HYP1 is 22 - thread discussing income and capital diversification

[monabri]

22 years into the experiment and total income from HYP1 is £123k - somewhat higher than many of the "alternatives" tabled by
Ian THughes.

Capital values ....that's another discussion and I don't believe that was "on the tin" that PYAD proposed.

So, it doesn't look to have "failed" IMHO - it has just shelled out another £11k of income in the last year. It might be considered to "fail" if it stops paying out - and there is a risk of that - the concentrated & unbalanced portfolio has increased this risk.

[IanTHughes]

Are you serious?

The first four years of Income:

HYP1 | 13,327.00
CTY  |  9,355.48

An HYP1 investor could have held back almost £4,000!

The annual income for CTY only overtook that of HYP1 during year 10, before which the income receipts would have been:

HYP1 | 30,496.00
CTY  | 21,792.06

An HYP1 investor could have held back over £8,700, more than twice the income from CTY during that 10th year!

I know that you are ignorant with regard to the High Yield Portfolio (HYP) strategy, but surely you do understand what High Income is!

And if you clearly understand what 'High Income' is then Ian, are you able to explain why you're using things like Scottish Mortgage (SMT) and Foreign & Colonial (FCIT) in your earlier HYP1 comparison post linked below?

https://www.lemonfool.co.uk/viewtopic.p ... 76#p548566

Could you not have found a couple of 'High Income' alternatives that yielded precisely 0%, just to try and prove your point even more?

Sorry, I was not aware that you had provided any alternativea! Have you?

Yes I do know that Scottish Mutual (SMT) and Foreign and Colonial (FCIT) have never exactly been High Yield

But what about:

Epic |       Name                        
HHI  | Henderson High Income Trust plc   
MRCH | The Merchants Trust Plc           
MUT  | Murray Income Trust PLC           
BNKR | The Bankers Investment Trust PLC  
TMPL | Temple Bar Investment Trust PLC   
FGT  | Finsbury Growth & Income Trust PLC
EDIN | The Edinburgh Investment Trust plc

I am always looking for other UK Income Providers to investegate, but so far those are the ones that I have come up with

HYP1 has done better than many possible alternatives, and nobody ever claimed that the High Yield Portfolio (HYP) strategy was going to provide the best income result, and always do so. But to claim that it has failed to provide a decent rising income, based solely on the idea that income from an investment should never decrease, something which any investor is warned might happen, is complete nonsense.


Ian

[dealtn]

So the strategy is to pay out (high) income, but the recipient is supposed to be aware enough not to spend it as it might be required?

You can't have it both ways I'm afraid. It's supposed to be a simple to follow and implement "buy and forget" strategy. You can't impose a restriction on followers of it to follow some unspoken rules to hold some of that income back. Odd that some don't appear to see the flaws in the strategy despite the obvious relative success of this single portfolio.

Any portfolio requiring the purchase of Individual Shares, or even Investment Trusts, will require a certain amount of knowledge, forethought and investment understanding. Also, there are no "unspoken rules". Any investor, however much of a beginner they are, should be well aware that the capital value of, and income derived from, any investment, may go down as well as up.

Assuming one accepts the foregoing then yes, High Yield Portfolio (HYP) is indeed as simple to follow and implement a "buy and forget" strategy" as one can find.

Furthermore, the progress of HYP1 shows thet is can work, and work well too!

Enjoy!


Ian

I think you need to revisit what was said. It was claimed a HYP1 investor could have held back some of that income. Indeed they could. But the point being that HYP as a strategy has never been propagated with such a potential need or requirement.

Now I have no argument against HYP being an easy to follow strategy, despite many not doing so. But its either easy and you get a potential (severe) diversification problem, or its less easy.

I have also no issue with a claim that HYP1 shows it can work (although the fact the income is volatile, can go down, and suffers a large degree of reliance on so few income sources in the portfolio stretches what I might consider to be a reasonable description of "work"). But a sample size of "1" is hardly statistically significant - and begs the question what might be the position were HYP1 to have underperformed.

