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ds7971

Whats wrong with this as an investment strategy??

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Ok so lets assume you had a million pounds to invest (for arguments sake!)... what would be "bad" about the following strategy?  (I can think of a few things, but hey, NO strategy would be perfect as any investment is pretty unpredictable!)

 

There's a load of investment trusts with LONG dividend increase histories (eg City of London 50+ years, Bankers 50+ years etc), so why not just put say 250k in each of:

1) City of London (current yield 3.8%)

2) JPM Claverhouse (3.6%)

3) Murray (4.0%)

4) Merchants (5.1%)

 

Income from dividends = £41,250 a year (not guaranteed, BUT 34, 37, 43, 50 year dividend history).

 

Ok the value of your "capital" may go down...... and up..... and down.... and up..... but given those (or other) trusts' history, the dividend SHOULD be mantained or increased.

 

Discuss :)

 

Thanks :)

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My mother was looking a for a place to invest some money for income, so has done almost exactly that. The options appeared to be divide up the chunk of cash into 20 and spend that each year, or get roughly the same income and hopefully keep the bulk of the capital and not get too hammered by inflation by doing roughly what you propose. She just wanted an income so went with ITs, and those below seemed to have a good long history.

These are they, with rough allocations:

City of London [CTY] 10%
Dunedin Income Growth [DIG] 20%
Merchants Trust [MRCH] 20%
Murray Income Trust [MUT] 20%
Murray International [MYI] 20%
Temple Bar [TMPL] 10%

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On 31/07/2017 at 0:36 AM, ds7971 said:

Discuss :)

Fees nibbling away at your capital, especially if the capital isn't appreciating in real terms.

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