My Portfolio: Dividends and Diversification


#1

I’ve removed the posts in this thread because I don’t want to influence anyone with my investing decisions. I was enjoying posting in the thread but best to air on the side of caution and just remove the content.


#2

Giving advice is alway risky, but I would advise not to focus on which companies to buy but rather what your strategy is and then pick companies/etf/etc that match that strategy.

If your goal is simply to accumulate a global portfolio over the years then 1 or 2 etf may be all you need, if your strategy is to mix bonds and equities then again companies/etf and so on that meet that - I persoanally think once you become fixated on a company it can lead you down the wrong path (but that is just my opinion).


(Vladislav Kozub) #3

May I ask what the rationale behind considering stocks in number of shares is? Did you not contemplate about allocating a certain percentage of the entire portfolio to stocks and then a certain percentage of that proportion to each of the ten companies or just 1/10 to each?

Seems like if you were to go for Barclays and British American Tobacco, one of the latter would cost as much as twenty of the former, this causing a huge proportionate disparity. But if you ever consider BRK.A, I’d be rather happy for you :grin:


(Chris) #8

I doubt anyone can really be surprised by the fact that Vodafone froze their dividend. Their debt pile and infrastructure costs are insane and they just cannot reinvest in the business.

As for the dividends on the UK market at the moment, yields are high but coverage is very low - I can only see a few companys that will be able to grow their dividends over the next decade - I suspect most will simply maintain them. Generally though, companies that generate lots of cash (FCF) and have consistently high ROCE are companies that will pay good dividends.


(Chris) #10

Sorry poor wording on my part, they’ve frozen the dividend at its current rate. Undoubtedly it will bounce back. My worry with Vodafone is the cost of running their Egypt & Indian businesses are huge and they will have to invest huge amounts of capital in 5G across Europe over the next couple of years, I can’t see how they finance that without going back to the capital markets. I think its safe as a long term investment unless their credit rating gets cut severely.

As for ITV, dividend cover is 1.29 by last results is not bad compared to the average FTSE 100 company but I’d be careful of saying they have enough cash. They have 2p of cash (in bank) per share at the moment so their cover comes from cash flow (which is kind of normal for UK companies). I don’t know enough about the TV business to effectively comment but if I was looking for dividend stock I wouldn’t look at highly cyclical businesses like ITV - I’d suggest looking at your consumer staples, energy & financials


#13

What is their dividend yield?


(R) #16

Thanks for the informative post. Coincidentally I was just looking at NEX out of curiosity as things had seemingly been going well. I just got to the front of the queue so I’ll be placing my first trades tomorrow. I am mainly looking for US companies though, so I’m excited for the launch of those companies to the feetrade universe.


(Chris) #18

Yup, loaded into this when I first opened my account. The Hang Seng has been rocketing in Q4 after a year of dismal performance and I find it hard to believe it can have another bad year. I’m ludicrously bullish on Asia & China and therefore overweight across my portfolio - side note, the manager of the ETF (HSBC) is up nearly 15% over the same period. Now that the ‘trade war’ is temporarily halted I think the Asia stocks will push on.

Good note on Vodafone too! I topped up my holding when the price dropped and its nice that its rebounded. Im still concerned about their dividend policy though, a slip in the global economy will but that dividend under pressure & if they cut it, it will take them years to regain that trust from the markets. However the CEO has said all of the right things about their debt pile and if they get through 2019 with their targets met then they are going to look a very good company indeed.

@PigeonStrangler I sense you’re into your divi’s so you might want to look at this fund from Templeton. Its over a 9% return and pays monthly. Normally I’d never recommend any active fund with such a high fee (TER is over 1.2%) but this fund has done remarkably well at preserving capital & giving a good income return. Their expenses are taken from the capital though (not the income) so this will impact capital growth.


(Chris) #20

This one?

I think the payout is only so high because its so heavily invested in Real Estate, which have been absolutely trashed this year. Forward yield is 7.51% too.

Love the idea of having some of these more specialised ETF’s on the platform though, generally cheaper than buying a market/sector.