"Can work" is hardly a meaningful endorsement in the same way "Can fail" would be a harsh assessment.

[Arborbridge]

I know that you are ignorant with regard to the High Yield Portfolio (HYP) strategy, but surely you do understand what High Income is!

Enjoy!


Ian

So the strategy is to pay out (high) income, but the recipient is supposed to be aware enough not to spend it as it might be required?

You can't have it both ways I'm afraid. It's supposed to be a simple to follow and implement "buy and forget" strategy. You can't impose a restriction on followers of it to follow some unspoken rules to hold some of that income back. Odd that some don't appear to see the flaws in the strategy despite the obvious relative success of this single portfolio.

HYP1 was set up to prove a point, but additionally we can look on HYP1 as an experiment. The result is showing us that the strategy does provide a high and rising income from a bunch of shares almost any John Doe could choose: that was its base requirement. But just as much value comes from what the experiment shows us about the variability of income, and suggests ways in which we can mitigate that.
So the unspoken rules are not unspoken - they are improvements which come out of the knowledge conferred by HYP1. The rules are post hoc, but then that's the whole point of running experiments - to give us information which by definition is post hoc.

Arb

[1nvest]

None of that gets away from the previous point that HYP1 has failed in its primary objective.

Really?

Year to date | HYP1        | BNKR       | CTY        | EDIN       | FCIT       | FGT        | HHI         | JCH        | MRCH       | MUT        | SMT        | TMPL      
20-Nov-01    |    3,451.00 |   1,212.66 |   1,765.06 |   1,160.71 |     886.50 |   1,414.73 |    5,963.84 |     958.06 |   3,276.32 |   2,314.29 |     700.46 |   2,872.49
20-Nov-02    |    3,474.00 |   1,621.75 |   2,476.08 |   1,751.38 |     942.78 |   1,240.31 |    5,963.84 |   1,301.23 |   3,355.26 |   2,428.57 |   1,067.77 |   3,016.84
20-Nov-03    |    3,197.00 |   1,680.19 |   2,516.63 |   1,806.32 |   1,196.06 |   1,686.04 |    5,963.84 |   1,408.47 |   3,394.72 |   2,535.71 |   1,127.56 |   3,103.44
20-Nov-04    |    3,205.00 |   1,760.56 |   2,597.71 |   1,806.32 |   1,069.42 |   1,937.98 |    5,963.84 |   1,487.12 |   3,552.64 |   2,607.15 |   1,588.84 |   3,180.43
20-Nov-05    |    3,546.00 |   1,872.56 |   2,688.14 |   1,806.32 |   1,266.42 |   4,689.93 |    5,963.84 |   1,551.47 |   3,611.84 |   2,735.72 |     862.76 |   3,281.48
20-Nov-06    |    4,131.00 |   2,145.28 |   2,918.92 |   2,094.78 |   1,407.13 |   4,147.29 |    4,674.68 |   1,701.62 |   3,828.96 |   3,085.72 |   1,452.16 |   3,401.76
20-Nov-07    |    4,452.00 |   2,454.56 |   3,212.06 |   2,589.30 |   1,561.91 |   3,488.38 |    4,855.44 |   2,073.41 |   4,144.74 |   3,464.30 |   1,623.00 |   3,583.40
20-Nov-08    |    5,040.00 |   2,532.48 |   3,617.46 |   2,733.51 |   1,730.77 |   3,682.17 |    6,177.72 |   2,245.01 |   4,322.37 |   3,857.14 |   1,759.68 |   3,797.51
