menu

Portfolio Positioning For Brexit Vote

lse:vod
lse:bta
lse:hsba
lse:lloy

#201

Hi Again @J_Westlock, Just confirming the expected amount of the XD drop on my target ETFs due tomorrow. Found the yahoo historical data site useful in confirming the XD drop performance:-

https://finance.yahoo.com/quote/IUKD.L/history/

If you scroll down then the page highlights when a dividend was paid and how much. The difference between the stock prices on the two days around that would seem to give confirmation of what we are both anticapating, though of course both SPs are closing prices so its possible the SP also moved a fair bit during XD day.

ATB

Pref

PS Thinking I might just buy IUKD tomorrow now. Higher yield of over 6%. Price has dropped more than the rest (holding INTU & KIE the likely cause of that) and I probably have enough SEDY already, so another buy might be a bit too much. Expecting a 12p dividend drop (~2%) on IUKD. A single buy will save a bit on transaction costs as well.


#202

Yes, those charts do make it quite clear on Yahoo Finance.

Just out of interest, does it make any difference to you knowing that? ie. the XD drop.

I know it happens but it’s not something I’ve concerned myself much over… maybe incorrectly.


#203

Hi Again @J_Westlock, I am in the habit of buying investments on the XD date because then you buy at the XD price and you can obtain more stocks for the same amount. Also quite often stocks dip by a bit more than the dividend amount on XD date, yielding a further advantage. Of course sometimes it works the other way.

I started doing this when dealing in preference shares which have quite large spreads. So take LLPC today its 138.9 to buy and 136.5 to sell. Dividend is always 4.625p. Typically you would find that on XD day the stock would drop by approximately 4.625 pence (sometimes a bit more sometimes a bit less) allowing you to buy quite a few more shares. In a couple of weeks the price had typically recovered to where it was before XD. So you bought at a cheaper price which enabled you to buy more shares (but in theory missed the dividend) but then made the dividend amount anyway because the share price recovered. Win Win !.

Thats why I do it.

ATB

Pref


#204

Hi. Yes, I understand the mechanism around XD date. I’m not convinced that stocks (inc/ ETFs) drop by more (or less) than the divi amount… if they did then there would be automated arbitrage trading strategies quickly removing any such differences. Difficult to isolate price movement to one factor however.
I don’t really see any advantage in buying on XD date tbh… there will be other factors that dictate that but tax clearly needs to be taken into account and can see why there might be an advantage in your method regarding that.


#205

Hi @soi,

Did a quick review of the REITs that I used to hold or follow this morning, results as follows:-

AEWU down to 92.4 from 95+
BLND down to 560 from 625+ pre October
CREI down to 115 from 120
FCRE down to 82.2 from 87.5 (95+ a while before that)
HMSO down to 361 from 450+
LAND down to 832 from 900+ pre October
NRR down to 219.5 from 260+
PCA down to 290 from 310+
RGL down to 93.5 from 100+
WHR down to 94.4 from 97+

So some far worse than others admittedly, but some down quite substantially. I suspect due to a combination of fears over commercial retail property pricing and general brexit related property pricing ?. If property prices do drop significantly then these companies are going to be left in negative equity aren’t they ?. DYOR etc.

Anyway not sorry I sold mine…

Bought some prefs btw not an easy buy for me. But nowhere near as many as I had before and only those priced around 115ish just in case prices drop more if rates rise. Also redemption at par much less of a threat at these levels.

ATB

Pref


#206

Hi All,

Well after last weeks political events I had convinced myself that a no deal brexit was off the table and that the worst we could look forward to was some kind of softer brexit or a second referendum (with remain a possible outcome). I therefore felt it shoukd be safe to renter the market given that the one big really damaging scenario was off the table.

Well that might be partly true, but even if it is true events in the US Markets plus Brexit seem to have us firmly headed in a downward direction, I am now starting to think that we are embarking on perhaps another 10% leg down to around FTSE 100 6000. That being the case pretty well all stocks, but especially financials, I suspect may drop by another 10-20% enroute to this level ?. I am therefore once again considering selling a few things to buyback later. Sold half of my recently purchased AV and LGEN today, figured I might get another 10-15p off if I’m lucky. DYOR etc.

