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RFE
Posted: 16 September 2017 16:06:03(UTC)
#21

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Ok, So after all this sage advice I think I'll go the folowing route for my remaining 10k.

Vanguard Life 80% Eq. - 6.5k
ETFS Physical Gold. - 2k
Lazard Global Listed Infrastructure Equity Fund. - 1.3k

The remaining 500 or so into either:
Lloyds or J.D. Witherspoon

This should greatly reduce my Charges and fees. Next year I can then add to them monthly according to how they are preforming.

I apprieciate the time and advice, I feel more confident again about investing the rest.

Alan Selwood
Posted: 16 September 2017 21:29:57(UTC)
#22

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RFE
As I see it, investing is an imprecise science, where the outcomes will vary with time leriods, choices, skills and costs.
None of us are going to be consistently right (or perfect), and we all start from different points and are trying to achieve different objectives with different degrees and types of skill.
There ars therefore no perfect solutions that any of us can give, especially without the benefit of hindsight.

Looking at what you have said, my own observations are these:
At this stage of your investing career, your initial portfolio is significant, but relatively small, even though your future expected additions will make it considerably larger. This being the case, dealing costs are currently a major factor compared with the portfolio value. This suggests that a large number of small holdings is not beneficial.
However, you want a wide spread for safety.
While your portfolio is on the smaller side, it seems to me worth using the 'package' approach to investing. So a fund or trust or tracker of some sort that covers many different sectors at the same time.
A globally-spread multi-asset fund could be a start for your initial core investment.

Although I am not myself too keen on trackers, something like the Vanguard 60 or 80 may be the simplest start.

Then when you have a more substantial sum invested, and have become more experienced, you could add on some more specialised funds.

I doubt that it will be viable to pick individual shares in companies unless the total portfolio value is £100K+, otherwise diversification v dealing costs won't add up.

Try to use ISAs every year to shield you from CGT and tax on dividends/interest and to save hassle doing tax returns.
4 users thanked Alan Selwood for this post.
RFE on 16/09/2017(UTC), Harry Trout on 17/09/2017(UTC), Mickey on 17/09/2017(UTC), Guest on 18/09/2017(UTC)
Jim Thompson
Posted: 17 September 2017 05:24:48(UTC)
#23

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RFE

That's a really eclectic mix of investments!

I tend to treat the individual shares and funds as different animals. I would be inclined to have 7-8 funds or IT's for your size of investment.

My choices are currently:

Global tech (if that's what you call SMT)
Global smaller company
UK smaller company
US large cap
Japan
Global income (US/Euro bias)
Strategic bond/Corporate bond/Emerging market bond

(ok, I cheated a bit putting all the bond funds together! I don't do gold by the way)

I have a watchlist of shares I have bought, and would be prepared to buy, which number about 20. I am still learning and seeing what works best for me.

The discussions on how you would play it differently if your portfolio becomes 'enormous' is interesting. Tony P plays it the same, others may have more or a protectionist strategy. You do seem to favour not pushing the boat out too much, which doesn't seem to match your fund choices.

You have some trading history so probably enjoy the process, but you go on to say that you would like to hand down your portfolio eventually. I think if I were to hand over my investments to my wife tomorrow they would be more understandable. Much like what Warren Buffet said on the subject.
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RFE
Posted: 17 September 2017 09:17:56(UTC)
#24

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Jim Thompson;51184 wrote:
RFE
You have some trading history so probably enjoy the process, but you go on to say that you would like to hand down your portfolio eventually. I think if I were to hand over my investments to my wife tomorrow they would be more understandable. Much like what Warren Buffet said on the subject.


Laughably you're correct, I love the process....I'm an Engineer and love to figure S#it out....I like to try and find all the angles and variables, the reading and research etc...but, like in ths case I've made it too complicated by ignoring or not researching deep enough into the "Simpler" options like Lifetrust and World Trackers. Even though I try and live very simply I tend to shun the direct route from A to B....There's always seems to be a multitude interesting Zigs and Zags between the 2 points.