20-Nov-09    |    3,187.00 |   2,766.22 |   3,842.00 |   2,802.19 |   1,815.20 |   3,682.17 |    3,750.00 |   2,359.40 |   4,519.72 |   3,964.27 |   2,101.37 |   3,950.28
20-Nov-10    |    3,297.00 |   2,922.08 |   3,948.02 |   2,829.66 |   1,871.48 |   3,410.86 |    6,250.00 |   2,416.60 |   4,480.26 |   3,999.99 |   1,930.53 |   4,029.67
20-Nov-11    |    3,843.00 |   3,031.65 |   4,116.42 |   3,157.97 |   1,899.63 |   3,565.90 |    5,000.00 |   2,502.39 |   4,500.00 |   4,107.13 |   2,050.12 |   4,534.88
20-Nov-12    |    4,289.00 |   3,153.40 |   4,284.82 |   3,021.97 |   2,279.55 |   3,798.45 |    5,000.00 |   2,609.64 |   4,578.96 |   4,249.99 |   2,220.96 |   4,315.96
20-Nov-13    |    5,828.00 |   3,326.30 |   4,459.46 |   3,131.86 |   2,448.39 |   4,069.77 |    5,030.12 |   2,981.41 |   4,618.42 |   4,392.86 |   2,391.80 |   4,462.71
20-Nov-14    |    5,601.00 |   3,530.83 |   4,602.92 |   3,228.01 |   2,589.12 |   4,379.84 |    5,150.60 |   2,788.37 |   4,657.88 |   4,464.29 |   2,477.23 |   4,595.03
20-Nov-15    |    6,093.00 |   3,725.65 |   4,771.32 |   3,276.10 |   2,673.55 |   4,689.92 |    5,301.20 |   3,002.87 |   4,736.84 |   4,571.43 |   2,502.85 |   4,714.12
20-Nov-16    |    6,124.00 |   3,896.12 |   4,958.42 |   3,344.79 |   2,729.83 |   5,077.52 |    5,481.92 |   3,074.37 |   4,736.84 |   4,607.14 |   2,528.48 |   4,809.15
20-Nov-17    |    7,327.00 |   4,407.47 |   5,207.90 |   3,482.15 |   2,856.46 |   5,503.88 |    5,632.52 |   3,431.84 |   4,835.53 |   4,678.57 |   2,562.64 |   4,923.41
20-Nov-18    |    8,882.00 |   4,680.19 |   5,519.76 |   3,653.84 |   3,039.40 |   5,930.23 |    5,753.00 |   3,860.82 |   5,013.15 |   4,750.01 |   2,622.44 |   5,209.71
20-Nov-19    |   10,557.00 |   4,918.82 |   5,800.42 |   3,846.16 |   3,208.26 |   6,434.11 |    5,873.48 |   4,003.82 |   5,250.00 |   4,857.15 |   2,673.69 |   6,161.20
20-Nov-20    |    5,533.44 |   2,866.08 |   5,925.16 |   3,935.44 |   3,264.56 |   6,434.11 |    5,963.84 |   4,218.31 |   5,368.44 |   4,892.85 |   2,776.20 |   6,181.65
20-Nov-21    |   11,339.00 |   2,884.08 |   5,956.34 |   3,935.45 |   3,461.55 |   6,627.91 |    5,963.84 |   4,361.29 |   5,368.44 |   4,928.58 |   2,921.41 |   3,392.13
20-Nov-22    |   11,122.95 |   5,425.34 |   6,112.26 |   3,406.60 |   3,714.82 |   7,015.50 |    6,084.32 |   4,504.29 |   5,407.88 |   5,142.85 |   3,066.63 |   1,004.40
             |             |            |            |            |            |            |             |            |            |            |            |           
Total        | £123,519.39 | £66,814.27 | £91,297.28 | £62,800.83 | £47,912.79 | £92,907.00 | £121,761.88 | £58,841.81 | £97,559.21 | £86,635.71 | £45,008.58 | £88,521.65

Or, what about ......

https://www.lemonfool.co.uk/viewtopic.p ... 10#p548510

     | Total Income
HYP1 |      123,520
B7   |      100,710
B8   |       89,054
U24  |       85,343

Do remind me again, what was the primary objective of HYP1 that you believe has not been achieved? How could it have been better achieved?

