The one-way HYP revolving door....

[Wizard]

There is another door through which people get in. But to suggest an answer to your question, maybe people grow more risk averse, and so find investment trusts more suitable to their characters as they grow older?

Chris

I find this observation (reinforced by similar points by others) interesting and wonder if anyone has told Doris?

If I understand the history of HYP the initial objective was as an alternative income stream to buying an annuity that required no (or at least very little) management, but many on this thread seem to say at the very point where they or a surviving spouse may be in the position that this is what is needed they want to move away from HYP. Certainly the risk of a 'pure' HYP are apparent from the updates on HYP1, it can result in a very imbalanced portfolio with very significant exposure to a small number of shares.

So personally I do wonder whether HYP is appropriate for Doris. Instead maybe it is best for somebody who is both interested in and able to monitor and manage the portfolio to avoid the imbalance seen in HYP1. As others have commented, it can be a time consuming exercise, but for many it is also enjoyable and stimulating.

With the focus on income and with capital being secondary personally I do not think it is appropriate for most people who are starting to invest young in order to build a portfolio for an old age many years away. My advice to my kids when they are old enough to invest would be to focus on total return.

So maybe there is a natural lifecyle for HYP. At the point where drawing income rather than reinvesting becomes the focus and somebody has the time and interest to follow HYP it may be a good option, say when somebody retires. But as their interest or capability starts to wane then a migration to another form of investment for income is appropriate.

Terry.

[Dod101]

So personally I do wonder whether HYP is appropriate for Doris. Instead maybe it is best for somebody who is both interested in and able to monitor and manage the portfolio to avoid the imbalance seen in HYP1. As others have commented, it can be a time consuming exercise, but for many it is also enjoyable and stimulating.

With the focus on income and with capital being secondary personally I do not think it is appropriate for most people who are starting to invest young in order to build a portfolio for an old age many years away. My advice to my kids when they are old enough to invest would be to focus on total return.

There are many interesting comments in Wizard's post and I have highlighted only two of them. As for the second point above, I have consistently thought and said this. Those in the building stage are surely using a HYP as a long term savings plan and as such what they need is a total return. It matters not whether this comes from income (presumably reinvested) or capital gain.

What pyad was advocating is an income producing investment strategy to replace handing over cash to an annuity provider. In that sense it does not matter where the income comes from, whether individual share or ITs or indeed ETFs or other collectives. That is one reason why his strategy is flawed and why strict adherence to guidance of the HYP Practical Board causes such division. As the OP pointed out, a mix between individual shares and ITs seems sensible; in fact it is almost being thrust a upon us given the narrowing of the universe of individual shares in the light of current circumstances. I will not for instance, buy any utilities nor retailers nor support services and I am very chary of property companies at the moment. I have managed to avoid the disasters of Carillion, Tesco etc in recent years but only because I have reduced my exposure and through what I like to think as careful management. This is definitely not a scenario for a Doris and I think Wizard's comments above are spot on.

Dod

[onthemove]

But then my main investment, Stobart, recently decided to cut their dividend. And that was a wakeup.

I was always aware after they'd raised their dividend that it was accounting for around 10% of my dividend income. And I was always aware that with individual shares, when I look at my top payers, if the top 3 aboloshed their payments, all of a sudden that margin would disappear and the dividends would no longer cover my living expenses.

I find STOBART uninvestable , very brave move to have it as your (former) top source of income.

It put itself in that position

Based on my original investment, it was a 'half' sized entry. The growth both in value, and of dividends to be my top source of income (and highest value by a long margin at one point) came from within.

Even now, after the recent cut and capital value drop, it still stands as my 4th best investment in absolute return.

The dividends have already returned 50% of my original investment over 5yrs.

It's a little unclear what their forwards dividend policy will be, in particular whether they still intend to pay 4 dividends a year, or revert back to 2. If the former, then the dividends might only have reverted back to where they were when I bought.

Sure there's risk - the very public dispute in the ranks didn't / doesn't look particularly encouraging.

But they do seem to have a number of investments that they've developed properly themselves - I mean Carlisle airport and others, where they aren't yet fully operational, etc, and once these come online, then we'll see whether the(ir) investments paid off. (Carlisle airport, and in particular Stobart as the operator, seem to be generating a lot of airtime on the local news in Cumbria and the north, so there does seem to be quite a regional interest in it coming online, and it is always seems to be a Stobart spokesperson they have on to be interviewed about when it will be open).

