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Dividend investing


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23rdian

This is the first time I have started a new topic but this is something that I'm finding I'm increasingly interested in. i.e. Investing with an bias (if not exclusively) towards income rather than growth in order to create a passive income in order to need to go to work less.

However, despite some research. The best yields in funds/ETFs you can get in the UK appear to be around 5pc. Here is a good (IMO) video I found discussing these.

 

However the Yanks and Canadians seem to have a lot of funds/ETFs and REITs that produce on average about 10pc. I know some of these have higher fees and I'm aware of traps of course but still ..

This guy is a good example of what I mean:

I attach a still from the above video and his entire portfolio is available for download from https://passiveincomeinvesting.ca/wp-content/uploads/2021/04/655K-Portfolio-April-2021.xlsx

Is there any way to get access to these funds or is it all down to the KID/KIID stuff. Is there anything like covered calls ETFs available in the UK?

Anyone else here into this type of Investing?

 

 

 

 

IMG_20210427_214808.jpg

Edited by 23rdian
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Inigo

I used to follow the HYP (high yield portfolio) on the motley fool.  Interminable technical analysis and debating on exactly what the "rules" were, but essentially looking for stable, large cap, high yield dividend payers.  

I still hold a number of that style of share and my current SIPP is about 50% in shares that are paying over 6% divis.  It all went a bit tits up in the financial crash as one of the stalwarts of that group was Lloyds.

I'm quite heavy in the oilies at the moment as they tick both the HYP box and the general sentiment of DB's thread.  I also have a chunk in a Vanguard high yield fund for, hopefully, a faster reaction time when the BK hits.

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Harley

A good choice of thread.

I built up portfolios seeking good level of divs.  I held ETFs and trusts.  I suffered too much loss of capital on the ETFs as they just invested in the best payers regardless of company fundamentals.  The trust performance was not great due to buying at too high a price (premium).  Plus the fees.   Maybe I would have done better if I had paid more attention to the ETF objectives and premiums and invested accordingly.

I then bought specific stocks (using dividenddata.com) in my ISA but that restricted me to mostly FTSE stocks and I was soon buying iffy companies as my list got longer (two portfolios with 25 stocks each).  I also did not pay enough attention to screening the company fundamentals as I had not developed a robust set of screening criteria.  I still own several of the dogs.  I switched from ETFs and trusts because of their performance and because I thought they were risky (Woodford's fund, etc).

IMO I've now matured to a value investor (using select fundamental criteria) who includes seeking a minimum of about a 3% yield.  I keep an eye on this figure in case it's too high.  So I seek a return plus an opportunity for upside price appreciation.  I only buy stocks with technically relatively low prices.  I also go beyond my ISA so I can buy international stocks, where I adjust the 3% yield to cover any unrecoverable WHT.  I may buy trusts in my ISA if I can't access enough international stocks or I may move brokers as I sell my dogs.

Each to their own but for me I learnt some lessons and adjusted my approach based on the results and my way of working, etc and put in the effort to be able to support my new approach.  I have achieved far higher returns, although only got to prove the approach with somewhat smaller sums before most things got over valued.

I struggle to find investable stocks atm because fundamentals are poor or because stocks are overvalued.  I've varied my screening criteria but this has not had a material effect, suggesting this is a poor time for me to long term invest (as opposed to trade) in equity.  I do however see equity as a longer term essential source of income given my guesses about the future for bonds (i.e. the 60:40 portfolio) and the currently poor annuity rates.

DYOR, not investment advice, etc.

Edited by Harley
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Harley
10 hours ago, 23rdian said:

This is the first time I have started a new topic but this is something that I'm finding I'm increasingly interested in. i.e. Investing with an bias (if not exclusively) towards income rather than growth in order to create a passive income in order to need to go to work less.

However, despite some research. The best yields in funds/ETFs you can get in the UK appear to be around 5pc. Here is a good (IMO) video I found discussing these.

 

However the Yanks and Canadians seem to have a lot of funds/ETFs and REITs that produce on average about 10pc. I know some of these have higher fees and I'm aware of traps of course but still ..