Enjoy!

Ian

4% SWR historically stood up well, 4% of the initial portfolio value, and uplift that £££ amount by inflation each year as the amount drawn in subsequent years. A variant of that is to increase by RPI or to 4% of the ongoing portfolio value ... whichever is higher, in which case income tends to grow over time in real terms. The following image shows both, as applied to the FT250 total return index, however my main point of focus here is the standard SWR (just increase by inflation each year) and the 2009 figure for that, compared to HYP1's 2009 figure.



A accumulator/saver saves enough until they have 25x their yearly spending, and then starts a 4% SWR approach drawdown/retirement. With the amount increased by RPI each year then generally their income/spending is matched (assuming of course their personal inflation rate compares to RPI)

Far left 2009 year value of £3765 income amount, compared to HYP1's £3187 income amount for that year is a HYP1 15% shortfall i.e. desired/required spending had to be cut, and not just by a insignificant amount.

The counter is that in prior years on a like for like basis the HYP1 generated more income than the FT250 4% SWR approach, but that is respective to having started in a earlier year, if 2009 was your start year then the income would have fallen short, perhaps leaving no other option other than to sell shares at a time when share prices were down significantly (during 2008/9 financial crisis lows).

RPI IIRC is running at 14% recently, so with SWR you just increase last years £££ amount of income by 14% (assuming that inflation rate still holds at year end or whenever your yearly review is). On the same measure a 2021 HYP retiree with just the same nominal 2022 income as 2021 when RPI is running at 14% ... could require cutting their spending or otherwise somehow filling the shortfall. Yes there may be some whose income has risen, Dod for instance I believe has his up 10% recently, but for other HYP's their income may be down, made worse by prices (inflation) being up.

HYP1 and it particular timing of start date and choice of assets/stocks, has generally done well, however other choices of assets and/or start dates and there are apparent risks that can be mitigated via other approaches. Yes not even 4% SWR is guaranteed, nothing really is, however from a regular and inflation pacing consistent income basis the more broadly utilised SWR approach, at least as a guideline, is more tried/tested. And if you can lower that, to the likes of a 3.33% SWR rate (accumulate 33x spending before retiring) then you're near as guaranteed to likely have a regular inflation pacing income and hit a home run (see that either increasing in real terms over time by the modification I outlined earlier or leaving a significant legacy for heirs).

what was the primary objective of HYP1 that you believe has not been achieved? How could it have been better achieved?

IIRC HYP1 was proposed as a alternative to a annuity - that provide a regular inflation pacing income such that in that context HYP can (and has) at times/cases fallen short. SWR can potentially better achieve such a objective.

[Itsallaguess]

Yes I do know that Scottish Mutual (SMT) and Foreign and Colonial (FCIT) have never exactly been High Yield

And so utterly irrelevant for inclusion in the income-table you posted earlier...

https://www.lemonfool.co.uk/viewtopic.p ... 18#p548566

Other than to artificially provide the two lowest overall income figures, of course...

Cheers,

Itsallaguess

[IanTHughes]

Yes I do know that Scottish Mutual (SMT) and Foreign and Colonial (FCIT) have never exactly been High Yield

And so utterly irrelevant for inclusion in the income-table you posted earlier...

https://www.lemonfool.co.uk/viewtopic.p ... 18#p548566

Other than to artificially provide the two lowest overall income figures, of course...

I am sorry, unforgivable I know but, once again, I have missed your post detailing the high interest Investment Trusts that I should have included. Other then the ones that were included of course.

Could you perhaps point me that post?

What about the other Investment Trusts that I did include? Do you simply ignore them because they prove my point that HYP1 has NOT been a failure?


Ian

[Alaric]

IIRC HYP1 was proposed as a alternative to a annuity - that provide a regular inflation pacing income such that in that context HYP can (and has) at times/cases fallen short. SWR can potentially better achieve such a objective.

