Creating a SHDP

[G3lc]

In these odd times, would it be worth discussing a Safe High Dividend Portfolio with the emphasis on safe?

[tjh290633]

In these odd times, would it be worth discussing a Safe High Dividend Portfolio with the emphasis on safe?

It could be. I guess the pharmaceuticals would feature prominently. A look at those companies still paying dividends would be a good place to start.

TJH

[monabri]

I'd be looking at ITs (global) with good reserves to compliment some individual UK shares.

[jackdaww]

I'd be looking at ITs (global) with good reserves to compliment some individual UK shares.

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i am doing just that , while not restricting selection to high dividends alone.

[Wizard]

There are also individual shares listed outside the UK that should be considered, as well as internationally focussed ITs.

But before anyone can really answer the OP needs to define “High”.

[Dod101]

There are also individual shares listed outside the UK that should be considered, as well as internationally focussed ITs.

But before anyone can really answer the OP needs to define “High”.

No need to define 'High', simply a 'Safe Dividend Portfolio' would surely be enough these days, more or less what I have, I hope.

That implies that it is sustainable; for many of us, quite enough. What I need after all is simply a portfolio of shares which provides me with sufficient of a dividend income that I can live off it, pretty much what the original Doris needed. I have never aspired to anything more and I think I may well weather the current storm.

Dod

[Alaric]

What I need after all is simply a portfolio of shares which provides me with sufficient of a dividend income that I can live off it

Is there an effect that if the dividend yield would be derisory, it isn't worth paying? For some years it may have been sufficient to define "high" as something above the yield on deposits or Gilts.

[TUK020]

pretty much the question I was trying to pose in this thread:
viewtopic.php?p=316810#p316810

[dealtn]

In these odd times, would it be worth discussing a Safe High Dividend Portfolio with the emphasis on safe?

Can you define "Safe" please? After all that is where you want the emphasis to be!

Does it refer to the Dividend, ie. it is unlikely to be cut/cancelled? Or does it apply to the Portfolio" ie. is the investment (relatively) safe from a valuation perspective (ie. Capital preservation)?

I suspect different investors might have different priorities and understandings here.

[G3lc]

Thank you to all the respondents and in particular to the above referred thread - the point i was trying to focus on was “safe” for both capital and yeald. My conclusion from what has been said and not said is that anyone starting to invest in any sort of share investment at this time should be be more than ever prepared to loose money in the foreseeable future - for what its worth I’m sitting on my hands, neither buying or selling - raging lethargy.

[Dod101]

In these odd times, would it be worth discussing a Safe High Dividend Portfolio with the emphasis on safe?

Can you define "Safe" please? After all that is where you want the emphasis to be!

Does it refer to the Dividend, ie. it is unlikely to be cut/cancelled? Or does it apply to the Portfolio" ie. is the investment (relatively) safe from a valuation perspective (ie. Capital preservation)?

I suspect different investors might have different priorities and understandings here.

In the original or 'purist' HYP the emphasis was on the income and that is where my priority would lie; indeed does lie. But I need my capital to at least maintain its value. That is where the tobaccos have been such a disaster area in the last two or three years.

Dod

[Dod101]

BAT is not bad in that regard but I cannot think that Imperial gives much comfort even taking into account its once very generous dividend.

Dod

[Bubblesofearth]

But I need my capital to at least maintain its value.

Dod

Then you shouldn't invest in shares.

BoE

[Dod101]

But I need my capital to at least maintain its value.

Dod

Then you shouldn't invest in shares.

BoE

Why ever not?

Dod

[dealtn]

In these odd times, would it be worth discussing a Safe High Dividend Portfolio with the emphasis on safe?

Can you define "Safe" please? After all that is where you want the emphasis to be!

Does it refer to the Dividend, ie. it is unlikely to be cut/cancelled? Or does it apply to the Portfolio" ie. is the investment (relatively) safe from a valuation perspective (ie. Capital preservation)?

I suspect different investors might have different priorities and understandings here.

In the original or 'purist' HYP the emphasis was on the income and that is where my priority would lie; indeed does lie. But I need my capital to at least maintain its value. That is where the tobaccos have been such a disaster area in the last two or three years.

Dod

Well if you "need" (rather than "prefer" or "like") your capital to at least maintain its value then that isn't "purist HYP" as you describe it as Capital was very much a secondary consideration, no?

Indeed if you do in fact "need" Capital preservation then it is difficult to see how this can be always met through equity investment.

Given that the OP has made a claim that a SHDP is to be safe from both a Capital and Yield perspective this thread isn't in the correct place and should be on Investment Strategies (just like the "STRIP" thread that was started at about the same time). Perhaps a Mod should make an intervention before this thread gets much longer.

[Dod101]

When I used the word 'need' I obviously gave the wrong message because it is an aspiration rather than a requirement. I know very well that there are no guarantees in investing but over a long period stock markets generally move upwards. What I really meant was that I do not disregard capital values and would never for instance have knowingly invested in a share which would behave like Imperial Brands, dearly bought income as I call it.

Dod

[G3lc]

Do you have a response dealtn apart from what looks like trying to close a thread down

[dealtn]

Do you have a response dealtn apart from what looks like trying to close a thread down

I'm certainly not trying to close the thread down. Just questioning it is in the correct place.

You said the "emphasis" is on safe, not on "high yield", and you have clarified this safety aspect relates as much to the Capital as it does to the income. That doesn't strike me as a "high yield" strategy that's all.

As to your question, "Is it worth discussing?" then I think it does have that attribute of worthiness and deserves discussion, which I believe is what we are doing.

Now if you are asking others to come up with how that strategy should work in practice, and offer up some potential investments to meet that strategy then I think that is harder to do, and I can't see you having made any such proposals so far. The difficulty is that "safe" and "high yield" are tricky bed-fellows. In Finance Theory a "yield" is a proxy for risk, and generally speaking the higher that yield the higher that risk. That's not overly controversial I think, and accepted by most in the finance community as true. Where that risk manifests itself is another thing. It could be risk of Capital fluctuation (indeed bankruptcy), it could be risk of dividend cut, or something else.

Now if you want the emphasis on "safe", and applicable to Capital, I think the closest match to high yield you are going to get is in maybe Fixed Income Credit markets, investing in Corporate Bonds. With Bonds ranking higher than equity in the Capital structure, and also having higher YTM, than Gilts (and many equity investments too) this is worthy of consideration.

Of course this is far from safe, although over a portfolio there is some mitigation of specific risks, but there will still be considerable interest rate risk, as well as (macro) corporate credit risk.

I hope that is a useful addition to an interesting thread, and potential strategy, but further confirms my thinking this discussion isn't taking place in the correct area of the site.

[jackdaww]

In these odd times, would it be worth discussing a Safe High Dividend Portfolio with the emphasis on safe?

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g3lc

i should say i have lifted your idea and transposed it for TR (total returns) onto the investment strategy board .

david.

[Dod101]

To help answer the OP's question, I would be happy to post my highish yield portfolio where as a direct result of Covid I have lost I think only two dividends, one being HSBC and the other M J Gleeson, the latter not being significant. I have also of course suffered like others from dividend cuts from Shell, Imperial Brands (although I doubt that that had much to do with Covid) and the Special from Admiral. Otherwise my dividends have held up so far fairly well. But I think the answer is that one should avoid being greedy and go for the likes of Unilever, Daigeo, the financials excluding banks, and a selection of ITs.

As I write this it is becoming familiar and I think the multiplicity of threads is becoming repetitious if that word exists.

Dod