But they do seem to have a good track record of this kind of investment and making it work, so I'm happy to leave my (already grown) original investment in place without top slicing.

To return it to the original point of the thread, it is exactly this kind of company that I feel makes it better for those in the early days of building to favour individual companies. Sure there is more downside risk, but equally companies sometimes do come good as well. In fact, there seems to be ample evidence that on average, stock market investing is one of the few 'gambles' where the odds are in favour of the person taking the chance.

Which is how it should be - investing is / should be really about creating value.

And it seems to me that Stobart, are one of the few (UK) companies that I've invested in where they genuinely seem to want to chase opportunity and create economic value, as opposed to just being captain of a supertanker already in motion who's almost sole and primary goal is to simply not stuff up.

It's always easier for management to just keep doing what they've been doing, not rock the boat, just take the view that that's what their business is, so just keep doing it. If the market shrinks, then just shrink the company with it. Don't invest. Don't try to be different. A strategy which unfortunately just results in a slow wind down - but imv is all too common in company management.

Like where I work (though I'm not going to name the company) - the management won't 'invest' in things that will provide ongoing future returns, even when the owners have provided the money to invest, the day to day management just refuse to do anything different - they just sink the money in short term things that even they (the management) acknowledge won't be of benefit to future customers. They've taken the investors money, and not developed anything new of value to provide a future return. It's only going to end one way (a repeat of history to the brink of collapse as per before the current new owners injected new money). I certainly wouldn't invest in the operations where I work with the current management.

And it's similar in retail. My retail shares have done horribly. They just haven't been prepared to invest properly. Unbelievably they had the best opportunity to take on Amazon. Amazon were - and still are - always hindered by not having retail presence. People like me who work 5 days a week, aren't in when parcels arrive, so have to rely on the good will of our employers to accept parcels for us at work.

I'd much rather drive round to a proper shop in the evening - not some archaic, crumbling prison-esque royal mail missed collection point - instead somewhere that has ample free parking, a nice shop environment where I can go in and pick up my online order. And if there's a queue, it's indoors, spacious, and a nice place to wait a minute or two.

But no highstreet retailer who already have such prime retail locations, (imho) has developed a website to match the ease and convenience of Amazon for navigating and finding products, and trusting (to some extent, with caveats) the reviews.

Or also matched the extensive product range, backed by state of the art, highly efficient warehousing for dealing with high volumes of orders. That would require investment, which no-one but Amazon in the UK seem interested in investing in.

OK Stobart aren't in retail, but I do feel that in the areas in which they operate, they are one of the few companies I could point to where they really do seem prepared to take the risk of properly investing - and actually using that money to create something new, something that has the chance at least, of providing a future income stream where no such stream previously existed - i.e. truly to create economic value.

Time will tell whether it pays off... but as an originally half sized investment, I'm happy to see where this one goes.

I'm happy to be Doris on this one.

(Though reserve the right to change my mind if the circumstances change )

[tjh290633]

...The one thing that I have learned is to avoid fixed interest securities.

Unless I missed it there isn't any more detail in your post on this learning point. So I wondered if you could expand on how you reached this conclusion.

Terry.

I have had a couple of skirmishes with fixed interest securities. The first were those which came from my mother, LCC, Salford and Australia bonds, all 5.5%. The first to go was the Australian issue, the proceeds going into Jascot Compound Fund expected to yield about 8%. Then the Salford issue went, and I appear to have put the proceeds into shares in my employer, Babcock & Wilcox. Finally the LCC issue was sold in 1974 and more JCF was bought. The objective was a higher and increasing income, which was achieved.

The second was investing for my mother-in-law, to get more income than her savings bank interest provided. I got her 3 gilts, all standing well below par, with running yields in the low teens, bank rate being high at the time. Two rose above par as rates fell and were swapped into longer duration gilts with higher coupons. All were sold when she went into care.

My original thoughts were that I would move into fixed interest after retirement, but I found that this was impossible without losing income. Not only that, but it would have been fixed, falling in real terms. Consequently I decided to stick with my higher yield share strategy, which morphed into the HYP about the turn of the century.

