Rate my SIPP - ITV high conviction

kempiejon

@julicorn
My alternative view is that picking a gloabl index is a form of stock picking. Other assets might mtigate some volitility from being in 100% stocks, my investments are my only income so I prefer to hold a diverse range rather than the gloabl voting of the index. I won't get the best returns but I can make them more predictable. My crystal ball says being 60% USA is currently a bet on a handful of USA stocks. Of course 100% ITV is a bet on just ITV. On the spectrum of risk perhaps as measured  by volatility ITV is higher than say VWRL but your mentioned 60:40 sotcks:bonds safer
I have seen some clear thinking and backtests that show an equal a split of property, stocks and gold is a good enough system, captures most growth with much less volatility. Rebalanced regularly to original weighting harnessing gains from any asset.

I hold a handful of hopeful uncorrelated assts it's everything I own and needs to support me for decades so I try and take care.

Which is a long way from the idea that individual stock picking is not recommended for most people. They could do the research, it's not hard. I find it profitable, interesting and fulfilling. I don't have the best plan in town but it has been honed to my requirements. I think that's better than a global index tracker with all it's foibles. But what do I know?

Juno_Moneta

This is a good debate around global trackers and individual stocks - and exactly what I came here to read, thanks all. 

Qyburn

julicorn said:

As an example:
"Consider the nearly 3,900 actively managed U.S. equity mutual funds and exchange-traded funds tracked by investment researcher Morningstar. In calendar 2024, just 13.2% of these investments beat the S&P 500 SPX. Their average gain was 13.5%, barely half the 25% return of the S&P 500."
Source: https://www.morningstar.com/news/marketwatch/20250118291/most-mutual-funds-dont-beat-the-market-but-whats-the-market-anyway

Surely you should be comparing with a UK S&P tracker fund, since you can't actually invest in the index itself. 

Hoenir

julicorn said:

- The large percentage of US stocks and tech stocks in these trackers simply reflect their current share of the global economy. 

It represents the largest capitalised listed companes adjusted to reflect their share free float. The US economy only represets around 25% of global GDP. 

julicorn

Hoenir said:

julicorn said:

- The large percentage of US stocks and tech stocks in these trackers simply reflect their current share of the global economy. 

It represents the largest capitalised listed companes adjusted to reflect their share free float. The US economy only represets around 25% of global GDP. 

Fair point, I should have said in the top 10,000 or so companies (depending on the index it's tracking). Thanks for pointing that out. 

Shimrod

Juno_Moneta said:

This is a good debate around global trackers and individual stocks - and exactly what I came here to read, thanks all. 

You mentioned the value of dividends in the first post - there are plenty of companies that are paying 6-10% dividends in the FTSE100 (e.g. M&G, L&G, Aviva, Phoenix) and an even bigger pot if you extend that to those paying 5% upwards.

You could still have your high conviction while spreading the risk a little and earning extra on the dividend front.

Still not a portfolio I would be brave enough to have my whole pension in, but we do have an income portfolio made up of individual shares within our ISAs, although that only makes up about 8% of total investments, the rest of which are in funds.

I also have this screenshot as a reminder of what can go wrong (and very quickly) with single company investing.

Juno_Moneta

Hi Shimrod - thanks yes plenty of good dividend payers there. But I don’t feel I understand those businesses, like M&G, as well as I do ITV, yet anyway. 

Your ‘could drop 99%’ warning is often repeated with single stock investments. 

Yea there have been some spectacular failures in recent times. 

However it has also been mentioned on this thread I think that investors are often scared away by this kind of talk. 

Honestly I don’t think this stock has that future. It has low debt, good income and a highly prized (and undervalued) asset (ITV Studios) that a number of third parties would like to own. 

So I am staking these funds on ITV not going bust - but thanks for the clear warning!

cfw1994

Juno_Moneta said:

So I am staking these funds on ITV not going bust - but thanks for the clear warning!

But you mentioned being prepared to take some profits earlier: how about the question I asked you earlier:

Take profits off….& do what?
A pension is a tax shelter.
What you are doing is taking a punt on one company.
That is fine for “play money” (IMHO🤷‍♂️) - imagine sticking a couple of grand on Tesla/Apple/Amazon at the right time - but plain daft for a long term sustainable pension provision.  & why ITV? I can’t see them being the next Apple 👀

Again, IMHO - no offence intended….

Juno_Moneta

Hi cfw - I don’t think I’ve said my intention is to hold this position for the rest of my life! 

Obviously at some point I will reduce or even close my whole ITV position. 

I have some targets in mind, eg I think this position can get my SIPP value to a sufficient level to enable the maximum drawdown available (LSA £268,275). 

There are other things I will eventually invest in of course. 

Perhaps people have got the impression I will only ever invest in ITV! I don’t think I said that so perhaps that assumption has crept in - happy to clarify. 

FIREDreamer

Juno_Moneta said:

This is a good debate around global trackers and individual stocks - and exactly what I came here to read, thanks all. 

If you want individual stocks, split your £800k into 20 shares of £40k, maybe build a high yield portfolio if you want dividends. Loads of UK companies paying 5% or much more if it floats your boat. Same dividends, more regular, less risk to your retirement pot.

I am sure nobody wants to come back here in a few months to say we told you so.

Please consider what you are doing.

If you are a multi millionaire then that risk might be acceptable. Otherwise, a big no from me. 😃