It's a live question to this day for the diminishing number of retirees who have a defined benefit pension scheme. They can trade up to a quarter of the notional value of their benefits for a tax free cash sum. Should they do this? If they do, where should they invest the proceeds, assuming no immediate desire to spend all the cash? If they didn't take the cash, their lifetime, probably indexed, income would be that much higher.

[csearle]

I'm not sure I'm very good at expressing myself but I'll have a go. This concept of picking your portfolio and then forgetting it versus picking your portfolio and rebalancing it once in a blue moon (voluntarily) has never ceased to give me cause for thought.

Imagine you had a portfolio and had left it alone as much as possible for a considerable number of years, such that, at the moment of consideration, it was imbalanced in some way. Imagine now a newcomer to the whole scene using the original criteria to select his/her portfolio. There would likely be a difference between the two. The latter portfolio would likely be much better balanced and therefore resilient.

The earlier portfolio holder would need to conduct (with some expense) some transactions to enjoy that same resilience. Would that resilience be worth the extra expense? The more out-of-kilter the portfolio; the more expensive it would be.

Also it is not just resilience. The income-generation, clearly key, can't be ignored. Following re-balancing rules so that the income is increased would (for the immediate term at least) ensure an out-performance in income.

C.

[1nvest]

IIRC HYP1 was proposed as a alternative to a annuity - that provide a regular inflation pacing income such that in that context HYP can (and has) at times/cases fallen short. SWR can potentially better achieve such a objective.

It's a live question to this day for the diminishing number of retirees who have a defined benefit pension scheme. They can trade up to a quarter of the notional value of their benefits for a tax free cash sum. Should they do this? If they do, where should they invest the proceeds, assuming no immediate desire to spend all the cash? If they didn't take the cash, their lifetime, probably indexed, income would be that much higher.

A sound economy might have the state acting as guarantor. Tax exempt 0% real inflation bonds provided by the government and workers desiring £20K/year for 30 years of retirement window save £600K and then retire with reasonable comfort/certainty. But as with defined benefits/inflation linked pensions etc. they were all raided or ended - to leave subsequent generations with much more uncertainties/insecurity. Little wonder the youth are more inclined to avoid stocks/gilts/bonds and instead prefer startup's/bitcoin/p2p ...etc.

[Itsallaguess]

HYP1 was set up to prove a point, but additionally we can look on HYP1 as an experiment.

The result is showing us that the strategy does provide a high and rising income from a bunch of shares almost any John Doe could choose: that was its base requirement.

But just as much value comes from what the experiment shows us about the variability of income, and suggests ways in which we can mitigate that.

It's interesting to look at the concentration of income and idly wonder what could be done about it to perhaps de-risk it a little, and one particular aspect that's regularly jumped out for me for many years now is just what a free ride that International Hotels (IHG) capital has been getting for years, whilst continuing to provide only around a 2% individual yield, and actually delivering absolutely nothing for the previous two years...

On a separate thread, there's discussion of a Credit Stuisse study that looked at using high-yield as an indicator of 'Value' type shares, and for me International Hotels is a HYP1 holding that might be looked at as having had it's value 'outed' for years now, and where a potential rotation of that worthwhile capital might now be put to more practical use in terms of delivering some proper income...

Cheers,

Itsallaguess

[Itsallaguess]

This concept of picking your portfolio and then forgetting it versus picking your portfolio and rebalancing it once in a blue moon (voluntarily) has never ceased to give me cause for thought.

The main issue HYP1 has had over the years is directly related to it's huge reliance on a very small number of individual holdings for the bulk of both income and capital.

I think it's worth recalling what Pyad himself said about diversification in one of his early Motley Fool articles -

How To Pick A High Yield Portfolio -

The most critical feature of HYP share selection is sector diversification in order to spread the risks around different industries.