This guy is a good example of what I mean:

I attach a still from the above video and his entire portfolio is available for download from https://passiveincomeinvesting.ca/wp-content/uploads/2021/04/655K-Portfolio-April-2021.xlsx

Is there any way to get access to these funds or is it all down to the KID/KIID stuff. Is there anything like covered calls ETFs available in the UK?

Anyone else here into this type of Investing?

 

 

 

 

IMG_20210427_214808.jpg

I watched a bit of the first video.  I would be cautious as UKDV is currently yielding a lot less than the 4%+ they quoted at the time.  Such has been the market.  I would also take issue with the emphasis on distribution only ETFs.  This could make you liable for income tax outside of a tax wrapper whereas you may be able to sell down an accumulation ETF and stay within your annual CGT allowance.  DYOR, not advice, etc.

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Harley

I'm liking this thread!

Just to emphasise, whatever approach, the fundamental IMO is to buy low (or at least at a reasonable price).  Never over-pay and put capital at too much risk.  And that requires a combined look at fundamentals, technicals, and macro.  Else pay someone else to do it.

 

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23rdian
Posted (edited)

Thanks for the replies so far folks. Is there any of the stuff in the second video that's available to us? I am starting to feel a bit hard done to being in the UK

Edited by 23rdian
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23rdian
9 hours ago, Harley said:

I watched a bit of the first video.  I would be cautious as UKDV is currently yielding a lot less than the 4%+ they quoted at the time.  Such has been the market.  I would also take issue with the emphasis on distribution only ETFs.  This could make you liable for income tax outside of a tax wrapper whereas you may be able to sell down an accumulation ETF and stay within your annual CGT allowance.  DYOR, not advice, etc.

Assuming using an ISA though this is not a problem? Or have so got the wrong end of the stick? You are taking about a General Investment Account. As you plan to buy and hold its not such a problem to use one? 

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Green Devil

Dont forget crypto. You can get decent yields on some investments that put your 6% to shame :Jumping:

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23rdian
2 minutes ago, Green Devil said:

Dont forget crypto. You can get decent yields on some investments that put your 6% to shame :Jumping:

Yep but I'm not sure I trust the companies involved at the moment. Do you use any of them yourselves? 

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Green Devil
5 minutes ago, 23rdian said:

Yep but I'm not sure I trust the companies involved at the moment. Do you use any of them yourselves? 

You can stake coins from your own wallet with no counterparty risk. ADA - 5%, DOT 12% for example.

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23rdian
2 minutes ago, Green Devil said:

You can stake coins from your own wallet with no counterparty risk. ADA - 5%, DOT 12% for example.

Is that using DeFi or similar? I did watch a video the other day but it went a bit over my head.

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Green Devil
4 minutes ago, 23rdian said:

Is that using DeFi or similar? I did watch a video the other day but it went a bit over my head.

No, just download a wallet, buy some coins and stake it in the wallet. The coin stay under the control of your keys all the time. ADA is probably the easiest to get started with. Or DOT can be staked on Kraken Exchange (KYC required) for 12%

Edited by Green Devil
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Frank Hovis

I think it's always been good practice to go for shares in companies which pay regular decent dividends because it enforces good financial discipline upon a company.

I have found growth stock shares - M&G Recovery fund for example - rather disappointing generally because the simplistic strategy is to buy stocks which have fallen a lot from previous highs on the basis that they will return to those highs.

It seems rather wooly thinking to me; like the home seller when prices are falling who won't reduce their asking price because "That's what it's worth."

No, the market gets to say what it's worth.  You don't.

In order to enforce this thinking, together with a reminder that there are no surefire winners, I still hold after thirty years my first ever share purchase, Eurotunnel shares, in the hope that if I live long enough I may see them return to the nominal price I paid.

It used to be a race between them returning to the nominal and the original 55 year concession expiring in 2042 but the concession has since been extended to 99 years and now runs untl 2086.

They're currently worth about 10% of what I paid but bizarrely have shot up in value this past year when people have been halted from travelling owing to lockdown.  Though actually when looking at the chart that's only because they fell off a cliff at the start of it and have since recovered.

 

Now if they can go up another tenfold I can finally have my money back.

