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  • FIRST POST
    • Damper132
    • By Damper132 16th May 19, 2:05 PM
    • 24Posts
    • 31Thanks
    Damper132
    HL - Share Purchases S&S ISA
    • #1
    • 16th May 19, 2:05 PM
    HL - Share Purchases S&S ISA 16th May 19 at 2:05 PM
    HI all,

    im just looking for a little advise, im looking to purchase a dividend paying share maybe in Royal Dutch to just sit and leave there. The only think im struggling to find any info on when the dividend is paid is there an option to automatically reinvest these into more shares to take advantage of the compounding effect i just cant seem to see if this is a possibility?
Page 1
    • Seabee42
    • By Seabee42 16th May 19, 2:18 PM
    • 386 Posts
    • 227 Thanks
    Seabee42
    • #2
    • 16th May 19, 2:18 PM
    • #2
    • 16th May 19, 2:18 PM
    You can select this option when you purchase the shares. Note though if the dividend is less than the share price it wont work.
    • Damper132
    • By Damper132 16th May 19, 2:24 PM
    • 24 Posts
    • 31 Thanks
    Damper132
    • #3
    • 16th May 19, 2:24 PM
    • #3
    • 16th May 19, 2:24 PM
    thanks so basically i would have to purchase a good few shares to make sure the amount i would receive in dividends would be at least equal to the value of one share, and the balance would just sit in my account?
    • ColdIron
    • By ColdIron 16th May 19, 2:40 PM
    • 5,213 Posts
    • 7,088 Thanks
    ColdIron
    • #4
    • 16th May 19, 2:40 PM
    • #4
    • 16th May 19, 2:40 PM
    You can specify that dividends are Automatically Reinvested in your Income Instructions per account under Account Settings. It's account wide so you cant reinvest some and not others. If you have set Automatic Reinvestment the dividends are held in your Income Account until a set day of the month, if there is not enough to cover the cost of a share your dividends are transferred to your Capital Account. There is a cost for this of 1% (1 min, 10 max) but it's better than the usual 11.95 dealing fee
    • Damper132
    • By Damper132 16th May 19, 2:51 PM
    • 24 Posts
    • 31 Thanks
    Damper132
    • #5
    • 16th May 19, 2:51 PM
    • #5
    • 16th May 19, 2:51 PM
    brilliant thanks, i guess the 1 fee is set at 10 automatic reinvestment makes it quite expensive as its effectively a 10% charge would it be better to set the reinvesment limit higher to reduce the impact of the charge?
    • ColdIron
    • By ColdIron 16th May 19, 3:22 PM
    • 5,213 Posts
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    ColdIron
    • #6
    • 16th May 19, 3:22 PM
    • #6
    • 16th May 19, 3:22 PM
    Yes, but then again no. Income reinvestment on small amounts of shares is 10% but it's still only a quid. The problem you will have is that I don't think the dividends accumulate in your Income Account until it hits the limit. While I wouldn't stake my first-born on it my recollection is that: I used to have some British American Tobacco shares whose price was, say, 30. The interim dividend was about 25 and as this wasn't enough to cover a single share it was moved into my capital account where it stayed. The final dividend was about 50 which was enough to buy a share and the remaining 20 was moved into my Capital Account. The residual 45 (25 + 20) was never reinvested