My desire to pass something along to my Daughter stems from my own childhood. My father passed when I was 10, He was also an Engineer, a savy and should I say simple investor. The Portfolio that he left my Mother over 40 years ago is still producing income. It was there when she needed to tap into it a little when a rough patch came along and it always provided a little Dividend income every year. My mother knows nothing about the markets really, but she was smart enough to know not to mess with what my Father had set up because it had always worked. Could it have returned more growth and income with a little tweaking...Sure but it still provides as is. I would like to pass down something similar to my Daughter.

As for holding a little Gold, I don't mind. I hold Physical Gold and Silver in small coins and Combibars, not necessarily for its market value at present but more for a "Zombie Apocalypse" scenario.
Tony Peterson
Posted: 17 September 2017 14:24:42(UTC)
#25

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I owe Captain Slugwash some thanks for his generous comment, and he has, in my view given the op by far the bast advice so far.

I would only differ a little from his four choices. Because our dividend haul this month exceeds the op's investable amounts, I would suggest that my choices for a 10K investment at Friday's prices would be as follows:

LBG 3800 ords
VOD 1200 ords
NG 250 ords
GSK 170 ords

This would bring in around £500 in dividends which could be added to new investments as, and when.

I have already used our BT dividend to buy back LBG at the beginning of the month at 63p the shares I sold in May for 72p
I have also replaced at under £15 all the GSK shares we sold in June at over £17.
Unless Vodafone suddenly rises back over 220p I will top our holding up further. when the SSE div rolls in.

And, skipper, I prefer NG to Centrica (but hold both) because its US operation matches its UK one in size.

And. RFE, you do need a serious sh*t detector switched on on these sites. We have many people offering you mantra driven advice which is absurd. .There is one IFA (that's a vested interest for starters), who hails from the Indian subcontinent, who with monumental effrontery describes the most successful 100 UK companies ever trading as "dinosaurs". And those who say "don't buy individual shares" (why do you think they would say that?)

I didn't get where I am today by not buying individual shares. There is, currently, no other game in town.

5 users thanked Tony Peterson for this post.
RFE on 17/09/2017(UTC), what me, worry? on 17/09/2017(UTC), Captain Slugwash on 17/09/2017(UTC), Mickey on 18/09/2017(UTC), Jeff Liddiard on 18/09/2017(UTC)
RFE
Posted: 17 September 2017 15:29:19(UTC)
#26

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Tony Peterson;51194 wrote:
I owe Captain Slugwash some thanks for his generous comment, and he has, in my view given the op by far the bast advice so far.

I would only differ a little from his four choices. Because our dividend haul this month exceeds the op's investable amounts, I would suggest that my choices for a 10K investment at Friday's prices would be as follows:

LBG 3800 ords
VOD 1200 ords
NG 250 ords
GSK 170 ords

This would bring in around £500 in dividends which could be added to new investments as, and when.




Wow, really interesting way to look at it...I have not really thought as much about Dividend income as I should have... I ran a scenario with the Stocks and amounts you listed from 2 May 17 until last Friday and even though the portfolio was down about 2.4% (-247 pounds) the dividend return was 427 pounds so the portfolio even though in a loss was still up in total 200 pounds Cash...

I think once I get a stable Core in place I'll have to do some more research into Income Shares... I guess maybe I'm being too risk adverse and looking too much at preservation and continuity over income and higher growth. There is a right balance out there for me I just need to find it and be comfortable with it.

A question about Dividends, do you need to hold a stock for the entire Quarter or Dividend Period to recieve it or is it pro-rata?
Tony Peterson
Posted: 17 September 2017 15:52:17(UTC)
#28

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RFE

Shares go ex-dividend about 4 or 5 weeks before they are paid. On a Thursday at 7 am.. Dates are available on company websites. Before that date if you sell, you sell the right to the next dividend. After that date, if you sell, you keep the right to the dividend.

