monabri wrote:
11% of a p/f on companies at the lower end of the ftse100 is "brave/ reckless" -
VOD, however, is at the top end of the ftse100.
Does one see VOD going under anytime soon? ( I actually think they will recover ...and the yield will decrease)
The potential issue with building something like an 11% position in Vodafone, which has seen the share-price drop from a 12-month high of around 240p to a near 12-month low today of around 175p, is that any sort of large recovery in the share-price then potentially exposes you to having really quite a large amount of your HYP portfolio in a single share...
What I would suggest is that someone who might look to expose themselves to the above situation has a good think about what their tinkering strategy might be if the above were to occur, otherwise they could find themselves in the unenviable position of holding a HYP that begins to look and feel like HYP1 in terms of capital and income being delivered by a small number of very large holdings.
Personally, I wouldn't want to be exposed to any single HYP component at all that's around that level, unless there are good reasons for that, and sometimes there might be good reasons for that, which might mitigate the above view somewhat...
One of those situations might be to do with employee share-options, which often have a holding period of a minimum of 5-years before the full benefit of the options can be taken - if someone is saving quite a large amount into such a scheme, then I can imagine that a large position might easily be built up, so there's probably some situations where it's more difficult to mitigate against this type of thing happening, but where it is possible to mitigate, then I think some effort should be done to do so...
Cheers,
Itsallaguess
