Tuesday, 1 January 2019

2018 HYP Review

A little over 7 years ago (late 2011) I started to build a UK High Yield Portfolio (HYP).  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.  I continued building the portfolio until July 2015 by which time I’d amassed 17 shares across multiple sectors.  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.

Today the portfolio is down to 16 shares because of the forced Amlin sale in 2016.  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.  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’m looking at you Pearson, ticker: PSON, although I didn’t 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).

There were no buys (or sells) in 2018 (making the maths pretty easy this year).  The complete HYP and the respective values of each share are shown in the chart below.  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).

Retirement Investing Today High Yield Portfolio
Click to enlarge, Retirement Investing Today High Yield Portfolio

Sainsbury’s, Astra Zeneca and SSE were all bought on the same day back in late 2011.  The big divergence in values nicely demonstrates why I no longer actively trade or invest.  I’m rubbish at it...  The annualised capital gains/losses of my complete HYP shown in the chart below further demonstrate this.

Retirement Investing Today HYP Annualised Gains/Losses
Click to enlarge, Retirement Investing Today HYP Annualised Gains/Losses

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.  That said I never sold the HYP as it now forms an important part of my overall portfolio because while it’s only 5.1% of my wealth in 2018 it delivered 13.1% of my total dividend income.  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:
  • One of the aims of a HYP was as a substitute for an annuity in retirement and I want to use it similarly to help me live off dividends only in FIRE and in that regard it’s still punching above its weight.  In 2018 it spun off £3,587 in dividends.
  • When we come to register in Cyprus as self sufficient in a few weeks we need to demonstrate unspecified (yes I know....) sufficient income to prove we’re not a potential burden on the state.  Those dividends are a good chunk of income to help with that.

Along the lines of replacing an annuity I also want to see the dividends spun off by the HYP to increase at a rate which is equal to or greater than inflation if it is to be called a successful investment strategy.  I unitised my HYP a long time ago so I know in 2018 that goal was not achieved with dividends actually falling by -9.0%.  There were some mitigating factors (excuses?) causing this.  The main one was National Grid’s (NG.) special dividend and share consolidation in 2017 which boosted 2017 dividends.  This was partly offset in 2018 by Sainsbury’s dividend payment timings resulting in dividends for 3 half years.  Netting both of those off and the dividends still only rose a miserly 1.1% which is well below the current inflation rate (RPI) of 3.2% so not a great year in this regard.

That said, while ever the HYP comes close to matching the total return (dividends + capital gains) of a simple FTSE tracker over the long term I’m still happy to stay with it.  If it can’t I’d be better off selling up, buying an ETF tracker, accepting I’ll need to sell down capital to eat and then going fishing.

So looking at portfolio performance:
  • Dividends.  The trailing dividend yield of the HYP for 2018 was 5.5%.  In contrast the FTSE100 was 4.8% (now using dividend yield information from www.dividenddata.co.uk because of the Financial Times pay wall on their market data) and the FTSE250 is 3.1%.  The FTSE100 most closely resembles the type of companies held within the HYP.  So far so good.
  • Capital Gains.  Over 2018 the HYP has seen a capital loss of -4.9%.  In contrast the FTSE100 lost -12.5% and the FTSE250 -15.6%.  Of course short term share price fluctuations are in the noise so if I look back since inception the HYP gains are 42.4% compared with the FTSE100 at 26.6% and the FTSE250’s far more healthy 76.6%.
  • Total Return.  For 2018 my HYP total return is therefore 0.6% while the FTSE100 has total returns of -7.7% and the FTSE250 -12.5%.

A poor year for my HYP although at least it outperformed its 2 main competitive indices on a total return basis.  Looking longer term and knowing that every year since inception the HYP has paid more dividends than the tracked indices it’s still outperforming the FTSE100 but under performing the FTSE250.

The 2019 plan is to sit on my hands and just continue to collect the HYP dividends.

As always DYOR.