ATB

Pref


#207

VIX up 13% today, China slowdown, US slowdown, be careful.
You’d need a crystal ball to know if it’s a genuine downturn on its way. Brexit isn’t the reason for today’s drop imop.


#208

Hi @Swamp_Cat, Well indeed lots of reasons for extreme uncertainty causing markets to drop. US rate rise later in the week another likely negative event for US markets in the current climate I suspect. Very glad I have zero exposure to the hideously volatile US markets !. It may well be a gap in my diversity profile but it’s one I’m comfortable with.

I am very conscious of taking a gamble with my AV and LGEN holdings, but it’s not a significant one in financial terms. I resisted the thought of selling my UK based ETFs as well. These 2 stocks like LLOY are particularly brexit sensitive I think, both were down 2.25% yesterday - worse than that at one point. Am going to keep a close eye on them, if I need to buyback because they start recovering then I will.

LLOY in the 51s now I note, as I recall it got down to 47.x after the 2016 referendum. Wouldn’t be surprised to see it back in the 40s. Not that I’m interested in buying I’m not.

ATB

Pref


#209

Hi All,

Well utilities getting hammered today NG down 6.x%, SSE & SVT 2%, UU 1%, CNA 0.9%. Not sure what the cause of the big drop in NG is, unless its the Corbyn threat given the start of his campaign for a GE ?. Housebuilders having a good day for a change, that has helped my IUKD to a small positive figure today. My AV & LGEN play isnt working out so far, but its early days, I suspect there is more downside to come…?

So far my “savings” from having sold stocks has amounted to a total of close to a quite scary ~£15,000. Of course having invested that money in others things (mainly ETFs) that have themselves then lost money I reckon I am just under £9,000 ahead of where I would have been had I just “sat on my hands”. But I am very happy with that.

My ETFs are performing better than single stocks as we go down, they often tend to drop by approximately the FTSE 100 change on the day whereas single stocks typically drop more - sometimes a lot more. Same effect works the other way around too though I have noticed when we have had up days. Single stocks tend to rise more than the index.

ATB

Pref


#210

Hi All,

Anyone know whats going on with the likes of VUSA, SMT, PCT & JUSC today price wise ?. US markets are UP quite a bit (sort of 0.8%+) but all of these ETFs and Trusts are all DOWN over 1.5%. Normally that means that the GBP is way up against the USD, but thats not the case today. Not planning to invest in any of them but would like to understand whats going on there.

TIA

Pref


#211

Hi Pref,

You remind me of someone I worked for many years ago - he would set us off on a project, which would involve a considerable amount of data collection and analysis, only to divert our resources to something completely different a short while later.

There were many partially completed projects, several of which were completely abandoned, but occasionally, he would say “Do you remember the project you were working on a few weeks ago - do you still have the data? Can we take another look at it etc. etc…”!!!

As a result, in the three and a half years I worked in that Head Office function, we had very little positive impact on the business.

Thankfully, other people I have worked for/with, have had a very clear medium/long term plan, and managed to really focus on achieving challenging but realistic objectives.

When my wife and I were left our initial batch of HSBC shares, we had a twenty year plan.

When the 2008 financial crisis hit, and the subsequent 2009 Rights Issue was announced, we adjusted that plan, and set “new” long-term goals.

By the time the 2018 full year results are announced in February next year, eighteen of the original twenty years will have passed, and there is a possibility that by the end of next year, we will achieve our revised goals, so we will review again then.

With very few (full) trading days left this year, I expect to be showing a “paper” loss for the year - which is likely to be very similar to the “paper” gain for last year, but am hopeful for better things next year - both in terms of the share price and improved (sterling) dividend.

We will be really pleased if our combined savings and investment income exceeds this year’s total - which is more than we have previously received.

During the first quarter next year, most of the banking sector and several insurers announce their annual results for 2018.

I expect there is good long-term potential for many of these, but having decided not to invest in Lloyds last year, we placed that money elsewhere, and have no intention of moving it until late September next year.

Although there are bargains to be had, and a certain amount of money can be saved, we do not keep “chopping and changing” our banks, building societies, energy , internet, landline and mobile phone providers, insurers, etc., but we do sometimes wish some of these companies would offer loyalty bonuses - not just special deals for"new" customers!!!

