I have cash to re-invest so this is my starting point. I will delete some of the shares for personal reasons, it’s always best to DYOR and not rely on other peoples opinions.
First I would delete any Trust I already own as I do not want to open a new position but I may add when the dividends are received.
VSL,NESF,FSFL,RECI,SUPR,AGR,PHP,ADIG
Trusts I don’t know enough about.
AA4, EJF
Trusts I wouldn’t buy, at this time.
GSF battery storage, NRR, Retail Parks, THRL Care Homes, VTAS Enough Loan Companies in the portfolio.
March was a strong month for investment firms in the logistics and healthcare properties space, as UK inflation worries subsided, according to the monthly winners and losers list from QuotedData.
Data last month had showed the UK consumer price inflation rate abated to 3.4% in February, from 4.2% in January, moving closer to the Bank of England’s 2% target.
“Green shoots have finally started to emerge in the UK property market with logistics and healthcare the two best performing subsectors in March,” QuotedData said.
It was also a strong month for investors in European small-caps, QuotedData noted, on the rising conviction that the European Central Bank will begin cutting rates soon.
“Traditionally, smaller companies are more rate sensitive than their mid and large cap peers as they tend to hold higher levels of debt, meaning any fall in interest rates is well received,” QuotedData added.
By median share price total return, European smaller companies investors were the fourth best performing sub-sector in March, below North America-focused firms, UK healthcare property and UK logistics property.
The following were the best and worst performing London-listed investment companies in March, excluding trusts with market capitalisations below GBP15 million:
Five best performing funds in NAV terms with % change:
Golden Prospect Precious Metals Ltd 16.1
Blackrock World Mining Trust PLC 13.3
Temple Bar Investment Trust PLC 9.5
Blackrock Energy & Resources Income Trust PLC 8.8
Manchester & London Investment Trust PLC 8.4
Five worst performing funds in NAV terms with % change:
I’ve sold the portfolio shares in AEI for an overall profit of £631.76.
I looked at the opening price where I could have sold at a slightly better price. No one pretends it’s easy.
The reason for selling, I didn’t want to lose the recently banked profits and the yield had fallen to 7.5% versus the higher yields in the Watch List. Also it gives me some cash if there are any ‘bargains’ in the market.
4 Things You Can Learn from Warren Buffett’s Investing Philosophy
Reuters
Warren Buffett’s unique qualities, including his long-term investment perspective, market detachment, and resilience to drawdowns, underpin his success.
While many investors get caught up in short-term market fluctuations, Buffett focuses on long-term profitability and doesn’t obsess over daily stock price swings.
Stock holding periods keep getting shorter every year and today’s investors can learn a thing or two from the legendary investor
Warren Buffett, often regarded as the greatest investor of all time, has not only endured the test of time but also consistently outperformed the
4 Things You Can Learn from Warren Buffett’s Investing Philosophy
Warren Buffett’s unique qualities, including his long-term investment perspective, market detachment, and resilience to drawdowns, underpin his success. While many investors get caught up in short-term market fluctuations, Buffett focuses on long-term profitability and doesn’t obsess over daily stock price swings. Stock holding periods keep getting shorter every year and today’s investors can learn a thing or two from the legendary investor Warren Buffett, often regarded as the greatest investor of all time, has not only endured the test of time but also consistently outperformed the markets throughout his remarkable career.
He’s a name that resonates in the world of investments, and for good reason. Many have attempted to replicate his success, but what sets Buffett apart are his unique qualities. Let’s delve into what makes him truly exceptional.
Market Detachment: Buffett Doesn’t Obsess Over Short-Term Fluctuations in Data or Markets At one of Berkshire Hathaway’s (NYSE:BRKb) numerous annual meetings, when asked how he evaluates specific market moments, Warren’s response was crystal clear.
He and his business partner, Charlie Munger, don’t base their investment decisions on macroeconomic factors, short-term predictions, or the day-to-day fluctuations of rates, inflation, or GDP.
Their philosophy revolves around investing in profitable businesses with strong long-term potential, not obsessing over stock prices that can swing wildly in the short term.
Now, ask yourself this: How often have you made investment decisions this year based on enticing forecasts about when the Fed will stop raising rates or how much earnings are projected to increase?
It’s safe to say that many investors have fallen into this trap.
An Unusually Long-Term Perspective Could you imagine holding a stock in your portfolio for 34 years, enduring the inevitable ups and downs along the way? Warren Buffett certainly can and has. His commitment to long-term investing is remarkable, making it a crucial aspect of his success.