The fact that the stocks I listed are down is precisely why I gave them as my present targets. They are trading at the bottom end of their year's oscillating range. Because we now enjoy a substantial dividend income - so much that I have pinch myself to believe my bank statements. I love falling share prices. It means I can increase my stake in the companies that have really made Britain great at even more bargain prices.

Of course, if you feel so strongly about making fund managers rich, go ahead with your plans. Not long ago much advice on these forums was on how to get into that "investing genius's" (read "self publicist") Woodford's funds. You could have been contributing to his share of a claimed offtake a hundred times larger than the salary of the Chancellor of the Exchequer, seven million pounds in 2016 (according to the Times), even while he was losing money from his followers.
3 users thanked Tony Peterson for this post.
RFE on 17/09/2017(UTC), Tim D on 17/09/2017(UTC), Mickey on 18/09/2017(UTC)
King Lodos
Posted: 17 September 2017 15:54:01(UTC)
#29

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Just to play devil's advocate – Tony's been investing since before index funds existed, before most homes had electricity, and when active funds charged you 5-15% before they'd even made you a penny.

If you want simple income nowadays, you could buy Vanguard's FTSE UK Equity Income Index:
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-ftse-uk-equity-income-index-income

HSBC Holdings PLC (UK Reg) 5.34%
Vodafone Group 5.16%
Lloyds Banking Group 4.76%
BP 4.67%
Rio Tinto 4.63%
British American Tobacco 4.62%
AstraZeneca 4.53%
GlaxoSmithKline 4.20%
National Grid 3.52%
Imperial Brands 3.26%

Historic yield : 4.49%


You get Lloyd's, Vodaphone, National Grid and Glaxo, but you also only lose 3-5% if one of those companies nosedives (as opposed to losing 25% of your capital) .. It charges you 0.22% – and you never need pay a single dealing fee.

Now personally I don't consider this an optimal way of investing .. I think dividends are a bit of an illusion (they're just earnings that are being paid out rather than reinvested) and dividend stocks could be in a bit of a bubble, given where interest rates have been going the past 3 and a half decades .. But income investing is nice and simple – if you focus on the income, you can ignore fluctuations in capital, and use them as buying opportunities

6 users thanked King Lodos for this post.
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Tony Peterson
Posted: 17 September 2017 16:11:41(UTC)
#32

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Poor Loddy

His veracity levels are crap, his mathematics (different thread) is weak, and he cannot even spell Vodafone.

That's what I expect from the mantra-spouters.

He cannot get his poor little brain around a few basic market facts. Buy when shares are cheap and sell when they are dear. The only mantra you need ever know.

Just rifling through my ISA trades this tax year. He thinks you cannot identify peaks or troughs in advance. My strategy, which I have explained fairly fully after boiling out the complex analysis and quantum mechanics, seems to pick virtually every local minimum (to buy more) and local maximum (to hack off a bit of profit) every time.

There has rarely been a time in history when the top companies were returning their present yields. That is because a crash has happened. I do not think another crash is imminent . But I would very much welcome a nice fall in the share prices of those in my list - targetted for next Friday when generous divs from Rio and SSE have poured into the pot.

You might like, RFE, to keep track of the future of the shares I mentioned plus the divs they pay. I challenge you to run a virtual portfolio in them, and keep us posted on what your fund managers manage to do for you.


1 user thanked Tony Peterson for this post.
RFE on 17/09/2017(UTC)
RFE
Posted: 17 September 2017 16:19:31(UTC)
#33

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I'm still going to put this Tranche into some Core Funds to build a base.

Vanguard Life 80% Eq. - 6.5k
ETFS Physical Gold. - 2k
Lazard Global Listed Infrastructure Equity Fund. - 1.3k

With the next, I might take a portion and use Tonys' advice and look at a few Dividend earners as Satellites. Valuing companies for Dividend growth is a whole new Can of Worms that I am definitely not experenced enough to do....at the moment

Thank you both for your time and opinions, the difference in your investing styles and advice (which both seem to work well) is food for thought.