All the best with your investments. be it short, medium or long term.

Regards,

Steve


#212

A couple of things that may be relevant. Firstly J&J got whacked badly, yesterday. Also GS was down too. Bearing in mind you are holding ETFs it is likely that you will have some exposure.

Be aware that tomorrow 7pm GMT is FOMC minutes. that has the potential (like Non farms) to cause a lot of volatility. Just something people often overlook).

Well done otherwise.


#213

Well @StevesShares

Another post from you full of thinly veiled criticism. I have come to expect nothing different.

From your posts your approach would seem to be to hold your HSBA shares forever accumulating only via scrip by the sound of it. Good luck with that in this time of falling markets, your paper losses in the last year investing in HSBA are likely even greater than mine. My recent investing initiatives, which clearly you regard as ill conceived, have in my view been very successful in minimising my losses and in preparing for a recovery. But it would seem that you are pathologically opposed to all forms of trading, even when it is successful. But there is no one right answer when it comes to investing, there are many different ways to make money. I wish you all the best with your strategy.

We too rarely change the banks and building societies that we use, as there is little advantage to be gained in doing so. But when it comes to gas/electric, broadband, TV, mobile phone contracts and insurance there are significant advantages to be gained in being a “serial switcher”. You obviously never watch the Martin Lewis money programme. I never renew my contracts for any of these kind of services without looking around for the best deal. Staying with the same supplier long term in these sectors commonly attracts an often significant price premium. I recently saved many hundreds of pounds a year by ringing up and threatening to leave my current TV and internet providers, securing a new 18 month contract for both at significantly lower prices. As someone who claims to be careful managing their money I am surprised that you are clearly not up to speed with this tactic.

Oh and by the way my solar panels are due to be installed early in January, another project that you dismissed in a previous conversation due to the expected payback time. Well when energy prices rise significantly in the next few years as I personally expect (note the wholesale electricity price agreed by the government for the electricity from the Sizewell and Hinckley Point C nuclear power stations when they come on stream) then the situation may look very different. I look forward to my smaller energy bills and annual RPI increasing feed in tariff payments.

So as usual Steve it would seem that we hold diametrically opposing views on almost everything. I am guessing you probably voted leave in the brexit referendum as well……

Merry Christmas

Pref


#214

Hi Pref,

As previously mentioned, the main reason for us continuing to hold HSBC shares is to provide additional income in retirement.

By taking scrips, when appropriate, we increase the number of shares held, and as long as dividends are maintained at least at the current level, then the dividend income will also grow.

Unless our circumstances change significantly, we are unlikely to sell these shares for many years, but fairly soon expect to take a bigger slice of the dividend in cash, and eventually stop taking any scrips.

If the price is relatively low around the time the scrip price is fixed, then that means more “new” shares are available for the same amount of dividend - just like when you buy shares immediately after going ex-dividend. That approach certainly makes sense to me, because if you have a fixed amount you wish to invest, then you obtain more shares, and although you miss out on the dividend you could have received by buying earlier, all subsequent dividends will be that much more.

The HSBC scrip price is based on the average of the closing prices for the first five trading days once the shares go ex-dividend.

I am certainly not opposed to trading, and I would agree that there are many different ways of making money - I “dabble” in certain (vintage) collectibles, and sometimes the mark-up on those is very good in a very short time-frame.

I have watched several of Martin Lewis’s programmes, and there have quite often been some useful hints and tips, but if I was to save many hundreds of pounds a year in respect of my TV and Internet services, then they would be paying me!!!

Solar panels do indeed save money on fuel bills, but there is still quite a long pay-back period to cover both the amount of capital invested and the likely returns one could achieve by investing it elsewhere.

I did indeed vote leave in the Brexit referendum, and would do so again if there was another similar referendum.

Everyone is entitled to their views on a whole range of subjects, and of course people have different investment strategies, depending on age, retirement planning, and whether seeking improved income or capital growth is most important - ideally we would like to see both, and may well do so again in the medium to long-term.

It will be interesting to see what happens to global markets next year.

Seasons greetings,

Steve


#215

Hi Pref

You played the Portfolio Positioning game superbly.
That is obvious.

