Arbit, HYP and OEICs 2023 Q3

[Newroad]

Thanks for the reply, Arb.

Understood.

Regards, Newroad

[BullDog]

Many thanks again for this fascinating experiment. Quite an expensive income stream from ArbHYP, it seems.

Yes, but the principle of HYP is that one never sells it, so the price becomes irrelevant. After I'm dead, it will have served its purpose.
In any case, how expensive would it have been to give my capital away to an insurance company and buy an annuity? - yet people do it, and that was my main alternative option when I retired. In practice HYP was a good decision because the income from an annuity would not have been enough.

Arb.

I have an issue with some of that, but I know it's not a universally held opinion so I'll not elaborate beyond saying it's a ridiculous thing to say capital value doesn't matter. I fully realise it's something somebody else originally proposed. I'll leave it there.

Please keep up the experiment, it's extremely valuable, I think.

[funduffer]

I have an issue with some of that, but I know it's not a universally held opinion so I'll not elaborate beyond saying it's a ridiculous thing to say capital value doesn't matter. I fully realise it's something somebody else originally proposed. I'll leave it there.

Please keep up the experiment, it's extremely valuable, I think.

Maybe arb has overstated it - for, HYP capital is a secondary consideration.

The point of income investing, whether it be via a HYP of individual shares, a collection of IT's or OEIC income funds, is that someone in their retirement can generate an income to live on, without surrendering their capital to some financial company and without an arduous portfolio management burden. All these investment approaches mean full control remains with the investor, and capital is retained for legacies, care home costs or whatever, at end of life. In this sense, someone earlier in their retirement can live off their income and get on with their lives with only minimal intervention to their portfolio. Indeed, the hands-off approach lends itself to the portfolio becoming self-sustaining after the investor has declined in mental capacity and is unable to actively manage it. (Maybe this latter point is a key consideration on which investment approach to take).

The main interest in this thread is the relative performance of the 3 approaches - HYP, IT's and income OEIC's.

I agree this is an interesting experiment, which I am (partially) duplicating.

FD