  1. Happy New Year RIT. Nice to know it's not just me crunching numbers on a new years day morning! :)

    Hope you and the family settle well in to your new lives there (many congratulations!). I look forward to the updates.

    Keep up the good work

    1. Happy New Year AlwaysLearnin! We had a great New Year but one which involved very little alcohol helping me to be sharp as a tack this morning :-)

      I'll get a full wealth review up in the coming days. I just have to wait for some dividend laggards to declare what they're paying as of year end and I'll be data complete to pull one of my usual yearly review together.

  2. @AlwaysLearnin - definitely not just you and RIT - I too have been doing some 1st of the year number crunching!

    @RIT - Good to see this analysis. I too have a HYP which I haven't analysed properly for ages; you remind me I am overdue. But I am pretty sure your results beat mine.

    Have you been tempted by the REITs? E.g. LAND or, if you are feeling particularly racy, AEWU?

    1. Happy New Year FvL! Within the overall portfolio I do have a few REIT's forming part of my '10% of wealth to property after home purchase'. I'm currently holding HSTN, SGRO, BLND, HMSO and PHP. The remainder is rest of Europe focused via the ETF IPRP.

      Not familiar with AEWU. A quick glance suggests it's trading about 10% below NAV. Do you own any and what's your experience with them been?

    2. RIT - yes I own some AEWU. I bought initially at about £1.00/share and I have been topping up slightly as it is has dropped to about £0.90/share. I see it as promising (hah) me 2p/quarter dividend, so the divi yield is high. However given that it has dropped in value by >1 year's income this, sadly, is par for my HYP course. I continue to hold, believing that ultimately its business model remains OK, I am reasonably confident of the dividends and I can more easily imagine a stable price than a further 10% decline. The moment the dividend is warned against / dropped, I am out.

      There is a similar holding - RGL - regional commercial property - which has similar dynamics, albeit a smaller price drop. I own a bit of that too.

      I wasn't familiar with HSTN/HMSO or PHP - I will go take a look.

  3. Hi and congratulations on your recent exciting move. How are you finding using your investment platforms now that you are no longer UK resident? Have any of them reduced any online functionality that you previously enjoyed?

    1. So far no change but I also haven't yet updated my address everywhere. I've focused on the companies that send me post first and then I'll gradually work through the ones that communicate via email or not at all.

    2. Good idea. I'll look forward to your perspective on managing some assets from afar if that is in your plan. Thank you.

  4. A comment on investing psychology . Markets have had a very troubled Dec - which has illustrated the more normal December outperformance. So subconsciously , have all you New Years Day number crunchers been wanting to pat yourselves on the back and start off the New Year with an endorsement from that last year's performance ? I cannot blame you - even though most will deny the point and claim 1st Jan is just an obvious time for a review ( and most don't work on 1st Jan anyway so a consistently free day every year )

    1. My investing strategy is these days largely mechanical. My timeline on the investment return side is generally:
      - Every week on a Saturday morning I update my financial positions which gives me my current wealth.
      - Each month I calculate my YTD investment return.
      - Each quarter I look more deeply at investment returns which is the information I publish. That includes a full year post which comes in mid-January after all the dividend laggards have paid up.
      - Calendar annually I analyse and publish my HYP (which is a sub-set of my overall portfolio) performance to make sure it's something I still should be doing.

      So for me it's nothing to do with investing psychology.

    2. Well- OK - I was thinking more of an investor who only goes into significant detail once a year. And my argument is weak as if you are always looking at 1st Jan then you are comparing ( apple ) years with ( apple ) years.

      But I beg to differ with the view that your approach is nothing to do with psychology . It has everything to do with your psychology - it has RIT written all over it. Belt, braces, jock strap and long johns - but there is no denying that you are very good at it , seem to enjoy it , we all benefit from your dedication and I think it has encouraged you to keep your nose to the grindstone as up to Nov 2018 your portfolio just kept growing.