Let’s take a closer look at these facets of Buffett’s investing philosophy. When you closely examine Warren Buffett’s holdings, such as Apple (NASDAQ:AAPL), which he has held in his portfolio since early 2016, you’ll notice that his investment horizon is notably longer than that of the average investor.
In today’s fast-paced financial world, the average holding period for many investors has dwindled to less than a year, in stark contrast to Warren’s enduring approach.
Resilience to Drawdowns Warren Buffett, at over 90 years old, has weathered a multitude of challenging market periods. The Bear Market ’73/74, the Dotcom bubble, the Subprime crisis, the Covid pandemic, just to name a few.
The worst period was probably the one related to the subprime crisis, with a drop of more than 30% in 2008, and a Maximum drawdown probably greater. Most investors exit the markets after a 5 or 10% drop, let alone a 35-40% drop.
The ability to withstand declines is a key characteristic of a good investor, and in his case, since the time horizon is as seen above, it is not surprising that while other investors panic, he is happy to buy at better prices.
Buying When There Is Blood in the Streets Without wishing to go too far back in time, how many of you (again, you don’t have to answer to me, but to yourselves) bought stocks or bonds in 2022 on falling markets?
And how many of you instead sold at a loss, worried that it could get even worse, of deed losing the recovery (not total but almost) of 2023?
Warren Buffett in each of his interviews always shows his preference in steeply falling markets, because that way you buy better (of course, carefully selected good businesses with correct horizons).
In fact, we can see that his cash holdings fell sharply in 2022 (markets fall he buys) and then rose again during 2023.
So the opposite of what investors normally do, which is to buy on the highs (when risk is higher and expected returns are poor) and sell on the lows (when the opposite occurs).
So again, no one I think will be able to replicate Warren Buffett, what we can do is to take a cue from his behaviours and try to make the most of them, with the humility of knowing that everyone is different, and no one like him
He’s a name that resonates in the world of investments, and for good reason
Many have attempted to replicate his success, but what sets Buffett apart are his unique qualities. Let’s delve into what makes him truly exceptional.
1. Market Detachment: Buffett Doesn’t Obsess Over Short-Term Fluctuations in Data or Markets
At one of Berkshire Hathaway’s (NYSE:BRKb) numerous annual meetings, when asked how he evaluates specific market moments, Warren’s response was crystal clear.
He and his business partner, Charlie Munger, don’t base their investment decisions on macroeconomic factors, short-term predictions, or the day-to-day fluctuations of rates, inflation, or GDP.
Their philosophy revolves around investing in profitable businesses with strong long-term potential, not obsessing over stock prices that can swing wildly in the short term.
Now, ask yourself this: How often have you made investment decisions this year based on enticing forecasts about when the Fed will stop raising rates or how much earnings are projected to increase?
It’s safe to say that many investors have fallen into this trap.
2. An Unusually Long-Term Perspective
Could you imagine holding a stock in your portfolio for 34 years, enduring the inevitable ups and downs along the way? Warren Buffett certainly can and has. His commitment to long-term investing is remarkable, making it a crucial aspect of his success.
Let’s take a closer look at these facets of Buffett’s investing philosophy.
When you closely examine Warren Buffett’s holdings, such as Apple (NASDAQ:AAPL), which he has held in his portfolio since early 2016, you’ll notice that his investment horizon is notably longer than that of the average investor.
In today’s fast-paced financial world, the average holding period for many investors has dwindled to less than a year, in stark contrast to Warren’s enduring approach.
The difference in why he makes money and others do not can largely be explained by comparing the graphs above.
3. Resilience to Drawdowns
Warren Buffett, at over 90 years old, has weathered a multitude of challenging market periods. The Bear Market ’73/74, the Dotcom bubble, the Subprime crisis, the Covid pandemic, just to name a few.
The worst period was probably the one related to the subprime crisis, with a drop of more than 30% in 2008, and a Maximum drawdown probably greater. Most investors exit the markets after a 5 or 10% drop, let alone a 35-40% drop.
The ability to withstand declines is a key characteristic of a good investor, and in his case, since the time horizon is as seen above, it is not surprising that while other investors panic, he is happy to buy at better prices.
4. Buying When There Is Blood in the Streets
Without wishing to go too far back in time, how many of you (again, you don’t have to answer to me, but to yourselves) bought stocks or bonds in 2022 on falling markets?