Tony, I am very intrested in this Dividend Income style that you use, I'm going to keep a Virtual Portfolio with these Shares just to see. I guess that my relative inexperence with this stuff makes me a bit Gun shy for my largest ever foray into the Market. I do think there is a place for some of this more agressive investment style, I just need to get my head around it and understand it a little more.
King Lodos
Posted: 17 September 2017 16:24:06(UTC)
#34

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Therein lies the problem.

Tony's method involves using 'complex algorithms' and 'quantum mechanics' to do what virtually no other trader, fund manager or Nobel Prize winning mathematician on the planet achieves with any consistency: calling tops and bottoms in stock prices.

*If* he can do that: more power to him .. But I'm not sure it constitutes very good advice for new investors
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Keith Cobby
Posted: 17 September 2017 16:53:35(UTC)
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I did a bit of trading in the 1980's but then discovered investment trusts following the launch of the first savings scheme by F & C in 1984. Over time I sold my individual stocks and invested exclusively in ITs. Although then it was only UK stocks, it became too time consuming. Also where would you start to research US/China/India etc. And what about property and private equity. By investing in ITs (or OEICs) you are subcontracting a lot of the effort.

I would suggest the novice investor to select a few ITs (eg F & C, F & C Global Smaller Companies, SMT etc) and buy through the managers own platforms. It is very inexpensive to drip money in monthly or invest small lump sums. Anyone can start a global investment portfolio from £25/30 per month.
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andy mac
Posted: 17 September 2017 17:45:18(UTC)
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Hi Tony good to see you back after a few weeks/months

You have probably said in the past, but I cannot recall, do you use a broker or a platform?
Obliviously the costs of buying and selling are small beer in the grand scheme of your pf
How do you judge how much to top slice?

I am gradually building up a pf of my suppliers VODA SVT PEN NG but have kept clear of banks
I did have HL but to profit and also started using Iweb
So thank you for pointing me in that direction
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Tony Peterson on 17/09/2017(UTC)
Tony Peterson
Posted: 17 September 2017 18:09:47(UTC)
#37

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andy mac

We have ISA and nominee accounts with a popular broker. Yet our core holdings which rarely get touched (unless needed in March to provide capital gains up to the tax free limit) are in certificated form, preferred because of digital risks.

All the fun in in our ISAs. The "quantum mechanics" ideas I use, I have explained before. Apart from our top 3 holdings most of our larger holdings are tied by value to a permitted range. They are forbidden to have values over 110k or values under 100k Typically, 5k gets sliced off those that stray up. And 5k gets added to those that stray down. Works like magic. Look at the graph of any FTSE 100 company and rule lines 5pc down and 5pc above your purchase price. And you might see how easily I can find bargains and profit takes.

Loddy's posts simply betray his lack of comprehension skills. Complex analysis is a fantastic branch of mathematics which I mentioned. He said I use "complex algorithms" - something he made up. Algorithms are just souped up flow charts.

You do not need either to play the market to grow your savings in an optimal manner. Cutting out middlemen is the key to efficient investing..

6 users thanked Tony Peterson for this post.
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King Lodos
Posted: 17 September 2017 19:15:41(UTC)
#39

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As an ETF guy, you can buy what's known as an Equal Weight index.

And what this will do is hold every FTSE100 company at 1% .. And because some stocks go up while others go down, it maintains these 1% weightings by periodically selling winners and buying losers .. And it will do this for you extremely cheaply.