    3. "Belt, braces, jock strap and long johns..." I like that a lot...

  5. I don't read Motley Fool and I don't hold any etf's in my portfolio but I think that might change .

    I found this interesting and helpful.


    RIT - I suspect that you are unable to sell all of your HYP in one go due to CGT liabilities ( but you could transfer some to your wife and use her CGT allowance as well. )

    If you are planning on keeping HYP long term I think I would check that each constituent of your portfolio appears in etf 2 and 3 and also if it appears in 1 but not in 2 or 3.

    What effect would the TER of approx 0.35% pa on these etf's
    have compared to your projected HYP long term performance ?

    I would expect that high yielding UK shares in FTSE 100,250,350 or All Share Indexes are one category that probably need more attention than many others.

    1. Not a tax expert but this is where I think directionally I find myself re CGT. Not planning any sales yet so haven't done the full research needed.

      Cyprus doesn't have CGT on the investments that I own so here I'm free to buy and sell at will. However the UK has far reaching talons. Even after becoming non-resident for UK tax purposes we need to be really sure we're not coming back to the UK as if I return to the UK within 5 years of leaving I'm still caught in the UK CGT rules in some form. We're not prepared to make that commitment yet, as we've committed to 6-12 months, so I will be avoiding selling where possible and if I do it will be below the CGT limits.

  6. Happy New Year - glad to see that you've not become a lotus-eater yet. Now, a quibble:

    "In investing total return (dividends plus capital gains) is what matters": nah! In the accumulation phase it's total return plus additions that matters; in the decumulation phase it's total return less withdrawals that matters. End of quibble.

    You are in a quite different world now, and it may be that you won't fully internalise the fact until a few years of cold reality have been experienced. Or, if you stay in Cyprus, warm reality. Those of us who have already retired ... blah, blah, blah.

    I must say that in your shoes, and at age 45 (can that be right?) I'd be considering constructing an annuity-substitute by building a ladder of TIPS to last to, or beyond, the the sort of age when buying annuities proper might become attractive.

    Diversification from equities to equities + ladder sounds more attractive to me than diversifying to equities + bond funds. When you're older it's likely that equities + annuities would be more attractive than equities + bond funds.

    At least, so I infer from the writings of the retirement researcher Wade Pfau, and the unusually impressive retirement blogger Dirk Cotton (at The Retirement Cafe).

    And in case you are unfamiliar with it let me draw your attention to this spine-chilling paper: spine-chilling, that is to say, for the gung-ho everything-in-equites investor.


    1. I cannot make your link open up. Any ideas ? - or try re-posting.

    2. I've just copied and pasted it into the Safari browser and it works a treat.

      You could try googling by title/author:

      Stock Market Charts You Never Saw
      Edward F. McQuarrie

    3. Happy New Year dearieme

      Hopefully never a Lotus Eater. He went into it knowing he'd run out of money in 25 years 100% guaranteed. I'm naive enough to think that a 2.5% SWR or 85% of dividends whichever is the lesser should be good 'forever'.

      Interesting thought about laddering. I looked at laddering briefly a number of years ago and never really came back to it as I wasn't bridging to a DB pension or State Pension (I still assume 0 here). Maybe time for a thought experiment. I'm age 46 now. HL is currently showing a joint life 50%, 3% escalation, no guarantee annuity yielding 2.69% at age 60. So let's call that annuity purchase day. Right so let's buy 14 years of a TIPS ladder which means at planned spending I'm going to be using up about £350k (14 years x £25k planned annual spending) of the little over £1M (I've ignored the TIPS yield above inflation). Where do I now put the £650k. If I put it all into Equities, assume 0.25% expenses and use cFIRESim (so US market returns) for that 14 years worst case history leaves £472k. Now I buy that 2.69% annuity and I have annual spending of £12,696. Unless I'm missing something it gives me surety now (when my skills are still current enough to be able to so something about it if we start getting a poor sequence of returns) but I could be in quite a bit of trouble later. Of course lots of if's, but's and when's in there.