    I haven't used Automatic Reinvestment for a while now as all my dividends are set to be paid out so I can't check. To be honest if you are not using the dividends as income I would focus on growth or total return and high dividend yielding shares are probably not the best solution to this
    • jaybeetoo
    • By jaybeetoo 16th May 19, 3:30 PM
    • 818 Posts
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    jaybeetoo
    • #7
    • 16th May 19, 3:30 PM
    • #7
    • 16th May 19, 3:30 PM
    It's potentially high risk just buying shares in one company. To spread the risk, how about an investment trust - you can still reinvest the dividends.
    • TrustyOven
    • By TrustyOven 16th May 19, 5:44 PM
    • 724 Posts
    • 749 Thanks
    TrustyOven
    • #8
    • 16th May 19, 5:44 PM
    • #8
    • 16th May 19, 5:44 PM
    Or how about a fund, to start with?
    That way you get to buy fractional shares in the fund, and you get to learn how to do all this (your first post in this topic suggests you are inexperienced).
    And if you buy an Income (Inc) version of a fund, you can see how the dividends come in etc.
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    • AnotherJoe
    • By AnotherJoe 16th May 19, 6:33 PM
    • 14,328 Posts
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    AnotherJoe
    • #9
    • 16th May 19, 6:33 PM
    • #9
    • 16th May 19, 6:33 PM
    You might as well throw a dart at a page of the FT as picking a share just because it pays dividends. Have you been reading about dividend reinvestment and decided this is the route to riches?You still need to choose a good share !!
    And why shares? Why not funds or ITs or ETFs? And if a fund choose an Acc and you don't have to bother reinvesting.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Damper132
    • By Damper132 17th May 19, 7:47 AM
    • 24 Posts
    • 31 Thanks
    Damper132
    yeah i guess your right, i just liked the idea of owning some shares in one company but maybe isnt the best financial decision i could make. i already have a handful of funds i invest in on a monthly basis maybe i should just stick to that for now there all accumulation units too so thats all taken care of
    • chucknorris
    • By chucknorris 17th May 19, 9:54 AM
    • 10,020 Posts
    • 14,864 Thanks
    chucknorris
    yeah i guess your right, i just liked the idea of owning some shares in one company but maybe isnt the best financial decision i could make. i already have a handful of funds i invest in on a monthly basis maybe i should just stick to that for now there all accumulation units too so thats all taken care of
    Originally posted by Damper132
    A couple of years ago I switched my whole SIPP and ISA (about 18% of my portfolio) into one company (British Land). But I became a little uncomfortable with the risk (and volatility), so I switched back into a tracker etf when I was in a position to take a profit. But earlier this week I re-invested about 5% of my portfolio value in British Land again, I thought the dividend (approx 5.7%) justified the risk. I'm still learning to appreciate what my risk comfort level is, I subsequently became very uncomfortable with placing 170k into 2 one year bonds in April, which only pay an average of 2.1%, I regretted it because after tax and inflation it guarantees a loss, it made me feel like a mug.
    Last edited by chucknorris; 17-05-2019 at 9:56 AM.
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    • LobsterMemory
    • By LobsterMemory 17th May 19, 11:31 AM
    • 139 Posts
    • 85 Thanks
    LobsterMemory
    I'm the first (only?) person to say stuff funds, shares are fine but when it comes to a single company, that's beyond my risk profile even with such a large company as Shell.

    I mean even before you can finish saying "Well, what can go wrong?", you remember what happened to BP

    And I think there was a chap on Motley Fool who put all his investments and dividends in Royal Bank of Scotland. Very happy with his strategy he was. Until he wasn't.
    • GooeyBlob
    • By GooeyBlob 18th May 19, 2:38 PM
    • 187 Posts
    • 334 Thanks
    GooeyBlob
    Nothing wrong with buying shares in individual companies so long as you buy them in lots of companies across different sectors. That way you aren't putting all your eggs in one basket. I was affected when Carillion collapsed but because it only comprised a small part of my portfolio my loss was covered elsewhere. If my entire portfolio consisted of CLLN shares I'd have lost the lot.

    Shell - RDSB - has been one of my top performing shares, but then I bought them a few years ago when oil was $20 per barrel and the share price was at a low point in the cycle. For now the quarterly dividends are great but I'll have to sell the shares before too long.
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    • pioruns
    • By pioruns 18th May 19, 4:04 PM
    • 89 Posts
    • 20 Thanks
    pioruns
    You can consider using one of SPDR S&P Dividend Aristocrats ETFs, which specialises in high yield stocks divided by desired world region, ETF passively chooses only the best yield earners, with number of rules, like never missed a single dividend, never missed dividend increase year by year, etc.

    They currently provide:
    SPDR S&P Global Dividend Aristocrats UCITS ETF
    SPDR S&P U.S. Aristocrats UCITS ETF
    SPDR S&P Euro Aristocrats UCITS ETF
    SPDR S&P UK Aristocrats UCITS ETF
    SPDR S&P Pan Asia Aristocrats UCITS ETF
    SPDR S&P Emerging Markets Aristocrats UCITS ETF

    They are quite good yield earners, have a look. I used to hold the UK version, 0.30% OCF, I was happy with it. This approach could be much safer solution than holding one single stock.
    Last edited by pioruns; 18-05-2019 at 6:17 PM.
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