And how many of you instead sold at a loss, worried that it could get even worse, of deed losing the recovery (not total but almost) of 2023?
Warren Buffett in each of his interviews always shows his preference in steeply falling markets, because that way you buy better (of course, carefully selected good businesses with correct horizons).
In fact, looking at the image above, we can see that his cash holdings fell sharply in 2022 (markets fall he buys) and then rose again during 2023.
So the opposite of what investors normally do, which is to buy on the highs (when risk is higher and expected returns are poor) and sell on the lows (when the opposite occurs).
So again, no one I think will be able to replicate Warren Buffett, what we can do is to take a cue from his behaviours and try to make the most of them, with the humility of knowing that everyone is different, and no one like him.
The Efficient Market Hypothesis (EMH) has long been a cornerstone theory in understanding stock market behaviour. It posits that at any given moment, stock prices accurately reflect all available information about a company. This theory gained significant traction during the 1970s, buoyed by the rapid expansion of the Information Age, which revolutionized data storage and exchange.
In an era where even casual investors wield valuation tools that would have seemed like science fiction to traders of the past, one might assume that market efficiency has reached unprecedented levels. However, Warren Buffett challenges this notion, noting that the market is mostly efficient but not completely efficient.
Buffett contends that in some cases the market is far from efficient. Contrary to the belief that stock prices consistently reflect a company’s true value, Buffett argues that market inefficiencies are inherent. He asserts that stocks often become mispriced due to various factors.
Speaking at the 2012 Berkshire Hathaway Annual Meeting, Buffett referenced Benjamin Graham’s seminal work, “The Intelligent Investor.” In particular, he highlighted Chapter 8, which introduces the concept of “Mr. Market.” According to Graham, Mr. Market is an erratic and unpredictable figure, prone to irrational behaviour akin to a “psychotic drunk.” Buffett emphasizes that investors should view Mr. Market as a partner rather than an advisor, seizing opportunities when prices deviate from intrinsic value.
In essence, Buffett’s perspective underscores the importance of recognizing and capitalizing on market fluctuations, leveraging them to make sound investment decisions, especially when stocks in rare instances sell at “silly prices.”
U have been watching the SDV price fall, as the price falls the yield rises.
U decide to buy hoping for a Santa Rally, if u are wrong u could still collect the dividend. U are correct and as xmas is now over u decide to sell as u have collected the 3.15p dividend. Tks to Mr. Market as u search for your next dividend Trust, where the outcome may be the opposite.
Discount Watch This week’s Discount Watch sees 27 Investment Companies trading at 52-week high discounts. Eight less than last week. A sign things are looking up for the sector, or just a blip?
By Frank Buhagiar 08 Apr, 2024
We estimate there to be 27 investment companies whose discounts hit 12-month highs over the course of the week ended Friday 05 April 2024 – eight less than the previous week’s 35.discount watch pic 1 08.04.24Fair few 52-week highs were made on Tuesday 02 April 2024, a weak day all round for global markets following a sell-off in US Treasuries – strong economic data continues to weigh on the timing of those much-anticipated interest rate cuts. No surprise then that the interest-rate sensitive renewables remain the biggest contributors to the list with seven names, same number as last week. UK Equity Income funds held onto second place but only contributed four names compared to six previously.
The top-five discounters
Fund Discount Sector Gresham House Energy Storage GRID -72.19% Renewables LMS Capital LMS -67.30% Private Equity Life Science REIT LABS -53.99% Property Gore Street Energy Storage GSF -45.46% Renewables Downing Renewables & Infrastructure DORE -37.29% Renewables The full list
Fund Discount Sector Asia Dragon DGN -19.73% Asia Pacific Scottish Oriental Smallers Cos SST -18.17% Asia Smaller Cos NB Distressed Debt NBDD -23.19% Debt NB Global Income NBMI -26.52% Debt Real Estate Credit Investments RECI -21.22% Debt Jupiter Green JGC -30.65% Environmental RIT Capital Partners RCP -30.56% Flexible abrdn New India ANII -22.53% India JPMorgan India JII -20.78% India LMS Capital LMS -67.30% Private Equity Value and Indexed Property VIP -27.78% Property Develop North Prop DVNO -1.26% Property Life Science LABS -53.99% Property Gore Street Energy Storage GSF -45.46% Renewables Bluefield Solar Income BSIF -26.80% Renewables Downing Renewables & Infrastructure DORE -37.29% Renewables Foresight Solar Income FSFL -30.24% Renewables Greencoat Renewables GRP -24.43% Renewables Gresham House Energy Storage GRID -72.19% Renewables Octopus Renewables Infrastructure ORIT -33.36% Renewables Dunedin Income Growth (DIG) -12.88% UK Equity Inc Shires Income SHRS -15.03% UK Equity Inc Merchants MRCH -4.56% UK Equity Inc Schroder Income Growth SCP -14.80% UK Equity Inc Miton UK Microcap MINI -17.54% UK Microcap BlackRock Throgmorton THRG -10.52% UK Smallers Cos Henderson Smallers HSL -15.27% UK Smallers Cos
The Tip Sheet With interest rates expected to fall later in the year, The Times asks: is now a good time to look at the infrastructure sector? Elsewhere, will Schroder’s Real Estate Investment Trust’s green credentials be a deciding factor when sentiment turns?
