Wednesday, 30 October 2013

My Preciousss....The Attractiveness of Dividend Stocks

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Finding value...
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The DIY Income Investor portfolio includes dividend shares - specifically those with a high-yield - because I expect these to perform better over time, as an asset class, than other share types.

There is quite a lot of academic research supporting this belief - and Allianz Global Investors has provided some further more recent positive evidence supporting the attractiveness of dividend shares.

Tuesday, 29 October 2013

DIY 'Dogs' - and another Portfolio Sale!

Cesar and his dogs
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One of my favourite TV programmes is the Dog Whisperer. Mexican-born Cesar Milan takes unmanageable canines and reshapes their unacceptable behaviour - and, more importantly the behaviour of their owners. He roams the hills of California with a pack of dozens of 'problem' dogs that he is treating at his rehabilitation centre.

I always thought the DIY Income Investor portfolio was going to be a 'buy and hold' portfolio - sweeping up the share dividend and bond coupon shavings from the floor. But that's not how it has turned out - it looks like I am actually a kind of 'value' investor - but only selling my winners. And in the process I have gathered my own small pack of 'dogs'.

Sunday, 27 October 2013

Benchmarking - A U.S.View of Major Asset Class Returns

A UK Benchmark
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It is actually quite difficult to know how any investment style is performing because you have to decide what to compare it with - in other words, what your benchmark is.

I have discussed before the benchmarks I use for the DIY Income Investor portfolio - but these only relate to the performance of assets classes similar to those I invest in; so I might be missing something!

But here's some information I haven't seen presented before - a summary of the total returns of a wide range of asset classes. It's based on the point of view of a US investor (investing in Dollars) but interesting nevertheless.

Friday, 25 October 2013

HALP! (Portfolio Buy)

The interest-rate train IS coming...
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Having got over my reluctance to pay for yield, I've done it again.

I can't say that I'm particularly excited by my latest purchase for the DIY Income Investor portfolio - it's more of an income-oriented filler-inner. But when you have made a plan, you should stick to it - or come up with a better one.

My latest purchase gives me a yield on purchase of around 7.6% - hopefully for life.

Monday, 21 October 2013

Two-Years' Resolution (Portfolio Sale)

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Hmm...
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One of the reasons for writing this blog is to force myself to think a bit more before making investment decisions. After all, if I make bad decisions, they will be there for all the world to see.

The same thing is true about New Year Resolutions - if you don't make them public they are easy to forget. (I made some in January 2012 - but times have changed since then!)

But that's not the point. I'm selling a lot this year: that's not 'buy and hold' is it? Still, when the money's on the table, it takes a lot of willpower not to grab it - and, for better or worse, my willpower has limits.

Saturday, 19 October 2013

The 'Income Sandwich' Portfolio

Pret A Manger's Money Sandwich
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I am always looking for better ways to communicate the basics of the DIY Income Investor approach. My basic paradigm (I've been watching The Big Bang Theory) is the Income Pyramid, which covers most of the basics (i.e. no debt, good cash management, income-oriented investing), although this model perhaps implies too much rigidity in moving between the Pyramid levels.

But for the investment portfolio itself, a simpler image is perhaps the Income Sandwich. Here's how it works...

Tuesday, 15 October 2013

The Only Way Is ....Yorkshire (Portfolio Buy)

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I admit it - I'm running out of ideas.

Keeping my DIY Income Investor portfolio diversified means not putting too much in any single investment. I don't like to put more than about 5% of the portfolio in anything - in fact I have around 40 different holdings.

The search for sustainable high yield continues, most recently finding a new international Exchange Traded Fund. But finding something new that I don't already hold is proving difficult.

Saturday, 12 October 2013

A Yield Mirage? (Portfolio Buy)

It may not be what it seems...
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Just to show I am 'walking the walk' and not just 'talking the talk', the latest addition to my DIY Income Investor portfolio is another Exchange Traded Fund (ETF).

It meets the criteria of producing income and not being UK-based, increasing both the portfolio's geographical diversification ... and its passivity.

What makes this buy unusual (for an ETF) is the yield - currently 6.2%, according to Bloomberg (making it higher than my portfolio average of 5.5%): and my simple strategy for buying ETFs is to follow the highest yields in my chosen type of vehicle - those that produce income.

Thursday, 10 October 2013

Active or Passive?

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In the spectrum of private investors there are those that pick specific stocks - 'active' investors - and those that like to invest in funds that follow an index (such as the FTSE) - the 'passive' investors.

Warren Buffett, no less, thinks that most investors would be better off with an index fund as, left to themselves, they would generally make poor investment decisions. 

Being purely 'passive' doesn't suit some temperaments - certainly not mine! It feels too helpless. And it's no fun. However, much to my surprise, I am slowly becoming more 'passive'. Why?

Income Investing for Retirement




Here's a really interesting discussion on retirement investing from Morningstar. Advisor Harold Evensky and Vanguard's John Ameriks explore practical strategies to obtain income without overstretching for yield. Although it is targeted primarily for the US market there is a lot a UK investor can take away.

Take your time - the interview is quite long but contains a lot of useful and informed insights.

Monday, 7 October 2013

The Cheque's in the Post...

Have you seen Sid...err..Pat?
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It's always exciting to see the postman (and yes, it usually is a man) coming up the path to put something in my letter box.

Well, when I say 'exciting', I may be exaggerating a little. As I have opted out of most advertising mail. apart from the odd handful of flyer rubbish that the Post Office insists I continue to receive, the postie tends to put through paper copies of bills and bank statements.

But he (or his colleagues) also bring packages of wonder from the Internet...

Thursday, 3 October 2013

How to Make 50% Profit!

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How would you like a 50% profit, presented to you on a plate. All you have to do is log on and tick 'yes'.

Too good to be true? Well, no - it has actually happened to thousands of investors. But if you missed it, sorry!

Many a Slip...(Portfolio Sale: Vodafone)

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As the old English proverb goes: There's many a slip 'twixt cup and lip - or in the more modern idiom, 'it ain't over until the [large] lady sings'.

Well, in this case the lady in question would be Verizon Wireless; the cup more than half full is Vodafone Group (LSE:VOD).