Arborbridge wrote:staffordian wrote:A related question which I've not had chance to think through yet.
PLI has been a pile of poo as far as capital performance is concerned.
My 12k investment is currently worth around 8.5k.
Keeping track of overall performance, I'm assume I'll get 8.5k worth of MUT, but it has actually cost me 12k.
Not really sure how to reconcile this difference when judging the overall return of my basket, as the purchase cost of my MUT will effectively "write off" the 3.5k loss.
I'm probably overthinking things, and it may become clear when I actually enter the details, but in the meantime, any thoughts would be appreciated.
It's actually PLI which cost you 12k, not MUT. What you have is 8.5k of capital being invested in MUT. Since MUT has been the better investment, I would think swapping out of one into the other is either slightly beneficial or neutral.
Personally, I'd prefer to stay with MUT than cash out - what would I do with it except buy something similar to replace the income hole left by PLI? True, the yield is lower, but I guess I can absorb that difference in my basket.
Arb.
Thanks Arb.
I do intend to keep the MUT I shall receive.
My muddled thinking results from my initial reaction that having bought eight ITs, (since increased to ten) I would stick with them in a Dorisian manner, and the performance calculations would be rather straightforward, because I would be dealing with purchases and reinvestment of dividends, but no sales.
When deciding which to top up my main consideration is to strive towards roughly equal purchase costs, but my 12k purchase of PLI becomes an 8.5k purchase of MUT. So I guess other things being equal, I'll simply divert funds towards MUT until it matches my others.
It's just a case of resetting my thoughts...
Staffordian