One problem with fixed interest stocks is the maturity date. If you buy above par, which has been the norm for some years now, you are heading for a certain capital loss unless you switch to a later issue at a convenient time. Quite the opposite of LTBH and calling for a lot of hands on activity. With an HYP, if you are drawing all the income, very little management is called for and dividends have continued to rise over the years, ahead of inflation. When I get to the stage that active management becomes impracticable, then will be the time to switch into ITs. That could be a few years off yet.

TJH

[Crazbe7]

With respect, if your portfolio is as you describe, you do not have an HYP. Furthermore, if your intentions are as you have indicated, you are not following the HYP strategy, certainly not as understood on The Lemon Fool

Nothing wrong with that of course, it is obviously your portfolio to invest

And with respect, the current yield of my HYP is 5.2%, higher than the FTSE 100 benchmark average, therefore can be classified as an HYP.

I did not believe there was a defined HYP strategy for this board. I though that was the whole point of having two boards!

Crazbe7

[Raptor]

With respect, if your portfolio is as you describe, you do not have an HYP. Furthermore, if your intentions are as you have indicated, you are not following the HYP strategy, certainly not as understood on The Lemon Fool

Nothing wrong with that of course, it is obviously your portfolio to invest

And with respect, the current yield of my HYP is 5.2%, higher than the FTSE 100 benchmark average, therefore can be classified as an HYP.

I did not believe there was a defined HYP strategy for this board. I though that was the whole point of having two boards!

Crazbe7

I think the misunderstanding is that this thread was talking about moving from a pure HYP (as defined on practical) to another strategy and Visa versa. So your high yield portfolio would not fit that definition. You are right that for this board your high yield portfolio is a match but misses the point of this thread.

I may be wrong but I think that was the ops idea.

Raptor.

[Itsallaguess]

With respect, if your portfolio is as you describe, you do not have an HYP. Furthermore, if your intentions are as you have indicated, you are not following the HYP strategy, certainly not as understood on The Lemon Fool

Nothing wrong with that of course, it is obviously your portfolio to invest

And with respect, the current yield of my HYP is 5.2%, higher than the FTSE 100 benchmark average, therefore can be classified as an HYP.

I did not believe there was a defined HYP strategy for this board. I though that was the whole point of having two boards!

I think the misunderstanding is that this thread was talking about moving from a pure HYP (as defined on practical) to another strategy and Visa versa. So your high yield portfolio would not fit that definition. You are right that for this board your high yield portfolio is a match but misses the point of this thread.

I may be wrong but I think that was the ops idea.

Thanks Raptor, and yes, that's exactly what I was hoping would be discussed on this thread, and I've got to say that the response has been fantastic, with lots for me to digest and respond to.

With specific regard to Ian and Crazbe's particular discussion, that's the type of semantics that I'd prefer to keep off this thread - I'm sure we're all sick to death of that type of hair-splitting discussion, and we certainly don't need another one here, and I'm glad to see that the wider responses have been able to discuss the main thrust of the thread topic without getting into that type of debate....

Long may that continue, please.....

Cheers,

Itsallaguess

[OLTB]

I still class myself as a HYP newby and personally, experiencing the vagaries of the HYP income flow during the building phase (which is where I am) should callous my resolve during the drawing stage in the years to come.

I also have an IT and passive portfolio which were started at roughly the same time as my HYP so I would probably deposit more capital to these other portfolios than the HYP but I haven't quite made up my mind.

In my very limited experience, the HYP is delivering what I wanted it to - an increasing income, however, this could be because I have been reinvesting some dividends into it so naturally this has forced the income up. Perhaps I should unitise

My thoughts as to what my HYP will be used for eventually has changed - originally I wanted it to cover half my anticipated retirement outgoings. Perhaps now, I am thinking if it covers my fixed direct debit costs (utilities/council tax/insurances etc.) that would be great (the HYP income should be well above what it needs to be to cover these type of bills so any decreases in future income because of dividend cuts/cessations etc. shouldn't mean too much hardship). My IT and passive portfolios would be used to pay for the other pesky living requirements of food/petrol and some social expenses.

As long as I am flexible in my thinking, I'm pretty relaxed about HYP matters.

Love this thread by the way - loads of experience I'm taking on board!

Cheers, OLTB.

[Arborbridge]

Moderator Message:
Edited as already covered previously. Raptor.

In my case I run three portfolio, all of which are unitised : HYP, income ITs, and income OEICS. It just makes what I'm doing more transparent to me and others and helps me to monitor which method of investment is proving the most successful.

