Merchants Share Discussion Threads

[ctrader3] 16/8/2021 08:30

above is my current guild portfolio which is fairly recent.
the portfolio is 75% dividend and 25% TR.
the aim is to have fairly loosely a 75/25 split, depending
on the market, so anyone with a similar strategy would
have access to the tax free money without selling their
dividend shares.
current 25% shares are EAT and SVM, although at this
late stage of a bull run I am reluctant to go all in
to 25%.
hopefully the TR shares will ultimately provide surplus cash
to buy more dividend shares.
I wouldn't mind if the market falls as it would allow
me to invest the future dividends at a better rate and
maybe buyback MRCH which is number one on the subs bench.
the yielding shares are fairly low risk apart from
the loan companies but at the early stages of the
portfolio a risk I am willing to take.

[ctrader3] 15/8/2021 08:46

Portfolio weighting.

depends on your end game, could be a new car, holiday, a pension 'annuity'
where u get an enhanced payout and u keep your
cash and also the number of years u have to
achieve your target.
most probably reducing the risk in your portfolio
as u grow older, remember last year.

[ctrader3] 15/8/2021 08:19

the chart including dividends received but not re-invested in the share.




the chart if u had re-invested the dividends, the equivalent to holding MRCH
as an accumulation Unit Trust.

[zac0_4] 14/8/2021 22:43

Some useful information. Thanks. I hold Polar Capital Technology, but not in the Investment Trust version, the Fund version.

There's a lot to choose from out there and I'm trying to reduce my overall number of holdings. Currently I have 22. 1 multi-asset fund, 8 dividend paying holdings (individual shares and trusts)and 13 growth funds, some index some managed.

[tim 3] 14/8/2021 12:06

Thanks ct great food for thought as always.

I also lived through and came out unscathed from the tech bubble.

Even though I am believer in the saying nothing ever changes with the market and that "this time its different" is what idiots/newbie's believe with QE I am questioning whether the Feds actions have changed the market for ever.

If for some reason the fed does lose control things could get very ugly very quickly but could also provide graet opportunities.

[ctrader3] 14/8/2021 11:16

the other advantage IT's have over UT's is u can trade the discount,
if the discount is really wide the market is warning u that it's
dangerous, u could have bought property for fifty pence in the pound.
u can also trade the share, as with JLEN and sell when the premium
rises, whilst u wait the 6% yield would
offer some comfort.
Mr. Market is always right but isn't that bright at times.

[ctrader3] 14/8/2021 09:18

if u had bought after the dotcom boom u would have had to
have held the share for 16 years to get your money back,
allowing for inflation nearer to 20 years.
But, there is always a but if u had bought ten years ago
with a 5k stake, that would be worth 50k.
They recently had a 10 for one share split so for every one share
u owned u would now own ten, IF they have
the same performance over the next ten years your
5k will be worth 500k.
Will it, won't it, only one way to find out.
GL

the power of the markets your gains are unlimited but
your maximum loss is only the amount u stake,.

[ctrader3] 14/8/2021 09:11

if u want somewhere to re-invest your MRCH dividends, above are
some of the best TR shares, past history etc,. etc,.
Interesting share ATT

[ctrader3] 14/8/2021 08:51

u would have still been better trading MRCH.
S&P is close to it's high, when it falls not IF
the world of investing changes.
Relevant research the DotCom boom.
GL

[tim 3] 13/8/2021 23:21

Indeed Zac, My holding in S&P etf's bought a little over a year ago is also up over 40%.

Some may disagree but long term I don;t consider the S&P high risk.

Diversification is key.

[zac0_4] 13/8/2021 23:12

Overall I'm not disappointed in the return year to date from my holding in MRCH. However, I think a more realistic comparison with regards to performance is to compare it to its level in q1 2020 ie pre-pandemic level.
Using this as a benchmark shows a total return of about 3%. I might add that compared to other of my dividend paying holdings that's not too bad!
But compare it to my holdings in global equity funds. LF Blue Whale, Rathbone Global Opps and Fundsmith Equity have returned 35%, 40% and 30% respectively over the same period.
That's one of the reasons why I invest in a mixture of dividend paying holdings and equity funds for capital growth. Taking a blinkered approach towards just investing in dividend paying holdings can be, in my experience, a mistake.

[topvest] 13/8/2021 20:35

Very sad death of Simon Fraser, previous Chairman of Merchant's Trust and F&C this week. A very well respected investment trust leader. He will be missed.

[ctrader3] 13/8/2021 15:39

the next generation of dividend hero's maybe.
as u can see HFEL is bottom of the table, where
will it be by the end of the year ?

[ctrader3] 13/8/2021 15:34

best performing TR dividend hero for this year to date, congrats
to the management.

