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EssDeeAitch first HYP results

Practical discussions about equity High-Yield Portfolios (HYP) for income
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EssDeeAitch
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EssDeeAitch first HYP results

#190965

Postby EssDeeAitch » January 4th, 2019, 9:50 am

Well, having dipped into the HYP world in October, I can report nothing but gloom. Luckily, HYP constitutes only 5% of our (me and Mrs) portfolio but nonetheless, bad decisions hurt and I think that I have made two such decisions being WPP and SLA.

As can be seen, very little cheer but as the portfolio is only three months old, it is too early to pass a valid judgment yet a capital decline of 6.5% is not great in just three months.

Yield on book value is 6.5% and on market value, 6.9%. Unit value has decreased from £100 to £86 (not sure if I have treated SLA return of capital and dividends correctly but I feel that as long as I treat these issues consistently it does not matter - but I shall look at unitisation again). Holdings were equal in value at time of purchase.

I should have invested less in each holding and bought (say) three more to enhance the diversification. Big issue for me now regards WPP and SLA - stick or twist? Add or subtract? Pure HYP methodology or improvised? I also have an amount on IUKD which, being a FTSE 100 ETF I have not reported on here but clearly it has performed in line with the FTSE100



Any constructive comments would be welcome.

kempiejon
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Re: EssDeeAitch first HYP results

#190970

Postby kempiejon » January 4th, 2019, 10:19 am

EssDeeAitch - As you've highlighted 3 months is a trivial time for any stock market investment. You really cannot judge success or failure so soon - well done for unitising early on though over the next decade it'll probably prove very useful.
You know HYP is a long-term buy hold income strategy so what's the income like? You commented on yield but that is a function of price which we can see has declined. Do you have any cutters or have any made announcements regarding the future.
At these levels superficially I like SLA but it's a new entity, I hold because I used to have Standard Life.
WPP I was sucked in by the excellent history of increasing dividends and high yield then Soros got the push and now I'm not certain for new money, I'd give it a year.

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Re: EssDeeAitch first HYP results

#190972

Postby ReformedCharacter » January 4th, 2019, 10:22 am

kempiejon wrote:WPP I was sucked in by the excellent history of increasing dividends and high yield then Soros got the push and now I'm not certain for new money, I'd give it a year.

I think that's probably Sorrell nor Soros.

RC

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Re: EssDeeAitch first HYP results

#190974

Postby funduffer » January 4th, 2019, 10:25 am

It might feel bad, but there has been a general market decline over the last 3 months, so you would have probably seen this if you had invested anywhere in the stock market.

On the bright side, 3 months in, you should start receiving dividends, and this certainly makes things feel a lot better.

Also, if you are still building, now is a great time to add to your HYP, as the market is low, and there are some tempting yields around.

If you are of a nervous disposition and worry about fluctuating capital values, you might want to just wait a couple of weeks to see where Brexit is heading before launching more cash into the HYP, but otherwise now is a good time to buy, and in your case, further diversify.

Keep going, it is early days!

Happy New Year!

FD

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Re: EssDeeAitch first HYP results

#190975

Postby idpickering » January 4th, 2019, 10:27 am

I agree with the replies thus far. I hold all your shares, although I'm more diversified at 32 holdings. As for WPP and SLA, I'm ok to continue having these on board, and might top them up too. Hold your nerve, and carry on buying that income.

Ian.

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Re: EssDeeAitch first HYP results

#190978

Postby kempiejon » January 4th, 2019, 10:36 am

ReformedCharacter wrote:
kempiejon wrote:WPP I was sucked in by the excellent history of increasing dividends and high yield then Soros got the push and now I'm not certain for new money, I'd give it a year.

I think that's probably Sorrell nor Soros.

RC

Quite, yes thank you.

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Re: EssDeeAitch first HYP results

#190980

Postby OLTB » January 4th, 2019, 10:39 am

Yes, don't fret too much as it's such an early stage in the investment cycle and, as it's an income portfolio, when the income starts dropping in, you can buy more shares at the now low prices! I feel a bit glum at the amount of red - that can't be helped as markets are down, however, the planned dividend payments this month will take the edge off things.

Cheers, OLTB.

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Re: EssDeeAitch first HYP results

#190995

Postby tjh290633 » January 4th, 2019, 12:08 pm

A market fall, just as you are starting out, is always discoursging, but it is best to ignore it and carry on building the portfolio.

You will always have a wide spread of changes in share price, over the course of a year. This year I have BATS and WMH both down over 50%, but it is quite possible that they will bounce back this year.

Judge your holdings by the income that they produce, rather than share price movements. Don't be in too much of a hurry to dispose of holdings. Often things look different a few months later.

TJH

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Re: EssDeeAitch first HYP results

#191014

Postby EssDeeAitch » January 4th, 2019, 1:50 pm

tjh290633 wrote:A market fall, just as you are starting out, is always discoursging, but it is best to ignore it and carry on building the portfolio.

You will always have a wide spread of changes in share price, over the course of a year. This year I have BATS and WMH both down over 50%, but it is quite possible that they will bounce back this year.

Judge your holdings by the income that they produce, rather than share price movements. Don't be in too much of a hurry to dispose of holdings. Often things look different a few months later.

TJH


Firstly, thanks to all who have responded for your positive comments.

Despite my rotten timing of buying these shares, I intend to add to my HYP with others sectors over the next 12 months with a target of doubling my portfolio. I also run a High Yield portfolio of funds and IT's which I can objectively compare the the HYP. All interesting stuff!

