Gengulphus wrote:Itsallaguess wrote:Thanks Terry, that's some great information.
So, over about 14.5 years, you've had 17 shares cut their dividend completely. I don't think you've got anything other than what most of us would describe as a 'Generalist HYP', so hopefully that's a fair reflection of what many of us could have seen over that period.
It can't really be that, because all else being equal, someone who held a 30-share HYP over that period could expect about twice as many full-on cutters as someone who held a 15-share HYP over that period. So Terry's experience can be a fair reflection of one or the other, or neither, but not of both...
Or in other words, the measure needs to be normalised to the size of the HYP. There are various ways of doing that - one that I would suggest is the percentage of income lost to full-on cuts, averaged over the years. I.e. each year, add up the previous year's income of all shares that cut their income (the income lost to full-on cuts), and divide by the total previous year's income for all shares (to turn it into a percentage). Then take the average of those percentages over all the years in the period.
Gengulphus
Yes, what I had meant to say also was that it would have perhaps been a fair reflection that many of us could have seen over that period given a similar number of holdings, so thanks for raising that omission, as we'd clearly need to compare such figures against numbers of holdings / weightings etc.
You're quite right that it probably could do with some deeper analysis, but I'm happy that as a 'finger-in-the-air' study, and given the number of holdings in Terry's HYP (although it would be nice to know the number of holdings for each of the years reported?), and also given that 11 of those 17 full-on-cutters came during a single year of the financial-crash (2008, where such an idea regarding selling full-on-cutters might be best re-visited if there's wider market-anomalies to consider....), then it still looks and feels to me that having such a rule (ex huge cross-market crashes..) as selling full-on-cutters at an appropriate time and moving the capital into dividend-paying equities (shares or investment-trusts, which would be my preferred choice for this particular idea, to spread subsequent risk of other cuts..) doesn't on the face of it seem like an onerous idea in terms of leaving one exposed to being regarded as any sort of 'constant tinkerer'...
Cheers,
Itsallaguess