Optimal share holdings in a HYP

[MrFoolish]

I'd say you should buy as many sensible candidates as possible. It is well known the top performing companies are few and far between - and these prop up the averages. You wouldn't want to miss out on these.

Don't worry about "keeping an eye on them". They are not like a mad dog running around the park that you have to stop from jumping in the pond. I have loads of different shares and they take no effort whatsoever - well, perhaps there's a corporate action once a year, and you have to tick a box. Besides, I thought the HYP idea was to leave them alone anyway.

[moorfield]

Thanks Ian,

That makes sense.

It looks like the community majority view is more or less equally split between 15-30. Equally important is the idea from tjh that even if you start with x no. of shares, over time with demergers, you are more likely to end up with x + y no. of shares.

Given that, I think your advice is sound: stick to 15 but each time you have cash to spend, do another trawl, if there is a new share with a higher yield and sustainable dividend in the same sector, double up in that sector, if there is a new share in a new sector with a higher yield and sustainable dividend, add that new share/sector, if neither of the first two apply, double up the holding of the same share. I think in that way, over time, you are going to end up with more than 15 shares. Add in demergers and this total will likely start ending up closer to 20 , 25 and then 30.
Thanks for your input.
F3nlander

One of my faves from PYAD is this, and it fits in well with your comments I think.

HYPersavers

https://web.archive.org/web/20071231131 ... avers.aspx

I've based my HYPing on it over the years.

Ian.

TJHs method improves on this because it gives you both a recommended order and amount of top up (20%) of existing holdings within cost and income limits. I think TJH uses 5% but you could set those wider if you prefer to run a smaller number of holdings. For example 7.5-8.0% should keep you to 15-16. You might subsequently find that a state of equilibrium arises that disqualifies all holdings from further top up, at which point you would add a new one, and then just continue ranking and topping up as you were.

[tjh290633]

TJHs method improves on this because it gives you both a recommended order and amount of top up (20%) of existing holdings within cost and income limits. I think TJH uses 5% but you could set those wider if you prefer to run a smaller number of holdings. For example 7.5-8.0% should keep you to 15-16. You might subsequently find that a state of equilibrium arises that disqualifies all holdings from further top up, at which point you would add a new one, and then just continue ranking and topping up as you were.

Yes, 5% is appropriate for a 30+ portfolio. Not practical if you are in the 20 share region, where 10% would be more appropriate.

TJH

[csearle]

Originally I aimed for 15 shares because of pyad but over the course of the last 25 years with new sectors occasionally coming into the frame, spin-offs, the slight extra diversification achieved by "topping up" a second firm in an existing sector, and the very occasional sale, it has slowly grown to 28 different firms.

So long as this number is greater than about 15 then it doesn't bother me too much. As it hasn't been lower than 15 since the turn of the century this has meant very little "bother." C.