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Re: EssDeeAitch first HYP results

#191015

Postby Arborbridge » January 4th, 2019, 2:00 pm

All you can do about the timing is to take it on the chin! It will come right at some point, and in the meantime you have the dividends coming in.

I started my HYP at the end of 2006 - and you know what happened over the next two years: the biggest set back in a generation. I did not go "all in" at once, quite deliberately, but bought in gradually over the next couple of years as I gained confidence.
I have never regretted it.

Keep cool and have faith that the market will eventually reward your patience.

Arb.

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Re: EssDeeAitch first HYP results

#191074

Postby monabri » January 4th, 2019, 4:42 pm

EssDeeAitch wrote:Despite my rotten timing of buying these shares, I intend to add to my HYP with others sectors over the next 12 months with a target of doubling my portfolio.


It was a shocking day on the market today... the FTSE 100 was up 2%. That means those new shares you are planning on buying will probably be at a slightly lower yield. Rotten timing if you topped up this afternoon.

Glass half full.

EssDeeAitch
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Re: EssDeeAitch first HYP results

#191078

Postby EssDeeAitch » January 4th, 2019, 4:52 pm

monabri wrote:
EssDeeAitch wrote:Despite my rotten timing of buying these shares, I intend to add to my HYP with others sectors over the next 12 months with a target of doubling my portfolio.


It was a shocking day on the market today... the FTSE 100 was up 2%. That means those new shares you are planning on buying will probably be at a slightly lower yield. Rotten timing if you topped up this afternoon.

Glass half full.


Yes, understood. But nonetheless, SLA is still down 20% and WPP down 12% on purchase price. Had I gone in three weeks later, it would be a different picture altogether but that's life. I just have to get on with it.

It seems to me that a combination of emotional incontinence and momentum investing drives the market so who can predict when to buy or sell? No-one so we just have to be in the market and not worry about movements too much. Hence the attraction to HYP investing.

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Re: EssDeeAitch first HYP results

#191175

Postby Arborbridge » January 5th, 2019, 9:06 am

EssDeeAitch wrote:It seems to me that a combination of emotional incontinence and momentum investing drives the market so who can predict when to buy or sell? No-one so we just have to be in the market and not worry about movements too much. Hence the attraction to HYP investing.


Bang on the point! :)

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Re: EssDeeAitch first HYP results

#191189

Postby monabri » January 5th, 2019, 10:07 am

EssDeeAitch wrote:
It seems to me that a combination of emotional incontinence and momentum investing drives the market so who can predict when to buy or sell?


I'd counter that it's more like 'emotional flatulence '.... ;)

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Re: EssDeeAitch first HYP results

#191224

Postby Wizard » January 5th, 2019, 12:02 pm

EssDeeAitch wrote:Well, having dipped into the HYP world in October, I can report nothing but gloom. Luckily, HYP constitutes only 5% of our (me and Mrs) portfolio but nonetheless, bad decisions hurt and I think that I have made two such decisions being WPP and SLA.

As can be seen, very little cheer but as the portfolio is only three months old, it is too early to pass a valid judgment yet a capital decline of 6.5% is not great in just three months.

Yield on book value is 6.5% and on market value, 6.9%. Unit value has decreased from £100 to £86 (not sure if I have treated SLA return of capital and dividends correctly but I feel that as long as I treat these issues consistently it does not matter - but I shall look at unitisation again). Holdings were equal in value at time of purchase.

I should have invested less in each holding and bought (say) three more to enhance the diversification. Big issue for me now regards WPP and SLA - stick or twist? Add or subtract? Pure HYP methodology or improvised? I also have an amount on IUKD which, being a FTSE 100 ETF I have not reported on here but clearly it has performed in line with the FTSE100



Any constructive comments would be welcome.

Are you in the building phase, well away from needing / wanting to draw income, or are you approaching the point where you need / want to draw income? Easier to comment if the context is understood.

Terry.

EssDeeAitch
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Re: EssDeeAitch first HYP results

#191230

Postby EssDeeAitch » January 5th, 2019, 12:16 pm

Wizard wrote:
EssDeeAitch wrote:Well, having dipped into the HYP world in October, I can report nothing but gloom. Luckily, HYP constitutes only 5% of our (me and Mrs) portfolio but nonetheless, bad decisions hurt and I think that I have made two such decisions being WPP and SLA.

As can be seen, very little cheer but as the portfolio is only three months old, it is too early to pass a valid judgment yet a capital decline of 6.5% is not great in just three months.

Yield on book value is 6.5% and on market value, 6.9%. Unit value has decreased from £100 to £86 (not sure if I have treated SLA return of capital and dividends correctly but I feel that as long as I treat these issues consistently it does not matter - but I shall look at unitisation again). Holdings were equal in value at time of purchase.

I should have invested less in each holding and bought (say) three more to enhance the diversification. Big issue for me now regards WPP and SLA - stick or twist? Add or subtract? Pure HYP methodology or improvised? I also have an amount on IUKD which, being a FTSE 100 ETF I have not reported on here but clearly it has performed in line with the FTSE100



Any constructive comments would be welcome.

Are you in the building phase, well away from needing / wanting to draw income, or are you approaching the point where you need / want to draw income? Easier to comment if the context is understood.

Terry.


I wont need the income for at least five years. HYP only forms 5% of total investments but I do have another 15% in high yield funds. I want to develop my HYP over the next four years and will be happy with lower TR in lower volatility is achieved.


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