MrFoolish wrote:Arborbridge wrote:Itsallaguess and myself have covered the subject adequately, saving Pyad the bother (though he has responded). Glad to have been of use.
I actually don't think the question has been properly answered. We seem to be swerving between "positively desirable to have multiple shares from any sector" to "yeah, more than one is ok" (I paraphrase). The word "multiple" could mean anything quite frankly.
The possibly more important question of the portfolio becoming unbalanced over time, income-wise, wasn't answered at all.
Was that question ever asked? We know that it has occurred, in HYP1 for example. In recent months a spate of special dividends from miners has led to dividend share of income being skewed in their favour. This is, however, self correcting to some extent as those special dividends are not repeated.
Sometimes, however, this is also associated with share price rises which can lead to shares becoming overweight in value terms. This raises the question of setting limits on weight and occasional rebalancing of the portfolio by trimming any overweight shares and reinvesting the proceeds in underweight shares with higher yields than the shares trimmed.
As an advocate of this procedure, I have found it necessary to trim overweight shares from time to time. I also reinvest accumulated dividends from time to time. In both situations I avoid adding to shares which would exceed my personal limits on both share of income and of portfolio cost which are both 5% of the respective totals.
My actions are all reported in a single topic, viewtopic.php?p=341678#p341678 on this forum, which you are welcome to peruse at your leisure.
TJH