Although a higher yield could be obtained by concentrating on certain sectors like utilities for example, the risks to the capital and income would be too high.

https://web.archive.org/web/20160609102 ... 050304.htm

Now, if an initial HYP selection process were to have thrown a wide sectoral net so as to perhaps 'capture eventual winners', then I don't think there could be the same push-back when looking at the current HYP1 make up, because it might well be argued that this is exactly what's happened since HYP1 inception, but that's not what the above HYP guidance says - it clearly talks about risks to capital and income if sector diversification is not achieved, and I think that's the single biggest hurdle to get over when we might look at HYP1 and ask if it's achieving it's own remit.

Cheers,

Itsallaguess

[1nvest]

I'm not sure I'm very good at expressing myself but I'll have a go. This concept of picking your portfolio and then forgetting it versus picking your portfolio and rebalancing it once in a blue moon (voluntarily) has never ceased to give me cause for thought.

If you buy a broad index fund then all of the rebalancing is integral. If a total return index then you can form your own dividends as/when and to the amounts you desire. Within a stock index you also have bond exposure such as firms issuing corporate bonds (they are short bonds, and long or short bonds broadly washes). You don't need emergency cash, £1M portfolio and some might keep £100K in cash for emergencies (90/10), but just as easily you can release cash from a 100% stock portfolio by swapping out how much cash you want for the same amount of 2x stock exposure. £1M portfolio, need £20K to pay for a new roof, but at a time when stocks had halved down to a £500K portfolio value ... and swap over to £460K of 1x stock, £20K of 2x stock, and you have £20K of cash in hand to pay for the roof whilst still holding £500K value of stock exposure (you weren't forced into having to 'sell low').

If you don't buy-the-market, and all of the firms and markets collective expertise as to how much FX, (short (corporate) bonds, etc that entails, then your betting that you can outsmart that collective. Your laptop versus the worlds largest collective super computer/human network.

Rebalancing your own portfolio picks especially with more recent tax rule changes can induce cost and tax events. And the probability of outperforming the market is low. Yes the law of averages will have some doing so, others lagging, after all its a 'average'.

Individual portfolio's will differ in outcome to others, which can lead to profit chasing, dumping one choice that has relatively lagged to buy into another that has performed better. Often that relative difference subsequently tends to narrow/reverse. Take a index such as the FT250 for instance, half of earnings from foreign, holds a bunch of Investment Trusts, includes a bunch of stocks that a HYP'er might buy ...etc.

Don't look for the needle, buy the haystack - Jack Bogle

[moorfield]

I'm not sure I'm very good at expressing myself but I'll have a go. This concept of picking your portfolio and then forgetting it versus picking your portfolio and rebalancing it once in a blue moon (voluntarily) has never ceased to give me cause for thought.

Imagine you had a portfolio and had left it alone as much as possible for a considerable number of years, such that, at the moment of consideration, it was imbalanced in some way. Imagine now a newcomer to the whole scene using the original criteria to select his/her portfolio. There would likely be a difference between the two. The latter portfolio would likely be much better balanced and therefore resilient.

The earlier portfolio holder would need to conduct (with some expense) some transactions to enjoy that same resilience. Would that resilience be worth the extra expense? The more out-of-kilter the portfolio; the more expensive it would be.

Also it is not just resilience. The income-generation, clearly key, can't be ignored. Following re-balancing rules so that the income is increased would (for the immediate term at least) ensure an out-performance in income.

C.

I recognize what you are getting at, and think that conundrum can be stated more simply:

A share held today is the same as a share bought today. A sort of Equivalence Principle, if you like. (Not Einstein's, but maybe Moorfield's)

A consequence of MEP then is that it necessitates portfolio re-balancing however frequently one wishes to apply it.

[Dod101]

My objection to the results of HYP1 are essentially that after 22 years or whatever it is it may be living up to the basic need for income but the derivation of that income would certainly leave me very concerned with 2/3rds of it coming from 3 shares. That is unrealistic for anyone living off their dividends but no one except me and maybe IAAG seems to recognise that. That is why I say that HYP1 is a failure.