      Is that how you were thinking about it?

    4. Try this https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3050736 and then click on Download This Paper in the top left.

    5. "Is that how you were thinking about it?"

      Not really: I was mainly thinking about what might be the best way not to have too much of your money in equities at a deeply unpromising part of the stock market cycle. (I've thought it unpromising for a while, not just for a week or two.)
      Maybe I really mean "consider a bit of market-timing".

      Now, however, I see that you have a short term fall-back, to wit de-retire; unFire. Use your "human capital" as people like to say. Seems a good idea to me. But it would rather defeat the point of Firing in the first place.

      As for annuities, in your shoes I might consider buying one at the age when it will be clear what size, if any, of state pensions you'll be collecting. Perhaps bond yields will be higher; perhaps life expectancies will have shrunk; then annuity yields would be higher. Perhaps it would be worth your while in due course buying more state pension as an annuity-substitute.

      People talk of balancing between equities and bonds, presumably with bond funds or bond ladders in mind. But generally an annuity can have two advantages over bonds: (i) a higher yield, because of the mortality credits as a result of risk-pooling, and (ii) longevity insurance - it runs out only when you do.

      Oh, and (iii): "dementia insurance", in that the money arrives every month without any requirement that you be alert enough to manage a portfolio of investments.

      Put otherwise: trying to draw even a roughly steady sole income from intrinsically variable assets such as equities is a risky business. Probably few of us can fully appreciate how heart-stoppingly risky it might be without trying it for ourselves: it would certainly scare the pants off me.

      Good luck, though. Nothing ventured etc.

    6. "Now, however, I see that you have a short term fall-back..." Throughout this adventure I've been very consistent about work being 100% optional once I FIRE'd. Back testing the maths suggests that provided we don't get a sequence of returns worse than history I should be golden but living it is of course a very different story.

      In life I've always tried to have a Plan A but then a back-up Plan B as well. An example is my assume a State Pension of zero but then plan to pay Class 3 NI contributions as an insurance policy. Back testing also seems to suggest that you're typically going to know you're in trouble within the first few years of FIRE. It also looks like I've retired right into a soft patch. Hopefully I've well protected myself and I'm seeing that in my numbers. I haven't rolled it all up yet but for 2018 I'm something like 4.5% down which is reasonable given what some markets have done. If that suddenly turned into 75% down then with 40 years or so of FIRE to go I might do something crazy like return to paid work for a period of time. I probably have a window of a couple of years which i could explain away on a CV I would guess.

      I hear you re 100% or similar equities. I read quite a few blogs for inspiration / what others are thinking but I'm actually struggling to find blogs where they have retired and aren't side hustling like crazy. The ones talking it up about 100% equities while retired are also pulling in decent salaries as professional bloggers / influencers which is a very different position to where I find myself.

      The above probably sounds quite negative and I'm not actually feeling that at all. I'm just always trying to make sure I have options. Maybe that's why I've been quite conservative in my approach - 2.5% or 85% of dividends vs the much hyped 4% being one example. I believe I've protected myself as much as possible and have some opportunity to also cut back if needed but if the future doesn't rhyme with history it's time to get creative before I end up under a railway arch.

      Some of your ideas above have real merit. I hear you re annuities which of course is balanced against the fees they extract. I just think for now it's way to early for me to be even thinking annuities. Are you using TIPS ladders or annuities in your plans?

    7. We bought annuities as follows. Two by virtue of deferring our state pensions for about five years, one by using "3A NICs", and one by surrendering part of one of my DB pensions so that my wife would eventually get a bigger widow's pension. The terms of all four deals were good to excellent. I viewed it as opportunistic investing.

      I viewed investing in equities and in gilts as opportunistic too: taking our profits let me fund those annuity purchases.