Do they outperform? Sometimes .. But this strategy can be somewhat 'Martingale'-like .. If you imagine Vodaphone's looking cheap, but it's actually on its way to 0 (maybe over months, maybe decades), then you wind up doubling down a loser, perhaps all the way to ruin .. Likewise when a stock like Amazon is on its way to a 3,000% return, you don't want to be top-slicing every time it's up 15% .. The strangest thing – and a testament to market efficiency – is that two such different approaches (equal-weighting and cap-weighting: the regular index) produce such similar returns
Tony Peterson
Posted: 17 September 2017 20:19:42(UTC)
#40

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Loddy

I have answered (you believe dishonestly) many questions on these forums.

You know I am ancient and retired. You are fairly clearly not retired. Yet you spend far more time posting than I do.

Are you employed? If so what is your job description? Do you agree that vested interests should be declared?
RFE
Posted: 17 September 2017 20:36:04(UTC)
#38

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Tony Peterson;51203 wrote:
andy mac

All the fun in in our ISAs. The "quantum mechanics" ideas I use, I have explained before. Apart from our top 3 holdings most of our larger holdings are tied by value to a permitted range. They are forbidden to have values over 110k or values under 100k Typically, 5k gets sliced off those that stray up. And 5k gets added to those that stray down. Works like magic. Look at the graph of any FTSE 100 company and rule lines 5pc down and 5pc above your purchase price. And you might see how easily I can find bargains and profit takes.


I've taken the 4 Shares that you previously listed(LLOY, NG,VOD,GSK) and played with some historical data and I can slowly see the pattern emerging with the 5% rule...Very interesting. It definitely deserves a little more research and experimenting. I'm assuming this type of investing could only be done with solid Blue Chips that will pull through any kind of market.
Tony Peterson
Posted: 17 September 2017 20:48:07(UTC)
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RFE

You are getting there. Unlike others.

But the principal point I am always trying to make, in trading in markets which are essentially chaotic, no one has any privileged knowledge of future share price movements.

No matter how small the offtakes of fund managers (who know the future no more than you )- this talk of "research" only means free lunches with persuasive CEOs, The talk of fund managers' "star quality" just mean "past luclk",

A strategy which imposes your own order on future chaos will beat most of them. And those offtakes compound.





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RFE on 17/09/2017(UTC)
King Lodos
Posted: 17 September 2017 23:17:23(UTC)
#41

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Tony Peterson;51205 wrote:
Loddy

I have answered (you believe dishonestly) many questions on these forums.

You know I am ancient and retired. You are fairly clearly not retired. Yet you spend far more time posting than I do.

Are you employed? If so what is your job description? Do you agree that vested interests should be declared?


I don't think you can go too wrong investing in quality companies and buying dips .. But your system sounds like a cross between swing-trading and rebalancing – and if you've found an effective way to beat the market doing that, you should write a book.

I used to be a journalist – but as the industry went down, I've transitioned to managing my own money full-time .. Any down-months are usually compensated with my slice of our Bridge winnings




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Guest on 19/09/2017(UTC)
Captain Slugwash
Posted: 18 September 2017 07:13:18(UTC)
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King Lodos;51197 wrote:
If you want simple income nowadays, you could buy Vanguard's FTSE UK Equity Income Index:
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-ftse-uk-equity-income-index-income

HSBC Holdings PLC (UK Reg) 5.34%
Vodafone Group 5.16%
Lloyds Banking Group 4.76%
BP 4.67%
Rio Tinto 4.63%
British American Tobacco 4.62%
AstraZeneca 4.53%
GlaxoSmithKline 4.20%
National Grid 3.52%
Imperial Brands 3.26%

Historic yield : 4.49%


You get Lloyd's, Vodaphone, National Grid and Glaxo, but you also only lose 3-5% if one of those companies nosedives (as opposed to losing 25% of your capital) .. It charges you 0.22% – and you never need pay a single dealing fee.


Or for only 0.07% p.a! the iShares Core FTSE 100 ETF. Quarterly dividend of circa 3.8% and similar holdings as above.

This is almost enough to draw me to the dark side.... ;0
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Harry Trout on 18/09/2017(UTC), Vince. on 18/09/2017(UTC), Guest on 19/09/2017(UTC)
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