Arb

[monabri]

.........Perhaps I should unitise
Cheers, OLTB.

I unitised my portfolio but "where I went wrong" was to unitise on a global basis. What I should have done was to unitise all the HYP components (HYP Practical definition of components) and IT funds separately .


Edit..just now reading what Arb says about causing confusion....hence I wouldn't post unit performance on the HYP P board as it wouldn't be a true comparison.

[monabri]

So for the sake of clarity, it is always better to deal with these elements separately.
In my case I run three portfolio, all of which are unitised : HYP, income ITs, and income OEICS. It just makes what I'm doing more transparent to me and others and helps me to monitor which method of investment is proving the most successful.

Arb

Exactly....

[Raptor]

.........Perhaps I should unitise
Cheers, OLTB.

I unitised my portfolio but "where I went wrong" was to unitise on a global basis. What I should have done was to unitise all the HYP components (HYP Practical definition of components) and IT funds separately .


Edit..just now reading what Arb says about causing confusion....hence I wouldn't post unit performance on the HYP P board as it wouldn't be a true comparison.

Monabri,

That is exactly what I did so as to keep within HYP practical and also it helped me "compare" how the 2 strategies worked (jury still out that one )

Raptor.

[Arborbridge]

As OLTB commented, this has proved a most interesting thread, full of investor experiences, and from such an innocuous title.

One of the thoughts has been concerning "builders" and "drawers". In my view, I have never been convinced that HYP or any income plan is the best strategy for builders. My advice would be to go for TR via ITs or OEICS. My evidence for this is not just my experience, but a simple observation: in most years whenever I've checked, the average TR of income ITs has usually been worse than that of other sectors. Therefore, there must be some decent chance that by sorting the rest, one could achieve a higher TR. Now, I'll admit this is a very rudimentary way of looking at it, and it begs the question of whether one can monitor and pick those ITs which perform decently - or whether sticking to the slow build of income funds would be more successful for any one individual. Even in my (now largely income based) investment, it's clear that my growth funds are racing away compared with the income funds, and I've not put much effort into choosing them.
--00--

Yesterday, I entered up a dividend from an IT - Invesco income growth, IVI. And as I did so, I just checked the fund page on AIC and Trustnet, I noticed the yield is now around 4.6% and the discount is around 14%. The portfolio contains some shares very familiar to all HYPers and although not equal weighted, it is probably more equally weighted than some HYPs put up on the Practical board! So, it is not entirely surprising that with this an other ITs around, that people might be tempted to top up an IT rather than sink more into a more work intense HYP. Buying HYP shares on a 14% discount? - what's not to like?

OK, I'll give you the trade off: the dividend growth is only about 2.7%, but I would expect that to increase as inflation increases - broadly, the two are most likely linked together, if somewhat crudely. The TR is also not that great, but for IVI the TR it has given me is greater than my HYP.

This is one of several ITs which compete with HYP for our attention - and pertinent to myself, could form a good place for my Pearson capital, now yielding half of IVI.


Arb.

[Raptor]

Moderator Message:
As requested Itsallaguess (the OP), please keep posts relevant. We are talking HYP based on the principles of HYP Practical. Thanks in advance. All off topic posts will be deleted with no warning as per IAAG's request. Raptor.

[Walrus]

There is another door through which people get in. But to suggest an answer to your question, maybe people grow more risk averse, and so find investment trusts more suitable to their characters as they grow older?

Chris

I find this observation (reinforced by similar points by others) interesting and wonder if anyone has told Doris?

If I understand the history of HYP the initial objective was as an alternative income stream to buying an annuity that required no (or at least very little) management, but many on this thread seem to say at the very point where they or a surviving spouse may be in the position that this is what is needed they want to move away from HYP. Certainly the risk of a 'pure' HYP are apparent from the updates on HYP1, it can result in a very imbalanced portfolio with very significant exposure to a small number of shares.

So personally I do wonder whether HYP is appropriate for Doris. Instead maybe it is best for somebody who is both interested in and able to monitor and manage the portfolio to avoid the imbalance seen in HYP1. As others have commented, it can be a time consuming exercise, but for many it is also enjoyable and stimulating.

With the focus on income and with capital being secondary personally I do not think it is appropriate for most people who are starting to invest young in order to build a portfolio for an old age many years away. My advice to my kids when they are old enough to invest would be to focus on total return.