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Harley
19 hours ago, 23rdian said:

Thanks for the replies so far folks. Is there any of the stuff in the second video that's available to us? I am starting to feel a bit hard done to being in the UK

This is my source for available ETFs, with tons of data, subscribed or not:

https://justetf.com/uk/

 

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Harley
19 hours ago, 23rdian said:

Assuming using an ISA though this is not a problem? Or have so got the wrong end of the stick? You are taking about a General Investment Account. As you plan to buy and hold its not such a problem to use one? 

Yes, outside of a tax wrapper which ISAs and SIPPs are. 

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Great Guy

One thing I've noticed about investing is that a lot of investors are drawn towards high risk stocks like oil exploration and mining (basically gambling). I think there is fairly clear evidence that defensive stocks are better long term investments.. I prefer investing in defensive ftse 350 stocks :)

Some of the dividends at the moment look brill :)

anyone looked at M and G?

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aoxomoxoa
11 minutes ago, Great Guy said:

One thing I've noticed about investing is that a lot of investors are drawn towards high risk stocks like oil exploration and mining (basically gambling). I think there is fairly clear evidence that defensive stocks are better long term investments.. I prefer investing in defensive ftse 350 stocks :)

Some of the dividends at the moment look brill :)

anyone looked at M and G?

In today's world, do defensive stocks still exist? 

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Great Guy
2 minutes ago, aoxomoxoa said:

In today's world, do defensive stocks still exist? 

We're going to be using electricity and oil for decades....

Same with tobacco...

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goldbug9999
On 27/04/2021 at 22:38, 23rdian said:

tach a still from the above video and his entire portfolio is available for download from https://passiveincomeinvesting.ca/wp-content/uploads/2021/04/655K-Portfolio-April-2021.xlsx

Seem massively over diversified to me, do you really dozens of REITS managed funds and ETFs ? I would have though you could achieve a similar result with a tenth of that stuff without incurring significant extra risk or volatility.

Edited by goldbug9999
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goldbug9999
On 28/04/2021 at 19:15, Green Devil said:

You can stake coins from your own wallet with no counterparty risk. ADA - 5%, DOT 12% for example.

Yeah the only risk is holding those bullshit coins :D

In all seriousness though any yield on a crypto is a nice-to-have on top of a highly volatile and speculative play so not sure it really belongs in a discussion that is presumably about a stable passive income stream.

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Green Devil
2 hours ago, goldbug9999 said:

Yeah the only risk is holding those bullshit coins :D

In all seriousness though any yield on a crypto is a nice-to-have on top of a highly volatile and speculative play so not sure it really belongs in a discussion that is presumably about a stable passive income stream.

Have you looked at stocks recently? :Jumping:

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23rdian
Posted (edited)
5 hours ago, goldbug9999 said:

Yeah the only risk is holding those bullshit coins :D

In all seriousness though any yield on a crypto is a nice-to-have on top of a highly volatile and speculative play so not sure it really belongs in a discussion that is presumably about a stable passive income stream.

I think as long as you are aware of the risks it's good to be made aware of the whole field. If I am buying them anyway it's nice to know I may earn something off them at the same time.

I went a bit mad in the last couple of days. Bought AT&T, XOM, Intel and Pembina. Hopefully not too foolish being individual stocks but given that I still can't find much US stuff as above otherwise...

Almost bought O Realty - any thoughts on that one? Or UK alternatives?

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23rdian
Posted (edited)
23 hours ago, Great Guy said:

We're going to be using electricity and oil for decades....

Same with tobacco...

I can't yet bring myself to buy ciggie stocks but somehow think the cannabis industry is okayish?

Edited by 23rdian
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Great Guy
10 minutes ago, 23rdian said:

I can't yet bring myself to buy ciggie stocks but somehow think the cannabis industry is okayish?

Tobacco is the ultimate ethical stock... the product gives pleasure, makes people thinner and reduces the population....

BAT has a pe ratio of 10 and an 8% yield....

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23rdian
Posted (edited)
5 minutes ago, Great Guy said:

Tobacco is the ultimate ethical stock... the product gives pleasure, makes people thinner and reduces the population....

BAT has a pe ratio of 10 and an 8% yield....

I know about the latter part. Any business where you kill your customers and they come back for more despite having the product hid from them etc is doing something right.

Are they ethically any worse than the oilies I dunno?

Edited by 23rdian
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