{"id":205096,"date":"2025-04-25T16:42:24","date_gmt":"2025-04-25T16:42:24","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/retirement-investing-today-2018-hyp-review\/"},"modified":"2025-04-25T16:42:24","modified_gmt":"2025-04-25T16:42:24","slug":"retirement-investing-today-2018-hyp-review","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=205096","title":{"rendered":"Retirement Investing Today: 2018 HYP Review"},"content":{"rendered":"


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\nA little over 7 years ago (late 2011) I started to build a UK High Yield Portfolio (HYP).\u00a0 It was a much talked about strategy back in the Motley Fool forum days and today still gets plenty of attention on the Lemon Fool forums<\/a>.\u00a0 I continued building the portfolio until July 2015 by which time I\u2019d amassed 17 shares across multiple sectors.\u00a0 That included a token amount of Royal Mail Group (ticker: RMG) during the initial public offering in 2013 and the spin-off of S32 by BHP in 2015.<\/p>\n

Today the portfolio is down to 16 shares because of the forced Amlin sale in 2016.\u00a0 It was set up to be close to a low tinker portfolio with only a few mechanical rules that would be triggered if there were big changes to a share.\u00a0 For example if the actual value of a holding became 50% larger than the median share holding I would sell 25% or if the actual dividend yield dropped below 50% of the FTSE All Share (I\u2019m looking at you Pearson, ticker: PSON, although I didn\u2019t follow my own rules when they cut the dividend in late 2017 and the share price is up 27% since making me think my rules might actually be rubbish).<\/p>\n

There were no buys (or sells) in 2018 (making the maths pretty easy this year).\u00a0 The complete HYP and the respective values of each share are shown in the chart below.\u00a0 The purchasing rule that I followed was the amount of the next purchase was the median share value of the current portfolio (with the exception of RMG and S32).<\/p>\n

\n\"Retirement<\/a><\/div>\n

\nClick to enlarge, Retirement Investing Today High Yield Portfolio<\/i><\/p>\n

\nSainsbury\u2019s, Astra Zeneca and SSE were all bought on the same day back in late 2011.\u00a0 The big divergence in values nicely demonstrates why I no longer actively trade or invest.\u00a0 I\u2019m rubbish at it…\u00a0 The annualised capital gains\/losses of my complete HYP shown in the chart below further demonstrate this.<\/p>\n

\n\"Retirement<\/a><\/div>\n

\nClick to enlarge, Retirement Investing Today HYP Annualised Gains\/Losses<\/i><\/p>\n

I stopped adding to the HYP in 2015 with my overall investment strategy, as my wealth grew, simply moving on to be a mechanically diversified collection of low expense, physical (as opposed to synthetic), income based (as opposed to accumulation) ETFs tracking enough indices to give me diversification across asset classes and countries held within low expense SIPP\/ISA\/Trading Account wrappers.\u00a0 That said I never sold the HYP as it now forms an important part of my overall portfolio because while it\u2019s only 5.1% of my wealth in 2018 it delivered 13.1% of my total dividend income.\u00a0 In investing total return (dividends plus capital gains) is what matters but this over performance in dividend yield is very useful to me for a couple of reasons:<\/p>\n