So maybe there is a natural lifecyle for HYP. At the point where drawing income rather than reinvesting becomes the focus and somebody has the time and interest to follow HYP it may be a good option, say when somebody retires. But as their interest or capability starts to wane then a migration to another form of investment for income is appropriate.

Terry.

I maybe drifting off topic here but feel compelled to respond to this.

I'm currently in the building phase and whilst I agree that Total Return is the goal I am building a HYP element as part of the retirement portfolio.

Currently I'm broadly

50% Passive Global Indexes (WPPs).
25% HYP Building/Income Trusts
5% Gold & Alternative Assets
20% Growth/Quality ala Fundsmith/Lindsell Train/BG Global Discovery

I guess my observations from running this has been that the 75% that has been invested outside of HYP has required no monitoring or effort on my part.

The HYP however has been somewhat a rollercoaster and I'd hazard a guess I spend upwards of an hour a day researching shares, plotting my next move, reading lemon fool etc. I have found it very interesting and there is real satisfaction in seeing how the annual income is increasing. I have found it has focused my mind on what needs to be saved to retire when I retire and how that retirement might look. Rightly or wrongly I also feel that I have a decent chance of outperforming in this area versus an income trust, purely due to being more nimble and potentially having a higher risk tolerance than something like City at this point in my investment journey.


That being said the HYP has now got to a size where some of the individual share values are getting to a point where a Carillon scenario for instance would really agitate me. Even though I know it's a portfolio and you have to look at the whole, the shock of a total wipeout to an investment decision that I have made, it would severely knock my confidence in the whole process.


Anyway somewhat rambling , apologies for that.

[Itsallaguess]

Firstly, can I just say a huge thanks to everyone who's responded in such a positive way to the intended spirit of this thread - I'm over the moon to see so many other people who have taken a similar journey from the tighter remit of the original HYP approach, and now widened their income-investments into some areas not easily covered by only allowing ourselves to fish in the main UK indexes for single-company income-investments...

Rather than create a huge number of individual replies to some of the great points raised by people already on this thread, I'll collate a few here and work my way through over the next couple of days -

There is another door through which people get in.

This is a very important point, and I'm glad it was raised so early on. I think the single greatest strength of the original HYP strategy was it's sheer simplicity, and I'm sure that this is one of the strongest magnets that pulled many of us towards the strategy in the first place. Any visitors to this website, of course, could be downright confused to see how we're somehow continually able to then over-complicate that simple strategy in the various ways that occur, but that's probably a conversation for a different day....

What I think is important though Chris, with regards to what many of us (myself included!) might see as a slightly romantic view towards an income-strategy that we might have 'grown up with' in an investment-sense, is to understand that there are now income-related investment methods available today that simply did not exist in the same scale, depth, or sheer affordability, when compared to the original days of the HYP strategy...

So I totally agree that there's 'another door' that many of us came in, but since then there's also been a few extensions built in the income-universe, with a few alternative doors put into some of the other walls, and whilst I'll always be grateful for the introduction to income-investing that the HYP method allowed me to take, I do now wonder if there might be alternative 'man-off-the-street' strategies available that might make good use of those extensions (such as income-IT's etc...) in a way that removes some of the issues that many of us on this thread have experienced with the original HYP approach....

Luni's 'Baskets' are one such example of this, and I really do think that if I had my time again then I'd much prefer to have missed out the single-company phase of my income-investing completely, and just started building my high-yield portfolio from a wide range of IT's instead...

My OH is likely to outlive me by a couple of decades and despite being a highly intelligent and capable person won't want to get emails about 'corporate actions' and whatnot.

My guess is that I'll probably lose out a little on income but the advantages of simplicity and income-stability are an acceptable trade-off for me.

Thanks RC - this is a really important issue to me too, and I'm actually disappointed that I didn't mention this aspect in my opening post, as I know we've had many discussions both here and back on TMF around the same subject...

Like you and Raptor, I think there's huge merit in having some 'touch-stone' Investment Trusts in our portfolios, alongside our other investments (where I'm sure we all like to think that we add value in those 'more complicated' decisions that we make...), where we can then leave clear and simple instructions to our families, that in the event of any issues regarding some of the wider investments, a sale-and-reinvestment out of some of the 'noisy' single-companies can be carried out, and the capital diverted back into the list of Investment Trusts already held in the portfolio.