By Frank Buhagiar
Questor: Buy this fund for at least 15 years of rising dividends BBGI Global Infrastructure (BBGI) as caught the eye of The Telegraph’s Questor Column, but why now? Share prices have tumbled in the infrastructure sector, triggered by rising interest rates which have made cash and bonds more appealing for income-focused investors. But with interest rates expected to come down later this year, Questor believes now could be a good time to take a look at the sector and specifically at BBGI which runs infrastructure assets such as toll bridges, roads, hospitals and prisons in G7 countries. And, it does it well – since launch in 2011, BBGI has generated a total return of 170.8%.
Questor is particularly drawn to BBGI’s shares because of the “attractive, government-backed 6pc yield and the potential for capital growth as they languish 13pc below the value of the fund’s assets”. And according to Questor, BBGI is “the least risky fund in its sector.” That’s because, unlike its peers, BBGI does not invest in economically exposed assets, such as water companies. Instead, its assets are 100% availability based so to get paid it just has to ensure the facilities it manages remain available for use. How much the fund earns therefore does not depend on how many people use the assets or what the regulator says it can charge. What’s more, revenues are inflation-linked and based on long-term contracts, giving the fund’s revenues a high level of visibility. Because of this, the company is able to claim that “without further acquisitions the current portfolio could increase dividends for the next 15 years before starting to wind down and repay capital to shareholders.”
In conclusion, Questor believes BBGI “offers the potential for strong share price recovery if interest rates fall and enhance the appeal of its payouts. This is a high quality, inflation-linked income fund that invests shareholder capital wisely.”
MIDAS SHARE TIPS: Property firm Schroder Real Estate Investment Trust building a green and clean empire According to The Mail on Sunday’s tipster, Schroder Real Estate Investment Trust’s (SREI) strong green credentials make the fund stand out from London’s REIT crowd. True, that’s not been enough to prevent the shares from being caught up in the sell-off that has hit the sector in recent years, but it could be enough to position the company well for when sentiment takes a turn for the better.
For management’s strategy to green the fund’s properties by, for example, making use of renewable energy and more efficient boilers makes sound business sense. Not just because regulations due to come into force by 2030 will require landlords to reduce their properties’ carbon footprint, but also because tenants, themselves under pressure to meet their own sustainability targets, are prepared to pay higher rents for buildings that are ‘green and clean’. What’s more, energy-efficient properties have cheaper running costs, thereby offsetting the higher rents charged. By seizing the bull by the horns SREI’s shares, now 42p, “should respond.”
And then there’s SREI the value play to consider. An independent valuation estimated the fund’s portfolio to be worth around £458 million, more than twice the current £200 million cap. As Midas concludes: “Schroder REIT has been hit hard by widespread antipathy towards the property sector but sentiment should change and Schroder shares should rally. At 42p, the stock is a buy, while generous dividends add to its appeal.”
The Results Round-Up – the week’s Investment Trust results Which fund has generated a 33% NAV total return since its December 2020 IPO? And which funds are gearing up to take advantage of compelling valuations? Find out in this week’s round-up.
By Frank Buhagiar
Fidelity Asian Values’ (FAS) contrarian approach
FAS reported a -2.4% NAV total return for the half year. That compares to the MSCI All Countries Asia ex Japan Small Cap Index’s +3.6% sterling return. According to the Portfolio Manager’s Review, it wasn’t stock selection that led to the shortfall: “Our stock selection continued to contribute positively to the Company’s relative performance.” Instead, “our market selection was a drag against a backdrop of continued divergence in country performance. Since our investment process can lead us to take contrarian positions in undervalued businesses, our combined exposure to China and Hong Kong was close to its historical high. China and Hong Kong continue to underperform and have dragged down the Company’s relative returns compared to the Index.”