[ctrader3] 13/8/2021 14:51

now using 10k, just because it's easy and
ignoring trading costs and u sell next week at 550p
u have received a dividend as a Brucie bonus, which
I'll also ignore, which more than covers any costs.
we know the dividend is £775.00 pa.
if u now take your £15,713 and re-invest in
HFEL yielding 7.5% your dividend for the next
year would be £1,178.00. HFEL reported the dividend
was covered without using any reserves.
whilst u are unlikely to do so, even maybe splitting
the cash into 2 yielding shares, u would sit
back, bank the dividends and wait for Mr. Market
to let u do it all over again, because at times
Mr. Market is not that bright.

[escapetohome] 13/8/2021 14:38

You don’t need to be clever to spot that opportunity.

[escapetohome] 13/8/2021 14:37

I did buy at that price.

Comment at the time dissing ‘value’ shares and MRch performance was wide of the mark.

Clearly unable to appreciate contrarian view.

[ctrader3] 13/8/2021 14:11

if u were clever, lucky, fortunate to buy here at 350p, everyone
had the opportunity. (my lowest price was 362p.)
the current dividend is 27.2p a yield on the buying price of
350p = 7.75%.
this yield will gradually increase until
a. u sell the shares
b. MRCH amend their dividend policy.
c. inflation hits the market and then the dividend should
rise more quickly.

get rich slow.

[ctrader3] 13/8/2021 09:40

there's an interesting new breed of IT's who pin next year's dividend
percentage to the end of year NAV.
Some will pay from capital as well as dividends received,
the big advantage u don't have to incur the costs of
selling any shares and your holding remains the same.

[ctrader3] 13/8/2021 09:36

04/08/2021 14:04:19 ▼


European Assets Trust PLC - Netherlands-based trust that invests in European quoted small and medium-sized companies - Reports a net asset value total return of 13% in the half-year ended June 30, slightly ahead of the EMIX Smaller European Companies benchmark return of 11%. Sees NAV per share reach 146.19 pence on June 30, up 35% year-on-year from 108.47p and 10% higher than the 132.75p reported at the end of 2020.

Declares first and second interim dividends for the period totalling 4.00p, up 14% from 3.51p a year prior. Announces total dividends of 8.00p to be issued in 2021, also 14% higher than the 7.02p issued in 2020.

Chair Jack Perry says: "The majority of the first half of the year has been characterised by optimism of an economic and social recovery following the widespread vaccination programmes...Though the authorities are clear that they believe any inflationary spike will be transitory, the debate is likely to dominate market commentary into the second half...We are fortunate that our stock research is conducted in a large diverse region of opportunities. It allows us to uncover high quality niche opportunities at attractive prices, and this is what will drive our long-term returns."

Current stock price: 144.00p, up 0.5% on Wednesday

Year-to-date change: up 20%

Dividends

One consequence of the pandemic has been a reduction in the dividend income the Company receives from its investment holdings. Many of the companies held within the investment portfolio have reduced or even cancelled the dividends they pay to their shareholders. While we have seen some rebound in dividend receipts during the first half of this year, our total dividend income remains subdued. Notwithstanding the reduced dividend distributions from some of our portfolio companies, we remain confident of the continuation of our dividend policy of paying an annual dividend equivalent to six per cent of the Company's NAV at the end of the preceding year. To fund its dividends the Company can use a combination of current year profits and the Distributable Reserve. As at 30 June 2021 the Company had a Distributable Reserve of £335.8 million.

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for the record I own the above.

[ctrader3] 13/8/2021 08:24

Dividends can be more reliable than share prices as they're driven
by the companies performance itself and not by
the whim of investors.

As part of a total return / reinvestment strategy, this income could be
reinvested into income assets or back into the equity market
depending on the relative valuations.

----------------

sounds logical, the outturn will depend on what happens
to the market when the QE is removed/reduced, then if inflation
is temporary or not and the weighting of your dividend/growth
portfolio.
I would favour at this late stage of a bull market increasing the
dividend weighting and decreasing the growth weighting but
that's me and not u.

GL

[zac0_4] 12/8/2021 22:59

I haven't posted here for a while but remain a holder and a regular reader! I don't want to get involved in the argument around 'value vs growth' as I have a foot in each camp and, up to now my growth holdings have far outperformed my value holdings ie total capital growth has outperformed my dividend paying holdings.

However, I read with interest recent postings regarding moving holdings into higher yielding stocks and have begun to explore that option in a bit more detail.

One of my current dividend paying holdings is with Aberdeen (formerly Standard Life). I'll use a £10,000 current capital value as an example. For that value of holding I'd receive annual dividend payments of £506. A yield of 5.06%. Now, supposing I sold my £10,000 holding and invested £6,583 in Henderson Far East Income (7.69% yield) I'd still enjoy annual dividend payments of £506 but I'd have £3,416 to invest elsewhere. In my case I'd split it equally between Fundsmith Equity, LF Blue Whale Equity and Rathbone Global Opportunities. No loss of dividend income but, in my opinion, a more balanced portfolio.

Food for thought and comments welcomed!

[ctrader3] 12/8/2021 16:31

and in the case of MRCH at a better long term yield.

[gateside] 12/8/2021 16:19

Sounds good to me.And when the price falls, those dividends buy extra shares.