I think this is a great idea, and allows us to continue to add 'noise' where we think we're adding value (!), but with a long-running caveat that there's a get-out-of-jail card available for anyone unlucky (!) enough to be 'lumbered' (!) with our investments after we croak it or become otherwise incapacitated.

Thanks for raising this point - it's a very important one, and has also been a large driver for me personally towards the Investment Trust universe, and gradually away from single-company income-investments.

I have a reasonably sized (for me) HYP portfolio, but realised that even with the exposure outside the UK from the FTSE 100 equities that I held, I wanted a little more exposure to different markets.

I now have 13.5% of my portfolio in IT's, namely HFEL, MYI, EAT and BRCI to give me a little more geographic diversity. I think this is something I will probably continue with.

This is another big reason for my original tip-toes into the Investment Trust universe too. It's clear that the FTSE 100 contains lots of global players, but it's still a relatively small selection of companies, where there are much wider choices, with often as wide a geographical spread (or more local, specific areas of expertise too, if required....) as we would perhaps like to seek out in the IT or ETF pool.

I've personally not gone down the ETF route as yet, but it's not something I'm ruling out, but it's clear to me that choosing to be blinkered by a single-company, UK-index-only approach can only concentrate risk, which is the very last thing we want to do when we're looking for regular income from our investments later in life...

The trade off of lower dividend growth [with IT's] against single (very expensive) point failures [with a HYP] is a worthwhile one in my opinion.

Thanks monabri, this is a key point for me too - it became quite clear to me during my 'purer' HYP days that 'chasing-yields' was something that I either simply wasn't very good at, or was a risky game to start with, or perhaps it's a case of both....

Like you, I'm really quite content now to give up a little of the starting-yield, and perhaps even a little of the dividend-growth, if it means almost instant-gratification on the diversity-front. Spread that income-risk as wide as possible....

Then there's the advantage of the income-reserve, which we know will be a benefit in some markets. Now I do get the argument that we can create our own income-reserve, and I do myself anyway, but I'm a big believer that if we can hide a few other benefits in our investment-back-pockets for when we just might need them, then all the better for it, I say....

I won't kid myself that there's not a cost to this approach (who would?) - but what I will do is to know that *beyond* that cost, there are still advantages, and that those advantages have been diversified-away from what might be seen to be the biggest single point of risk in terms of my income-investments, which is very clearly *me*.....

Cheers,

Itsallaguess

[daveh]

I started with a pure HYP, but wanted to diversify further with non UK shares. l didn't feel that I could invest in individual shares that were not listed on the LSE so have over time bought high yield ETFs. I've purchased EMDV, IDVY and IAPD to cover emerging markets, Europe and Asia/Pacific respectively. The ETFs are specifically aimed at high yield. I also have one pref. share LLPC, bought just after it restarted paying and at close to par. It's a perpetual so unless there are any financial/legal shennanigans it should keep paying a hefty dividend. As all these were bought with high yield in mind and were yielding significantly more than the market when purchased I consider that they all are part of my HYP.

[melonfool]

Another one here checking in to the outward revolving door.

I liked HYP for its simplicity and the income. I don't need income but I quite liked having income that I could choose to invest in a different way.

I started with some ETFs before I had enough capital to make buying individual shares make sense. Then I built my portfolio up to about £80k in 2017. Originally it was HYP shares, using normal rules for choosing. But I got a bit fed up of having to think all the time about which share to buy or whether to top up etc.

I had an influx of cash and I decided to buy some bluechip stalwarts - Diageo was in that group, and BT, the former more successful than the latter. I also hold Compass (for purely emotional reasons, but it's always done OK) and Unilever. I bought BG knowing they were being bought by Shell.

But still had £10k and was bored of trying to choose. So I bought two ITs.

Along the way I have also sold a few duds - Pearson, Carillion (I sold at about a 30% loss), Morrisons, Marston, Interserve, probably others I have forgotten. I bought Tesco and Lloyds when they were very low but they never really picked up and AJB had a 'sell holdings worth less than £500 free' offer, which I took them up on.

In 2017 I had to sell c£30k of holdings. It was hard to choose. That was when I sold Carillion, I top sliced heavier holdings, rebalanced, sold losers, sold any non FTSE100 and ICAP as it had split.
I held the ITs however.

Now I buy ETFs only but also have an AJB fund and if I have any large sums they will go into ITs.

