Can we do an RDQ here? Shares and Dividends

I’ve dabbled in shares and have come to the conclusion that I’m bloody useless at it. I’ve made money but failed to get out and have ended up losing on most of my trades. Best leave it to the experts.

I used to have 30 to 40 holdings in my ISA which I bought and sold regularly as well as holdings in my SIPP. However over the past 5 years I have passed the management of these on to someone else because I no longer have the time to monitor and review properly and the figures were getting big enough to make me worry about making a major mistake.

I still have another SIPP and ISA that I dabble with just to keep my hand in but the figures aren't too big.

Investing for dividends has always been a reasonable policy but you will find that the value of the shares can still vary significantly. I held on to Standard Life and Vodafone for too long and whilst the dividend yield is still good, the value of the holdings has fallen significantly. I am just going to hang on to them and hope they improve because I am not prepared to realise the loss at the moment and I don't need the money from them.

Pork bellies and Orange Juice only.

This is not to be construed as investment advice but BAT operates in an industry that isn't popular with health officials around the world and it is one which has been shunned by millions across the world over the past 20+ years. Even BAT realise that it has to diversify to survive. Supermarkets all took a doing about 10 or 12 years ago and most haven't recovered. I can't remember why that happened (maybe reduced dividends following the 2019/20 crash) but I also held Sainsbury's back then and offloaded them to buy some bank stocks which after 10 years still haven't done anything exciting.

There are many places to get free information and ideas including model portfolios, such as Hargreaves Lansdown, ii (interactive investor) and AJ Bell

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I think at the time my late father bought them, tobacco was seen as highly profitable and it was before the sort-of backlash against tobacco companies started. It's only in the years since he passed that I gained online access (they are in a HL account) but I still struggle soemtimes with working out how you get a sale irrespective of share value.... seems you have to put in a value lower than current so that they sell at a minimum price, or else a value above surrent value where they sell the next day of they exceed that value. Terms like "fill or kill" are lost on me.

I've got a Vanguard Stocks and Shares ISA but generally leave them to get on with it. There's not a great deal of money in there anyway.

I guess the best result we've had was with some shares in a business held by my mum. In 1991, about a year before he died, a friend of my father persuaded him to invest £15,000 (15k x £1 shares) in a construction equipment company he and a few others were starting. Sadly, my dad passed away and the shares fell to my mum. The company did OK, sent her a bunch of flowers every year with the annual accounts, and even named their HO after my dad - but no dividends, ever. Every year I'd get a sad phone call from my mum saying that she was worried about these shares, she'd taken financial advice from accountants who basically said the shares were worthless and she'd never see any money from them, and that the company could trade every year and never have to pay out dividends to shareholders. From the accounts I could see the directors renumeration was pretty good though, but again, taking more advice from an accountant friend of mine, who looked at the accounts, it looked unlikely we'd never see anything - other than a potential inheritance tax problem when my mum died and someone came along and tried to put a valuation on her shareholding.

Years roll by and it's now 2008 and I'm looking at the accounts again, doing a few mental sums on what I though the shares were worth and came up with a figure. I got in touch with the company and spoke to the Company Secretary and asked if some of the other Directors were looking to increase their equity and make an offer. Anyway, a bit of back and forth and we settled on £20.80 per share. My mum got a nice cheque, I got a nice Omega, and about 9 months later the financial crisis hit..

Sorry - should have added some thoughts re the actual question of buying shares based on dividends.

In my S&S ISA i use an accumulation fund that automatically re-invests any dividends but if I was building my own portfolio then yes, dividend yield would be part of my thinking but given average yields across the wider markets I wouldnt necessarily priorise a dividend stock over something else.

That said, it also happens that some of the more historically 'good' yields come from pretty solid businesses that return positive annualised growth over the long run (folk like Microsoft, Johnson and Johnson, Coca-Cola, IBM, P&G) so you'd hope the underlying stake would grow as well and you are in a 'win-win' (over the long term i.e. 10+yrs)

However, when I hear folk talk about having a portfolio big enough to simply live off the dividends and let the rest grow I take it with a pinch of salt. Median dividend yield across the US S&P 500 is just shy of 3% (though currently well below this) the FTSE average a little higher I think.

So e.g. to take a £2k/month wage from a portfolio you'd need to have about 30k pre-tax profit - which equates to >800,000 pounds worth of investment which is likely to be out of reach for the vast majority

I have the complete opposite to the midas touch - I could invest in the world's very best cert and watch it go down overnight. Aside from my pension, the only 'investment' I have is a holiday apartment - I like the simplicity of - clean it, let it, get the money. Although being in Wales and battling against an anti-tourism government makes the returns less than they should be.

That's essentially what most peoples company pension pots are invested in so you're right to suggest that if they go tits up there will be a lot of people in a right mess.

I know someone who got burned by the stock market crash in 1987. After that he never invested in the market again but bought properties instead. He now has 15 properties he owns outright and they bring in a net income of over £50K a year as he looks to retire. He feels quite happy with his choice (although Govt have made owning rental properties a lot more difficult now with additional stamp duty, restricted evictions and rent rises) and intends to sell a property every few years to fund new cars, world travel etc. He also gets his State Pension shortly which will effectively replace the net rental income of 2 to 3 properties, so he is planning already.

I know someone else well in to his 70's who spends his time day trading and his computer emits alarms many times a day as stocks reach a predetermined buy or sell price. He drives a 911 GTS and goes away on expensive holidays so I suppose that shows there are many different approaches to retirement and risk and no one approach can be considered to be right for everyone.

I'll start this off with allegedly. Allegedly the GRG scandal was as big as the Post Office scandal and its impact on innocent people was just as life changing but unfortunately it was never properly exposed for what it was - possibly because the Govt were by that time the owners of RBS and would no doubt have to pick up the cost. Allegedly to deliberately undervalue assets and then abuse their position to call in the loans and repossess properties was criminal. I even heard of surveyors who, allegedly, were told by the bank what value they wanted on the property and these were the same surveyors who had valued the properties for the bank a year before at a massively higher figure. Allegedly the bank then sold the properties on at considerable profit. 

I know someone that fought them very hard and eventually kept his business but he would be told he had to pay a fee of, say £5,000 within 2 days, to stop them calling in his loans for 30 days even when they knew he was on the brink of obtaining the funds to pay them off. I think he ended up paying about £20K in what he called extortion fees.

Whenever you see "Government would have to pick up the cost" - they don't, the tax payer does. The MPs don't put their money at risk with the bad decisions they make, it's generally Joe Public who pays up though their taxes. It's also a shame that local authority staff are not held financially accountable - e.g. Woking BC who are effectively bankrupt having poured a huge amount of council tax payers money into allegedly dodgy property schemes connected with the town centre redevelopment. Aslo, how is it that some Local Authority Heads award themselves (through voting, no doubt) a salary higher than the Prime Minister's ?