portfolio reorganisation

[bluedonkey]

The title of my post sounds rather grand. In fact, this post covers action regarding just 1.8% of the portfolio by capital value.

Background: HYP running for over 10 years with LTBH. About 5 years away from drawing an income. HYP will be the main source of retirement income, the only other part being State pension.

The "soft" issue at play here is that as I get closer to relying on the income, I am developing a preference for less unreliability of income whilst at the same time wanting all the portfolio to pull its wait in serving me with dividend income. In the context of relying on HYP for retirement income, I am also slightly nervous with holdings in several single shares of 5% each, with one holding 8.5%. These shares are FTSE100 usual suspects. This has led me to start a very long term shift towards ITs. I say very long term because most of the money going into ITs will simply be dividend income and a small amount of new money.

Today I have sold Provident Financial, Interserve and Cobham. All are non-dividend payers with the prospect of resumption quite distant or at least unclear. The total funds are 1.8% of the portfolio. The proceeds will go into the same non-UK IT as I posted about on the IT board a month or so ago. This will make the IT holding 3.3%. As has been pointed out by Gengulphus, portfolio allocation to a single IT is not equivalent to that same % in a single company. Therefore the single IT holding could comfortably get to 10% or more. Not sure if further discussion of an IT will be OT so I will leave it at that.

I had considered putting the proceeds into WPP. This share would be a new holding with a well covered dividend. However, I decided to persist with the gradual shift in the portfolio towards ITs as that will deliver better diversification and lower dividend volatility.

[Dod101]

The sales certainly sound sensible and you will in five years time be in the same position as me with only investment income and the State Pension as income, so every share needs to count one way or another.

What is the non UK IT you are investing in?

Dod

[bluedonkey]

The sales certainly sound sensible and you will in five years time be in the same position as me with only investment income and the State Pension as income, so every share needs to count one way or another.

What is the non UK IT you are investing in?

Dod

The IT is Aberdeen Asia Income. I chose that as it was non-UK (diversification), on a discount and yielding about 4%.