Next week I will be selling SSE, ST, BLand due to Brexit concerns. The money will go into an IT, I just have to choose which.

I currently get c£2k pa income from my portfolio which I do like, it feels somehow more productive than just growth (everything is down right now, just done my end of year review and it's depressing, though the pensions seem to have done far worse, not sure how the fund manager do that!).

This is my somewhat mish-mash of a portfolio, the numbers are the % of the whole by value, I'm sorry I have no idea how to do tables, I did try, it looks fine in the preview but I can't get it to look the same in the post (what's the point of a 'preview' that doesn't actually show you what the post is going to look like?):

Cash 0.77

VT AJ Bell Passive Cautious 3.83
ISHARESFTSE250 3.90
SPDR S&P US Dvnd Aristocrats UCIT 2.01
iShares S&P SmallCap 600 GBP 3.54
Vanguard S&P 500 ETF 2.25
BT 1.89
CQS New City High 10.07
Foreign and Colonial 10.63
Diageo 2.87
Compass Group 4.52
Vodafone 2.83
Shell 5.47
Glaxo 3.91
Unilever 3.86
HSBC 3.98
BHP Billiton 3.83
British Land 3.93
Standard Life 2.87
SSE 3.43
BAE 3.87
ST Water 3.23
Schroders 4.47
L&G 3.93
Tate and Lyle 4.13

Mel

[88V8]

....I'd hazard a guess I spend upwards of an hour a day researching shares, plotting my next move, reading lemon fool etc.....

....some of the individual share values are getting to a point where a Carillon scenario for instance would really agitate me. Even though I know it's a portfolio and you have to look at the whole, the shock of a total wipeout to an investment decision that I have made, it would severely knock my confidence in the whole process..

I'd hazard a guess that for some, HYP and the associated stats and charts, might be termed a hobby We all need hobbies.

I lost a fair amount on Carillion, more than twice what we paid for our first house, and have pretty much a total wipeout on Interserve. They both seemed such a good idea at the time. In capital terms, I currently face a sea of red ink with a few islets of blue. Fortunately, my HYPish income has not declined, and we have enough capital that I don't really care but at one time I would have cared very much.

Indeed, I agree that HYP is not really a Dorisian activity. It needs both luck and skill, and constant adjustments.

If one can afford a lower yield, Funds are likely to be a safer bet. In terms of yield, they are, as I have said before, a form of managed mediocrity, but unless very narrowly based - UK Property for example - they are unlikely to lose much of one's capital.
So far, I have only BRCI but others may follow, as I have to admit that I am not always a good stock picker, I don't commit the necessary analysis time, and the Fixed Interest that was such an open goal a few years ago is now fully valued.

I topped up SDRC yesterday. More Financials, an already over-represented sector in my portfolio. Heyho.

V8

[OLTB]

In my view, I have never been convinced that HYP or any income plan is the best strategy for builders. My advice would be to go for TR via ITs or OEICS.

Hi Arb

My thinking is different to yours on this, but perhaps I should take note of your years of experience and others who have said the same

My way of looking at my HYP as noted in my previous comment is that I will eventually use the income it generates to pay my fixed costs for paying the essential bills (heat/light/council tax/insurance etc.) excluding food. This will hopefully not be required for another 13-18 years time. If I can, up to this time, slowly build my HYP, experiencing the ups and downs of the portfolio and building in the required (approximate) level of income needed then this will be comforting to me. I have mentioned in my previous annual review in August that my target direct debit/standing order costs will be in the region of £770/month so if I can ensure that HYP income is at say £1,000/month by the time I need it, this will build in a level of income that exceeds my requirements so that the excess income can either be re-invested or used to cover any HYP constituents that cut or cease dividends.

Experiencing the dividend flow in the meantime I feel is very important to me as I would be used to the practical way that companies can and do either hold/reduce/cease dividend flow.

However, aside from the HYP, I also have an IT and passive ETF portfolio so that I can experience the TR investing experience and these portfolios will be used to feed and clothe the family in the years to come. Any future capital maybe deployed in these IT and ETF portfolios primarily, with all dividends generated either reinvested into IT/ETF/HYP as I see fit (whatever needs topping up sensibly).

Perhaps your comment was directed at those just wanting to build a portfolio's value, rather than those who wish to use a portion of their portfolio for a specific income generating purpose, but happy to be corrected of course

With respect as always, cheers, OLTB.