Dod
This view moved here to keep it on-topic. - Chris
Thanks to jfgw,Rhyd6,eyeball08,Wondergirly,bofh, for Donating to support the site
Dod101 wrote:
I am inclined to think that common sense is prevailing and that the whole hearted dedication to the original HYP concept is waning.
Midsmartin wrote:Posting nervously as a non-hyper, I would imagine that a diversified portfolio should use a diverse range of styles: some hyp-style stocks, plus other equities as well. I often read hyp posts and find them useful, but Ive always feared a slap if I posted!
Itsallaguess wrote:We're all different, and if we might accept that *any* investment strategy is likely to have some aspects of it that may or may not suit any particular individual investor, then I'd simply describe my own journey away from the HYP approach as one of a stark realisation that it's own shortfalls as an income-strategy just didn't suit me personally, and if I were to list the primary ones that I personally struggled with then they would generally be -70%+ of FTSE 100 earnings are sourced from foreign. In many ways the FT100 is a global excluding US type holding, so potentially a lower cost more tax efficient way to hold global exc. US, but where there is some UK concentration risk involved such as induced by Brexit. That could however wash i.e. the UK might relatively outperform/rebound from 2022 onward
- Too narrowly focussed in geographical scope, in terms of being UK/FTSE-focussed, and missing out on more global emerging markets, for instance
HYP selected stocks from across sectors
- Too narrowly focussed in sectoral scope, in terms of the UK/FTSE market generally being dominated by 'old-school' industries, and often missing out on emerging sectors
On a total returns based measure with a SWR method of withdrawals a HYP was reasonable, providing consistent regular inflation adjusted income
- High volatility of income due to regularly fishing in areas of the market that often have yields that are simply 'too-high' to be regularly sustainable over the very long term
HYP (non tinker) was low effort
- Generally needing more attention and 'hands-on action' than the type of income-strategy that I was actually looking for, personally
TUK020 wrote:As IAAG has eloquently laid out the shortfalls of relying only on "HYP", I am also augmenting my hyp with IT investments to get diversification into sectors and geographies not represented adequately in the FTSE.
I am also moving towards ITs as a direction of travel for their income smoothing properties, and the reduced need for management and attention.
1nvest wrote:HYP total return hasn't been easy/friendly to measure as postings tend to focus upon income, and opted to compare to lousy choices such as just the FTSE 100 price only value.
Arborbridge wrote:No one has ever opined that HYP provides TR, so don't test it against that criterion.
1nvest wrote:Arborbridge wrote:
No one has ever opined that HYP provides TR, so don't test it against that criterion.
I do, and its not for you to say what or what not I should test or not.
Comparing total return is the only way to compare dissimilar asset allocations/styles as a relative comparison as to what rewards those investments provided.
1nvest wrote:Arborbridge wrote:No one has ever opined that HYP provides TR, so don't test it against that criterion.
I do, and its not for you to say what or what not I should test or not. Comparing total return is the only way to compare dissimilar asset allocations/styles as a relative comparison as to what rewards those investments provided. Fundamentally given total return you can draw the same £££ income equally to level the income production if just part of total return (income) was your sole focus. Disregard of capital value has always been one of those uncommon quirks that HYP'ers have gospelled.
If at the start of 2011 you took HYP and added equal capital amounts to BRK and a FT250 accumulation index fund, a three way initial equal split, left to accumulate and ...
Some may find such total return measures and potential diversification benefits (dissimilar yearly gains) to be of interest. Turning focus away from portfolio total reward to just part of total return just obfuscates and more often leads to pointless negativity/confrontation.
To me that chart shouts that taking the same income at the same times out of total return from a blend of those asset would generally have been better than just holding one alone. Yes holding the best alone (US stock/BRK) would have been the optimal, but that could not have been predicted in advance. With that three way annualising 2.8% more than HYP1 total return, then that had the capacity to provide a higher income production (or the same income production with greater capital growth), whilst also being more broadly diversified and with a lower Sharpe (better risk adjusted reward). You cannot gleam such measures from just looking at income alone.
1nvest wrote:Arborbridge wrote:No one has ever opined that HYP provides TR, so don't test it against that criterion.
I do, and its not for you to say what or what not I should test or not.
1nvest wrote:Arborbridge wrote:No one has ever opined that HYP provides TR, so don't test it against that criterion.
I do, and its not for you to say what or what not I should test or not. Comparing total return is the only way to compare dissimilar asset allocations/styles as a relative comparison as to what rewards those investments provided. Fundamentally given total return you can draw the same £££ income equally to level the income production if just part of total return (income) was your sole focus. Disregard of capital value has always been one of those uncommon quirks that HYP'ers have gospelled.
TUK020 wrote:One of the attractions of the pyad "HYP" strategy was that it would create sufficient cash (albeit with some volatility) that a pensioner could draw income from it without having to make decisions about what to sell, or when. One also did not need to incur transaction costs in harvesting income.
Arborbridge wrote:If I was pot building I wouldn't invest in UK companies using HYP.
Return to “High Yield Shares & Strategies - General”
Users browsing this forum: No registered users and 31 guests