Investment Trust Dividends

The Snowball

The rules for the plan, there are only two.

  1. To own a portfolio of Investment Trusts that pay a dividend to buy more Investment Trusts that pay a dividend.
  2. Any Trust that drastically changes its dividend policy must be sold even at a loss.

If u buy a Trust at one pound and it yields 8%, if nothing else changes

and the price of the Trust doubles, the buying yield remains at 8%

but the running yield falls to 4%.

If u then sell the Trust and reinvest in another Trust yielding 8%

your yield would be

Buy 1k of shares dividends £80

Sell shares after they double

2k dividends @ 8% £160

A yield of 16% on your initial investment, the Snowball effect.

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