      What's got me stumped is how to protect us if I should need "care" while my wife is still alive, and needs our house to live in, and will be short of income because of my care fees. It's essentially an insurance problem but attempts by Lifecos to make a living selling insurance for care costs didn't succeed. I gather it's not a thriving business in the US either.

      So I am pondering whether a combination of a rolling ladder of index-linked bonds, and some equities, might protect capital for that. Alternatively I have an idea for an exotic solution to the problem but I suspect it will be far too expensive to be attractive.

    8. Thanks for sharing there dearieme. At approximately what age did you start to annuitise?

      The one person needing care is an interesting one. Thinking about myself I couldn't imagine rattling around a big house on my own. Could an option be sell the family home, stay in the same area - maybe a more walkable location though - and buy something much smaller?

    9. Could be, but Herself is very attached to her garden. She's got the house into a pretty comfortable state. And it's the nest she raised her brood in. It's well provided with bus routes too.

      Also I reckon that the capital released by trading down is easily exaggerated: I suspect the costs to be high. And an old woman might not cope well with trading down knowing that in due course she'll perhaps be selling up again to go into care herself.

      I'm not the only person on the internet thinking out loud about the problem of funding care while both of a couple are still alive. I've yet to see an attractive solution except "buy an immediate needs annuity when the first enters care". That may indeed be best, but it's hard to plan for because the cost is pretty unpredictable. It would call for keeping capital intact which in my view rules out a buy-and-hold policy for equities dominating our portfolio.

      We started annuitising in our early sixties when I decided on the part-surrender of the DB pension. Of course that annuity won't be paid until I snuff it. It approximates, I suppose, to the US idea of a "deferred annuity".

      The state pension ruses started paying out in our mid and late sixties. There's no guarantee we'll profit from them financially - though the odds favour us - but we profit enormously from the security they bring. Which is the point of the insurance aspect of annuities.

  7. I agree with your view about 100% equities. It does seem to favoured by those bloggers who have alternative forms of income. Using the Dimson, Marsh, and Stanton (DMS) global return data set (back to 1900), then on a 50 year lookback, and assuming 50bp of NAV drag due to fees, the SWR of a 100% UK equity portfolio is 2.83%. The drawdowns, however, are horrific and I'm skeptical many would endure them without selling out. Unfortunately something with far more modest drawdowns like the Permanent Portfolio only provides an SWR of 1.88%.

    It's not my approach but I tend to think the compromise for most is a balanced portfolio, say 50% equities (UK, global, EM), 30% bonds, 20% property which has an SWR of 2.52%. The Monevator S&S portfolio provides a similar SWR.

    At some future point, it's probably sensible to annuitize part of the portfolio to provide an income "floor", leaving the residual to provide the upside. Right now, however, low gilt yields do make this expensive and anyway it's not even available for those in their 40s.

    1. Some incredibly valuable data in there. Can I just confirm I've understood?

      For the 100% UK Equities case it's saying for a 50 year drawdown, assuming annual inflation spend uprates, the SWR is 3.33%? So let's assume expenses are a bit less than your 50bp at 25bp the SWR is 3.08%. Do you know when the worst starting years were?

      Then for the balanced portfolio it's saying for a 50 year drawdown, assuming annual inflation spend uprates, the SWR is 3.02% (2.52% + 50bps)? So again let's use slightly lower expenses of 25bps and the SWR is 2.77%. Were the worst starting years the same?

      If I've understood correctly that information comforts me a little given my 'balanced' portfolio is not to far adrift from the balanced you gave at 55% Equities (20% UK, 20% Global, 10% Aus, 5% EM), 23% Bonds, 10% Property, 5% Gold and 7% Cash (3 years expenses).

      In comparison the Wade Pfau work for a shorter period of 30 years found that for 50% UK Equities : 50% UK Bonds the SWR was 3.05%. So add 25bps of fees in there and one's at a SWR of 2.8%.