The Portfolio Managers don’t appear overly concerned: “Although our value style has underperformed the growth style in recent years, we believe this headwind should, at some point, become a tailwind. Small cap value stocks are currently trading at close to all-time high discounts relative to both their large cap and their small cap growth counterparts. Value stocks also generate superior earnings growth over time compared to growth stocks and provide better cash returns, in terms of dividends.”
Winterflood: “Share price TR -2.5% as discount widened slightly from 5.3% to 5.7%”.
Scottish Oriental Smaller Companies Trust’s (SST) managers are excited
SST comfortably outperformed over the half year – NAV per share increased 8.3% compared to a 6.8% rise for the MSCI AC Asia ex Japan Small Cap Index. And it sounds like the investment managers are expecting more of the same: “We are excited about the portfolio’s prospects, given the solid balance sheets of the portfolio’s holdings, their strong growth potential and attractive valuations.”
Winterflood: “Key contributing geographies were India and Taiwan, while Indonesia and Hong Kong detracted. The managers expect portfolio companies to emerge with increased market share once the operating environment improves.”
Global Opportunities (GOT) primed for the great unwind
GOT reported that its 1.7% NAV increase for the year failed to keep pace with the 15.7% generated by FTSE All-World Total Return Index. Thing is, the FTSE All-World Index is not GOT’s benchmark. In fact, GOT hasn’t GOT a benchmark at all. According to Chairman Cahal Dowds: “The Company has no stated benchmark against which it seeks to outperform. Its objective is to achieve real long-term total return through investing in undervalued global securities.” But as Executive Director Dr Sandy Nairn explains, “as the year progressed, markets took the view that falling inflation would lead to interest rate declines and that the equity party could recommence”. GOT is having none of it though “We do not subscribe to the view that the post ‘Global Financial Crisis’ world can be recreated.”
“The fiscal arithmetic is such that limits on the extent to which governments can sustain growth are now very real. Indeed, history suggests that fiscal retrenchment will be required at some point soon. Rather than a rosy economic environment ahead, the storm clouds look to be gathering.The portfolio remains positioned to take advantage of the ‘great unwind’ when it comes whilst both protecting investors and providing some upside at the same time. It is a difficult period since patience is one of the hardest virtues to sustain. However, in our view the evidence is still overwhelming that great caution is required.”
JPMorgan: “The poor relative NAV performance vs the equity market of 2023 should probably be viewed alongside the strong relative performance GOT delivered in 2022. A large holding in cash in both years will have been a factor, holding back returns in 2023 and insulating the portfolio from the decline in markets in 2022.”
Downing Renewables & Infrastructure (DORE) up a third
DORE posted a 3.5% NAV total return for the year. That brings the NAV total return since IPO in December 2020 up to 33%. Chairman Hugh Little “is pleased that during the period DORE continued to build significantly on its key objective of diversification by geography, technology, revenue, and project stage, namely through its investments in electricity grids and grid stability infrastructure projects in Sweden and the UK, and with the Company’s first Icelandic hydropower acquisition.” The investment manager meanwhile homed in on profitability, “the underlying portfolio has enjoyed a 26% jump in operating profit compared to the previous year.”
Liberum: “NAV growth levers are limited, in our view, and the yield is relatively unattractive, reducing total return potential.”
Winterflood: sees “an attractive entry point, with the fund screening cheap at a discount of 36% vs the peer average of 29%. We reiterate DORE in our recommendations list.”
Impax Environmental Markets (IEM), gearing up
IEM reported a 4.5% NAV total return for the year, which Portfolio manager Jon Forster believes validates the fund’s investment thesis: “IEM is founded on the belief that amid rising environmental challenges, companies enabling the cleaner and more efficient delivery of basic needs – such as power, water and food, or mitigating environmental risks like pollution, and climate change – will grow earnings faster than the global economy over the long term. This basic investment thesis remains firmly intact.”
The portfolio manager goes on to point out that “Compelling valuations were a key driver in the decision to refinance and increase gearing, with the upside potential more than sufficient to compensate for an increase in the overall cost of debt. Looking forward, we remain positive, based on the more favourable market outlook for mid and small caps, the strong long-term drivers of Environmental Markets and the attractive portfolio valuation.”