I am more in to trading than long term investments although do both.

I did reduce some share holdings but held on to others.
Wrong on a few holdings. My REITS are down. Wrong but can live with that.

You have done better than me with share holding positions.

Well Done, am happy for you and also impressed.

Genuine.

ATB

soi


#216

Hi @soi, Thanks for that. I am pretty happy with the outcome but could have done better with some of my buys, but I guess you could probably always say that. If you always try to hold out for the very best deal then you run the risk of completely missing out on the opportunity.

Markets up today and US open looking positive. Belated Santa rally maybe as no brexit action now till the New Year…?. I guess the FED rate decision might come along and spoil the party however.

Anyway thanks again for the support.

ATB

Pref


#217

Blunt question, excluding dividends, what is your % performance over the last 20year? i.e. How much are you up by?


#218

Hi macbonzo,

That is indeed a blunt question, and perhaps a little unfair to exclude dividends as the re-investment of some of the dividend income has played an important part in where we are at today, and hopefully will prove even more beneficial as we move forward.

Twenty years ago, we didn’t own any shares, but in early 2001 we received a specific quantity of HSBC shares which were left to us by a non-family member who died the previous year.

The shares were obviously allocated to us at the market rate at the date of death, which is considerably higher than the current price!

We did however, sell about 20% of the shares very early on, for an even better price.

The total dividends declared for 2007 was 90c per share, then came the 2008 financial crisis, and a Rights Issue in 2009 which we took full advantage of at £2-54 (US $ 3-61) per share.

Although the dividends were reduced to 34c in 2009, HSBC (unlike several other banks) continued to pay dividends each year, which were gradually increased until 2015, after which they have been held flat at 51c per annum.

By taking full advantage of the Rights Issue, and opting for scrips when appropriate, the cost per share has “averaged down” to very close to the current market value, and over the years we have also taken a reasonable amount of the dividend in cash.

Hopefully, by the time we have held the shares for twenty years, we will see some real improvement in the share price, and even higher dividend income, but it may well take a long while to exceed the levels prior to the Rights Issue.

Regards,

Steve


#219

Hi Steve,

Thanks for being completely honest. The question was very blunt! The first thing is - you actually have a plan, which puts you ahead of most people.

As a general rule, I would expect an investment to double every decade. Obviously you inherited the shares in 2001, then, you had the financial crisis in 2008. At any point did you think of altering your approach, maybe seeking a financial advisor or wealth management specialist. What slightly concerns me, is that, this 10 year bull market, looks to me as though it has run it’s course. Statistically, a bear market last 18months to 2 years. Hence another 2 years could mean you have less than you have now.

Have you ever considered looking at the Rothschild Investment Trust (RCP). It’s performance has been stellar for the last 20 years, furthermore, it is globally diversified with listed and non listed companies. Alternatively the Edinburgh Investment Trust as done well and pays a decent dividend.

Either way, good luck.


#220

Sorry @StevesShares but I cant resist commenting on this performance. You have said:-

Now I dont know if thats what you really meant to say, but if it IS and the cost of your shares is about the same as the current market value then that means that you have made ZERO in capital gains on these shares including any/or scrip dividends that you have made in all of ther 20 years that you have held them. If true that is a very poor performance one might hope at the very least for the capital to have increased by inflation. I dont know what you had on your “strategic plan” 20 years ago but I am sure it would have been for something a lot better than that. You have had some income a well you said which also needs to be factored in - but all in all very poor. Obviously you were given the shares to start with so that was a gain - but sounds like that was about it.

In fact it is SO bad that I cant believe it really. You must have meant something else.

Just for comparison here is a table summarising my capital gains/losses since 2012, when I restarted investing in the market having retired hurt after 2008:-

image

Thats with ALL dividends re-invested. Over the years I made a number of capital deposits and withdrawals but these are fully accounted for in these figures and the gains/losses exclude the effect of any deposits or withdrawals made. 2012 was a truly bumper year when pref prices just exploded. Thereafter it was not hard to make 8-10% a year at least with investments that paid a 6-7% yield in half yearly increments and prices that only moved upwards the whole time. Those were the days !!.

Pref