      Then for 50% Global Equities : 50% Global Bonds the SWR was 3.26%. So again add 25bps of fees and the SWR is 3.01%.

      It was that work that helped me set a 2.5%+circa 25bps expenses WR knowing that we could have 40 or 50 years ahead of us and not 30.

      I think I agree with both you and dearieme on annuities at some point. If for nothing more than the dementia / incapable of managing a portfolio risk later in life. It's just way to early yet as I really have no options available to me.

    2. Just to give you some more colour (with 50bp of fees)

      On a 50-year horizon simulation, 100% success
      Portfolio: SWR, year
      UK 100% Equity :2.83%, 1900
      UK 100% Gilts :0.90%, 1947
      UK 100% T-bills :1.22%, 1935
      UK equity 60%/UK Gilts 40% :2.35%, 1900
      UK equity 40%/Global 20%/Gilts 40% :2.60%, 1900
      UK equity 48%/Global 24%/Gilts 20%/RE 8%:2.69%, 1900
      Permanent Portfolio :1.88%, 1935

      For comparison
      On a 30-year horizon simulation, 100% success
      UK 100% Equity :3.46%, 1969
      UK 100% Gilts :1.71%, 1947
      UK 100% T-bills :2.27%, 1935
      UK equity 60%/UK Gilts 40% :3.01%, 1900
      UK equity 40%/Global 20%/Gilts 40% :3.27%, 1906
      UK equity 48%/Global 24%/Gilts 20%/RE 8%:3.44%, 1906
      Permanent Portfolio :2.83%, 1937

      The early part of the 20th century was pretty grim for sequenced asset returns with two world wars which left the UK economy broke, a Great Depression and bouts of high inflation.

    3. Thanks so much for that ZXspectrum48k. This is gold for me and I'm sure a few readers. The closest thing to my portfolio is somewhere near the 40% UK Equity and the 48% UK Equity which would have given over a 50 year period between 2.60% and 2.69% with 50bps of fees. That's good news for my 2.5% + circa 0.25% of fees. Provided history only rhymes I should be golden. If we make new worst case history then I don't have much margin...

    4. Just to add that fractional investment expenses and SWRs aren’t really additive as seems to be implied by the back-of-the-envelope calculation. If fees are calculated as a percentage they get lower as the value of a portfolio falls, so the drop in SWR is less than the fee percentage.

  8. "I'm skeptical many would endure them without selling out": me too. I've seen financial advisers baldly state that people don't endure such losses; they capitulate.

  9. Long term care : costs are " a moving target " and legislation will go on changing which may make it slightly easier to know what your financial committment may need to be .

    What you need to know : 1. How old are you going to be when you die ?
    2. What are you going to die from and will you have other serious health problems in addition to whatever is the main course of your death ?

    That's partly why it is a moving target.

    There is a lot of info available on the %'age of people at whatever age ( over 65 ) that will end up needing some kind of care - also on the average length of stay in the different " levels " of care homes.

    NB - beware that some figures have been published by insurance companies trying to frighten people into taking out some kind of insurance.

    Dementia ( Alheimers and vascular dementias are by far the most common ) and neurological problems,disability following a stroke , MS , Parkinson's and MND ( motor neurone ) are the conditions most likely for you to require extended long term care.

    Say you need nursing home care. How much of the care you need is medical? ( payable by NHS currently ) and how much nursing care ? As you can imagine these categories are not clear cut - so inconsistencies occur in different postcodes and different care or nursing homes. Local council funds are likely to be more and more squeezed and NHS will fight having to spend more in nursing homes - so the categories that currently would be considered medical may no longer be in the future.

    You cannot plan for everything ( even b,b,js and lj RIT ) and by keeping a separate pot of investments to cover long term care obviously reduces the funds available for your current needs and lifestyle. So - why worry too much ?

    You may receive an inheritance , win the lottery , have very successful children or in-laws , live in a country where care home fees are funded by the State etc etc . The likeliest outcome is that you will have a fairly short terminal illness and then die. Game over.

