PrefInvestor wrote:Well I am new to these boards (more used to ii) so apologies if my post here is any way off topic. I did mention HYP in passing, but only in passing…..
I had not encountered HYP before reading these boards, high yield investing yes (I do that myself) but HYP as an investing strategy aimed at non-sophisticated investors ?. Sounds like a possibly problematic combination to me. Investing in single stocks with high yields has the high probability of investing in dividend traps, resulting in good income (for a while) but also capital losses (as in the case of SLA covered in my earlier post). Repeated execution of such a strategy could be severely damaging to your capital and if the dividends are then cancelled or cut that could be very bad news indeed for your capital and hence your income.
Personally I feel that any investment strategy that I would call successful has to aim for capital growth (or at the very least capital preservation) as well as generating a useful income. But then I fully admit I am not fully versed in HYP and maybe it has elements designed to address these issues.
I am aiming for a future income, buying it now and reinvesting that income in buying more income until the day I need said income. I generally follow PYADs HYP philosophy with the addition of some high yield ETFs for foreign shares. I've generally done little or no trading* (I've top sliced SEGRO as it grew to be too high a % of the portfolio for my liking). I'm happy with the performance of my HYP viewtopic.php?f=56&t=15487
I started unitising from 31/09/03 at £1.00 per unit. Accumulation units have grown to £3.02 and income units to £1.48 and the income is 16.9p and 8.5p per unit respectively as of end of Dec 2018. I was not a sophisticated investor when I started and doubt if I am now. The start to the year has been pretty good - up 9% so far, which just about balance s the loses in the last 3 months of last year and the income is coming in as expected, slightly ahead of last year. I can't comment on others, but repeated execution of the strategy hasn't been severely damaging to income or capital for myself and there are a number of others on here who have also done reasonably well using variations of the HYP strategy, of course we could be self selecting for those who have done well and those who have done badly don't post.
* bar a fair bit of bed and ISAing in the last 2-3 years to get my un sheltered dividends below the dividend allowance.