Numis: “The results highlight a period of relative underperformance for Impax Environmental versus the MSCI AC World index, although we caveat that the majority of the underperformance came from not holding the Magnificent Seven – given that a minimum 50% of revenues need to be derived from environmental sectors. We believe that following a period of underperformance it can be an interesting time to invest in a manager with a strong longer-term record and a clearly defined approach that has been out of favour, particularly as the shares have suffered a derating.”
JPMorgan: “We think a turnaround in relative NAV performance is required for an improvement to the rating in the near term but as a package we also think IEM remains a high-quality fund which is a good option for investors seeking exposure to environmental themes in equity markets.”
Mercantile (MRC) gears up too
MRC’s Portfolio’s Managers may well believe this has been a testing year for the UK market but you wouldn’t know it going by the fund’s full-year performance – NAV total return came in at +4.5% (debt at par value) compared to the benchmark’s +1.8%. One year’s outperformance does not maketh a summer, but perhaps 10 years does – over the 10 years ended 31 January 2024, MRC’s average annualised return stands at +6.1% per annum on a net asset total return par value basis. The benchmark’s average annual return is +4.5%.
If the fund’s gearing levels are anything to go by, the portfolio managers are confident for the future: “Despite the UK market trading at a steep discount to both its own history and relative to other developed markets portfolio companies have, for the most part, been performing well at an operational level. Notwithstanding the obvious geopolitical risks that surround us, we are excited by the investment opportunities that this combination of low valuations, improving economic indicators, and strong performing portfolio companies yields.” All of which helps explain, “our elevated level of gearing, which at the date of this report is approximately 15%. This is the highest level of gearing that we have applied in over a decade, which hopefully demonstrates most clearly our assessment of the opportunity before us.”
Numis: “Mercantile (£1.7bn market cap) is the largest fund within its peer group, focussed on UK mid/small cap companies, and benefits from a low fee structure. The fund has a strong track record, outperforming its benchmark over one, three, five and ten years and we believe that Mercantile is an attractive core holding for investors seeking exposure to this sector.”
My 5 steps to achieving a passive income with the FTSE 100
I believe that creating a passive income stream through investing can be a smart way to build wealth over time. Here’s my five-step guide that helped me achieve this goal.
Understand the basics of the Footsie and stock market investing Gaining a basic understanding of the FTSE 100 and stock market mechanics is key before investing. The Footsie includes 100 major companies on the London Stock Exchange, some offering dividends from profits. It’s vital to keep abreast of each stock’s fundamentals and dividend schedules for potential yield and growth.
Open a tax-efficient investment account In the UK, I’ve found that a Stocks and Shares Individual Savings Account (ISA) is a great vehicle for tax-efficient investing. Any gains made within an ISA, including dividends, are not subject to tax. This means I can reinvest my full dividend earnings, enhancing the potential for compound growth. It’s important to understand the annual limits and rules for ISAs to make the most of this tax advantage. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future.
The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Start by investing in high-dividend yield stocks I begin by investing in companies within the FTSE 100 that have a history of paying high dividends. I research companies that have consistently paid and increased their dividends over the years. This consistency is key to creating a reliable second income stream. Remember, investing in a diverse range of sectors can help mitigate risks.
Some of the top dividend payers in the Footsie that I’m active with include:
Shell: Shell is known for its consistent and high dividend payouts. British American Tobacco: this multinational tobacco company has a long history of paying substantial dividends to its shareholders. GSK: GSK has been a reliable payer of dividends, thanks to its strong pharmaceutical and consumer health business. HSBC Holdings: HSBC is known for its significant dividend payments. BP: another major player in the energy sector, BP has historically provided high dividend yields. AstraZeneca: a global, science-led biopharmaceutical business that has been consistently paying dividends.
I reinvest my dividends for compound growth The power of compounding cannot be overstated. Instead of spending the dividends I receive, I reinvest them to purchase more shares. This increases the number of shares I own, potentially increasing my future dividend income. Over time, this reinvestment strategy can lead to exponential growth in my investment portfolio and, consequently, my passive income.
I monitor and adjust my portfolio regularly Investing is not a ‘set and forget’ process. I regularly review my portfolio to ensure it aligns with my income goals and risk tolerance. I’m aware of market changes, and I consider rebalancing my portfolio if certain stocks or sectors become too dominant. This will help in managing risk and keeping my investment strategy on track.
From small streams, mighty rivers do flow By following these steps, I have worked towards building a stream of passive income that can support my financial goals, whether it’s for retirement, additional income, or fulfilling other personal aspirations.
