The trouble with my recent inheritance is a) I still haven’t been given control of the stocks in it by the executors and b) it is a buy and holder’s portfolio full of the likes of CNA, SSE, NG - all of which needed to be sold by the executors as soon as they had control, but haven’t been. Also PSN, BDEV, and other builders, which should have been sold at the end of the cycle.
40% IHT was paid on all these at their value well over a year ago. TCG has been particularly painful. Buy and hold forever worked very well for my dad over 35 years or so, but mostly on the giveaway privatisations. Unfortunately, he didn’t think ahead to IHT, or possibly wasn’t really bothered. As he said, “it wont be my problem”, when I tried to give him sound investment advice about not keeping all his savings in a volatile stock market despite being over 80. He said the same past 90 too. His cash though, so what can you do?
The profit figures I stated can be misleading. E.g. I built my housing position in RDW, PSN, BDEV between 2010 and 2012 ready for the next cycle. I take profits as they become available. You never know, E.g. some idiot might call a referendum on the Eu and slaughter the housing market just when you think your sitting pretty.
So in the example above where all 3 will tend to move pretty much together with the sector, I would take back 100% once seen in BDEV. If you think about it that has halved potential returns in that stock already, so its debatable if it is a good move but it is the disciplined move.
Then, if I remember correctly, RDW were taken-over, so I took the offer price (as opposed to waiting 6 months for it all to go through) which was around 166% profit from memory.
Next tranche sold was BDEV for around 250%. I always hold PSN longer because they pay divis earlier in the cycle and at a greater yield throughout the cycle.
I think I sold another tranche of BDEV @350% and the final one at 450%
PSN was then sold as the market was still rising with the first sale probably around 400%. I’m not sure, but it was all posted live at the time and RDW T/O complicated matters. I can easily check on my final PSN sales because they are is posted elsewhere (not just on the old iii boards). I include this because anyone can talk about multi-baggers but its pretty meaningless if you din’t post your original purchases ‘live’.
“Post by Eadwig on 5 Oct 2017 at 14:51
Sold half my remaining PSN holding @2699p today. Approx 780% profit inc. divs over 6-7 years. Will buy back in my ISA when the big correction finally arrives …” [still waiting for that]
Post by Eadwig on 24 May 2018 at 12:11
Sold the remainder of my PSN this morning for just over @2800p. I built up this holding in 2010/11 at an average of @407p.
Averaging UP on this holding, something I am usually loathe to do, was possibly the best investment decision I ever made.
Of this last tranche I received @610p per share in dividends (so total 3410pps return or approx 833% over 7 years), and if I’d waited another three weeks there is another @110p due per share. That same payment is also timetabled for 2019, 2020 and 2021 (plus interim divs which were @125pps this year, up from 25pps last year). "
There you are you see, we’re polar opposites as investors. The profits taken over a total of 4 tax years illustrated in the housebuilder example above are taken from my account (as will ALL profits) at the end of each tax year. That is pretty much what I live on these days.
Dividends (there aren’t many usually given my preferred investments) are taken at the end of each month as pocket money.
A little dig there for some reason. I’m 25% down in VOD but it is only in my SIPP which is pretty irrelevant. If I lose everything in my SIPP it doesn’t really matter, its about worthless so I will either double/quadruple it in very quick time or lose it. The irony is VOD was the steady dividend paying base, supposedly, and once again I’ve been let down by same.
I’ve been retired over 20 years now and done very well without a pension - if such a thing still exists when I get to that age all well and good, but I’m not in anyway reliant on it.
8% p.a. is fine if you can live off 5% above inflation. I need my capital to work harder than that - that was the point of making it, so it could work for me rather than spend the best years of my life working.