Dod

[moorfield]

My objection to the results of HYP1 are essentially that after 22 years or whatever it is it may be living up to the basic need for income but the derivation of that income would certainly leave me very concerned with 2/3rds of it coming from 3 shares. That is unrealistic for anyone living off their dividends but no one except me and maybe IAAG seems to recognise that. That is why I say that HYP1 is a failure.

Dod

I think it is more nuanced that that. I don't think HYP is a failure per se, but it fails to avoid the risk of a volatile income. If PSN and RIO do not pay as generous specials next year (as pyad has acknowledged) then we are possibly back to an income of £9000. A volatile income is not what I want (I have learnt about myself during my own HYPish journey, and particularly not now an early retirement is visible over the horizon), which is why I am now more drawn to using ITs.

[Dod101]

Well OK. Call it nuanced if you like but I want in a real life situation to know about income and where it comes from. My real objection is the now total reliance on the income from three shares, two of which are unreliable.

Dod

[GoSeigen]

Total income to date is £123,518, averaging £5,614 per year which is 7.5% pa on the £75,000 cost.
[...]
The value of £154,754 is up 106.3% since the outset

Given the inauspicious starting point (grossly overvalued equity market) an IRR of 8.1% is a fair result I guess [c.f. my own active strategy mostly invested in gilts and corporate bonds over that period with IRR of c13.5%; if HYP1 had this performance it would be worth £1.2m in TR terms today].

I don't agree that concentration of income is a particular problem. It is a corollary of the outperformance of the particular shares that did well. c.f. a single bond in my portfolio contributes 30-50% of the income... and still has a higher yield at 7.5% than HYP1's yield of 3.6%.


My criticism of HYP is and always has been that it didn't see the wood for the trees: it was buying into an equity mania of the day, locking the investor into a share straight jacket right at the moment when shares were generationally overpriced, and ignoring the extraordinary value available elsewhere. High yield was no more than the shiny ball in the shell game, distracting the investor from what actually was going on.


GS

[Arborbridge]

My objection to the results of HYP1 are essentially that after 22 years or whatever it is it may be living up to the basic need for income but the derivation of that income would certainly leave me very concerned with 2/3rds of it coming from 3 shares. That is unrealistic for anyone living off their dividends but no one except me and maybe IAAG seems to recognise that. That is why I say that HYP1 is a failure.

Dod

That is unrealistic for anyone living off their dividends but no one except me and maybe IAAG seems to recognise that.

I think you are wrong there. Many of the current HYPers here recognise the problem and have applied practical ways around it. This was all discussed a decade ago (and more) on TMF and various limits and mitigations were proposed by posters such as BSD, Gengulphus and TJH. TJH and myself are very clear and publish changes as they happen, and why.
So the net of practical people recognising this problem is far wider than you and IAAG - ironically neither of whom attempt to run a HYP. AFAIK.

Arb.

[Dod101]

My objection to the results of HYP1 are essentially that after 22 years or whatever it is it may be living up to the basic need for income but the derivation of that income would certainly leave me very concerned with 2/3rds of it coming from 3 shares. That is unrealistic for anyone living off their dividends but no one except me and maybe IAAG seems to recognise that. That is why I say that HYP1 is a failure.

Dod

That is unrealistic for anyone living off their dividends but no one except me and maybe IAAG seems to recognise that.

I think you are wrong there. Many of the current HYPers here recognise the problem and have applied practical ways around it. This was all discussed a decade ago (and more) on TMF and various limits and mitigations were proposed by posters such as BSD, Gengulphus and TJH. TJH and myself are very clear and publish changes as they happen, and why.
So the net of practical people recognising this problem is far wider than you and IAAG - ironically neither of whom attempt to run a HYP. AFAIK.

Arb.

Meaning therefore that HYP1 as it stands is a failure.

Dod