so why take the risk? The answer to that is that CTY has a progressive dividend that will increase each year (whereas the return of a gilt is fixed at purchase), 

I have never been convinced by the progressive dividend policy and the dividend hero status. Not sure why all of the fuss about a dividend that does increase by only by a tiny amount, right when inflation is high. I wouldn't be expecting a 10% increase but a 1% increase that it seems to be offering is hardly worth it, except to maintain the status.

Small dividend reserves and heavy exposure to financials and cyclicals when we might be entering a recession - not for me.

From reading this MSE regularly, I have seen there are some people here  are considering the dividend yields as one of the most important factors when making an investment decision.

Each to their own, but to me it is a false economy. Apart from what have been said above, it is not uncommon the top rank management, will distribute dividend while the company are making a loss to maximise their short term performance aiming for bonus. What actually happen here is that the top management is just returning your own money while the top management taking their cut from bonuses. When the stock price suffer in the future, the price fall significantly they might have moved to another company. The shareholder get dividend of 4% (say) but it is not uncommon the stock price might fall double of that figure for unprofitable companies.

For that reason I personally see dividend as good to have as a bonus but will never consider it as as a main factor when making an investment decision.

NedS

adindas said:

For that reason I personally see dividend as good to have as a bonus but will never consider it as as a main factor when making an investment decision.

That's presumably because you are still in the accumulation phase. Once you are 70, retired and need regular reliable income to pay your bills, you may have a different view. Or you may be happy to just go with a SWR strategy, or purchase an annuity or a combination of any number of strategies.

There is no single right or wrong approach. If your investment strategy is meeting your investment goals, then it is doing it's job. I saw positive returns of 6.8% in 2022 in my income portfolio, whilst the MSCI world index saw a loss of 17.7%

Prism

NedS said:

adindas said:

For that reason I personally see dividend as good to have as a bonus but will never consider it as as a main factor when making an investment decision.

That's presumably because you are still in the accumulation phase. Once you are 70, retired and need regular reliable income to pay your bills, you may have a different view. Or you may be happy to just go with a SWR strategy, or purchase an annuity or a combination of any number of strategies.

There is no single right or wrong approach. If your investment strategy is meeting your investment goals, then it is doing it's job. I saw positive returns of 6.8% in 2022 in my income portfolio, whilst the MSCI world index saw a loss of 17.7%

I am fine with dividends but I feel that CTY overreaches a bit to get the level that looks good on a fact sheet, but means that the fund is heavy on cyclicals which are just prone to cut those dividends or not increase them by much during a recession or period of high inflation. I assume that most retirees would like to preserve their income by increasing it roughly in line with inflation, which dividends cannot achieve alone. 

Overall I look at CTY in comparison to the FTSE 100 and might prefer it over a tracker - then again, why invest much in the FTSE 100 companies at all?. I think there are much better trusts out there, many of which are currently on a discount, for a general overall better performance.

coastline

To answer MarcoM nobody knows where it's going next but at least you're buying 10% below pre-covid levels. We all have the view that we'll get to new highs one day. You can always split your pot into say 3 and drip feed ? Just a thought.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

Now for the tea leaves . As I posted recently a poor call end of March with the banking crisis hit my returns . I knew April was a good month ( more tea leaves ) and so it was.

$SPX.PNG (683×496) (equityclock.com)

Is it a summer lull ?

^FTAS.PNG (911×623) (equityclock.com)

Scores on the doors . The original 13065 units x 725.8p = £94,825 + dividend £1960 = £96,785. At yesterdays close I've got 13973 units and £101,421. Around 5% up on buy and hold.
My indicators are on buy so I did just that at least I gained a fair amount of new units. Main concern is the US and UK are "out of sync" regarding the mechanical system . FTSE in buying territory and US still around the half way mark. 

16th June when I sold on my US market doubts it's way overbought.

FyxVdwxX0AMGdj- (900×900) (twimg.com)

Yesterday still high but falling nowhere near the lower range. So there could be fireworks ? News developments for the Ukraine ? Who knows ?

$SPX | SharpCharts | StockCharts.com

FTSE "out of sync" nearly oversold...

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com) 

6 months to go but I'm not setting any targets just riding the waves. Good luck.

NedS

NedS said:

NedS said:

No updates from me.

My position:

Shares: 18,000 shares at 422p = £75960

Cash: £16.09

Latest hypothetical drip feeding purchase on last day of month (30/4/2023):

1270 shares at 422p (last closing price) including 0.5% stamp duty and £11.95 trading fee (no £1 levy as less than £10k)

Price = £5398.15

CTY shares bought: 1270

CTY Share Total: 6400

Cash position: £48,216.30 - £ 5,398.15 = £42,818.15

Total Value: (6400 x 422p) + £42,818.15 cash = £69826.15

No updates from me.

My position:

Shares: 18,000 shares at 400p = £72,000

Cash: £16.09

Latest hypothetical drip feeding purchase on last day of month (31/5/2023):

1350 shares at 400p (last closing price) including 0.5% stamp duty and £11.95 trading fee (no £1 levy as less than £10k)

Price = £5,438.95

CTY shares bought: 1350

CTY Share Total: 7750

Cash position: £42,818.15 - £5,438.95 = £37,379.20

Total Value: (7750 x 400p) + £37,379.20 cash = £68379.20

The drip feeding strategy has closed the gap somewhat after my failure to sell at 430p (guilty of waiting for the dividend). An opportunity lost, but I did receive a healthy £909 dividend today.

Updating for end of month. No changes in my position:

My position:

Shares: 18,000 shares at 397.5p = £71,550

Cash: £16.09

Latest hypothetical drip feeding purchase on last day of month (30/6/2023):

1335 shares at 397.5p (last closing price) including 0.5% stamp duty and £11.95 trading fee (no £1 levy as less than £10k)

Price = £5,345.11

CTY shares bought: 1335

CTY Share Total: 9085

Cash position: £37,379.20 - £5,345.11 = £32,034.09

Total Value: (9085 x 397.5p) + £32,034.09 cash = £68,146.97

NedS

Today's drops, particularly in the UK markets, have got my interest.

Back at the start of this thread, the goal was to get to a holding of 20,000 CTY shares by the end of the year. We started the year on 17,000 and added 1,000 at no cost in the first quarter of the year through good execution of our plan. Since then, execution has been poor and we failed to exit the market in April, instead hanging on for the dividend (in hindsight a mistake).

So here we are now. Previously I noted anything significantly below 400p looks like a buying opportunity, and today's closing price of 386p is just that. Except I think we may have significantly further to fall.

Perhaps @coastline has some expert chart analysis that can offer some insight. Looking back at year lows, I see 366.5p (HL), and obvious support at ~370p so we could reasonably have another 5% to fall. That does not seem unreasonable to me, given the predicted increases in bank rates both here and in the US, and US markets are currently at 1 year highs and would need an 18% fall to take them back to their previous yearly lows - they could easily retrace 5-10% and bring UK markets down with them.

So my PostIt note now says CTY: 370p target, looking to add 2,000 shares to take me to my 20,000 share target (albeit with new capital that I would then seek to recover through future trading rather than increasing my holding further, so this is kind of a leverage trade).