Wizard wrote:idpickering wrote:Thanks for your input Arb, and I agree with your comment above regarding the number of high yielding shares currently. I’m reminded though of Dod’s wise words about chasing those high yields, so 5% from DS Smith would do me fine. I also want to buy more before the SMDS ex div date for the final, on 3 Oct, coincidently my 58th birthday.
also the top up would bring them to average capital value weighting.
Why invest now in a share about to pay some of the money back (less tax), and then have to reinvest that money (less dealing charges)? Surely better to invest in a share not about to pay some of it back. The amount lost on one re-reinvestment may be small, but if it is a regular tactic the additional costs incurred over the life of the portfolio may become meaningful.
The only reason I can think of is because one enjoys the process of reinvesting, but that is then about a hobby rather than an economically rational decision. Nothing wrong with it, but a different motivation.
If we all agree that the single most important thing here is to simply keep 'plugging away' over the years, and it's acknowledged that large parts of the 'heavy lifting,' when it comes to long-term investments, are carried out simply by 'time itself', rather than any particular skew or slant that we might as individuals actually think we 'value-add' to that investment process, then I think it's very important for each of us
as individual investors to simply find 'ways and methods' that suit us as individuals, and which allow us
as individuals to simply 'keep on with the master-plan'...
So whilst we may be able to look at specific elements of each of our own investment processes, and perhaps say why they might not be 'optimal' from a purely 'investment return' point of view, I don't think we should lose sight of the fact that if a particular 'slightly non-optimal' process is favoured by individuals, and they choose to use those processes anyway (simply because they prefer to do things that way), but by doing so it continues to encourage them to 'keep on with the master-plan', then I honestly think that we should allow ourselves to persist with such a 'minor impact' process.
'For the greater good', if you like...
I know I probably carry out a couple of HYP processes where I could show that over many years I might pay a couple of hundred quid over what it might cost to perhaps follow some more 'financially efficient' processes, but I do so in the full knowledge that there's a slight cost to be borne by me following processes that I
prefer to follow, over those which I
wouldn't prefer to follow, but which might be slightly 'cheaper' over my investment lifetime.
I quite happily do this because I am much more comfortable doing so, and as we know, 'comfort' often comes at a cost, and this is a cost I'm really quite willing to pay, so long as by doing so it means that I can 'keep on with the master-plan'....
Cheers,
Itsallaguess