  10. Look at your family history and see if you are at an increased risk of developing one of those conditions likely to require a long period of care . Await further developments in genetic testing and research into genetic predispositions to these - all the time hoping that they all draw a blank and help you to stop worrying .

    Some will find thhat easier than others . Others will want to look at every possible eventuality and try to have it covered . Well - good luck to those - who need to find some way of helping them find some peace , tranquillity and space to fing enjoyment in living.

  11. I'll echo a good question I saw recently. Where can I see a graph of the (inflation-corrected) dividend stream of, say, the S&P 500 going back as far as poss. The figures clearly exist because people plot both share price return and total return including dividend reinvestment. I don't ask for the impossible task of correcting for fees and taxes: just the divi stream generated by investing, say, ten thousand dollars in the S&P (or S&P-equivalent) in the year dot. Or successive years dot.

    People always say that that dividend stream would be pretty steady: I'd like to see if it was. It's odd that I've never come across such a plot - "odd" because you'd think it would be seriously interesting to people as they approach retirement.

    1. You can get that for the S&P 500 (and predecessors) from Robert Shillers website. Go here http://www.econ.yale.edu/~shiller/data.htm and then click on the U.S. Stock Markets 1871-Present and CAPE Ratio hyperlink. That gives you an Excel with a whole pile of interesting data including real dividends back to 1871.

      I did some work on this in a previous post when I was trying to work out if it might be possible to live just on dividends http://www.retirementinvestingtoday.com/2015/09/living-off-dividends-in-early-retirement.html . I synchronised with the start of long bad bear markets from a price perspective and saw real dividend downturns of 40% or so compared with real price downturns of 80% (I can't imagine being 100% in equities during that). Just looking at real dividend previous peak to trough and at a quick glance I can see at least one 50% fall.

    2. Many thanks.

  12. Happy New Year, RIT!

    Enjoyed reading your update (and also the comments). I don't have a HYP portfolio as such but the basket of investment trusts I'm investing will hopefully provide adequate income for my purposes in retirement.

    Hope the family is settling in and look forward to your updates on how you cope with retired life, manage your portfolios and income.

    1. You inspire a thought, weenie. Maybe Retirement Investing Today should be renamed Rentier Issues Today.

  13. Thanks for your HYP annual review. I've followed Stephen Bland's "Dividend Letter" fairly closely for about 4 years. My results appear to be similar to yours. The yield (dividends over an average of the last 12 months value) was 5.3%. Total return was -6.5%. Forward yield is currently 5.6%. I'm not yet convinced it's much better than a FTSE100 tracker or income focused tracker, but it cost virtually nothing to run the portfolio. The natural yield is intended to top-up my wife's final salary railway pension (accessed from age 50) and my SIPP at age 55. Being a US/UK citizen, I cannot use a ETF or index fund outside of a SIPP tax efficiently, so this portfolio works well as an alternative. Also, most of the dividends are (potentially) only taxed at long-term capital gains tax rates, should my taxable income in the US ever exceed my taxable income as assessed by HMRC (UK/US tax treaty). Stephen Bland, formerly of the Motely fool as you are probably aware, runs a newsletter to help people follow his method. It primarily uses large FTSE100 large yielding companies, equally weighted across sectors, buy-and-hold forever, avoid high debt companies (not always possible), otherwise do nothing style.

  14. https://ftalphaville.ft.com/2019/01/09/1547047156000/What-happened-when-Vancouver-residents-built-new-homes-in-their-backyards/?hubRefSrc=email&utm_source=lfemail&utm_medium=email&utm_campaign=lfnotification#lf-content=240924069:822079751

  15. Looking at anyone's overrall finacial situation this article may be of interest . As far as I understand it - to accummulate wealth ( particularly if you are going to opt out of UK property market at some point ) you need to " max out on your mortgage " ie - gear yourself up as much as possible.