The Lemon Fool

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i need to sell about half my holdings to pay for a property in about two months time.

the remains to be invested for best total returns .

portfolio below ordered by weightings .

prefer lower risk now - aged into 80's.

any comments on merits / best disposals very welcome .

thanks

anotherdavid

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VUKE
BRWM
CTY
SMT
GREGGS
VMID
BGUK
FGT
HSL
MNKS
MWY
MRC
MUT
GAMES WORKSHOP
HARWORTH
HMEF
IHCU
VFEM
ATST
PHI
DIG
MYI
BREEDON
COMPUTACENTER
HAT
WATKIN JONES
HMJP
VUSA
SSON
BGEU
BNKR
FCIT
HDIV
COHORT
CALNEX
BRICKABILITY
CRANEWARE
HALFORDS
LOUNGERS
NEXT FIFTEEN
RAMSDENS
QUARTIX
RWS
SRC
SOMEREO
YOUNGS

i can see there are too many !

apologies for EPIC's

You don't mention any tax implications, presumably most or all are ISAd?


If so, then at this current point in time, I'd sell the ones showing the smallest percentage drops over the last month or so - the ones least affected by recent events.

If the others are for long term (or longer term returns) then they are more likely to recover stronger once things are stable in Ukraine.

I'm sure someone will be along soon with an equally valid arguement to tell you to do the opposite.

Paul

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sorry , should have said , all in ISA's

You could sell those with the lowest value, this would have the advantage of leaving you less than half the original holdings if your desire is to reduce the total number of securities hence admin.
I'm hopeless at selling, I generally tidy up using tax as my pointer as I still hold unsheltered holdings. I rarely sell in my ISA but occasionally use limit orders to catch highs. As to which to hold for best total return if only I knew.

I was struck by the fact that I hadn't heard of most of the bottom third of the list, so I am guessing that not only are they smaller holdings, but of smaller companies etc - Brickability? etc etc.

So I would start by simplifying the problem and sell all of the holdings below FCIT.
Then of the remainder, I would assess how much more you need to sell to meet the amount you need to raise.
Then analyse the remainder for diversity, and pick those market sectors or super sectors where you have duplication, and reduce that

HTH
tuk020

Risk - well any individual shares are likely higher risk than a collective so they should be considered for sale.

Single Companies
What percentage do you release by selling these single company shareholdings ?

Income ITs/ETFS
Quite a bit of duplication...VUKE/DIG/CTY/MUT - all UK biased. I'd be tempted to cull one or two. I'd hold onto the BRWM, HDIV and MYI as they are "not UK biased " income source.


Growth ITs
I'd dump em all, take what money you need and then slowly invest in a World Tracker with the residual - VWRP or similar.

Rank by yield and sell, starting with those with the lowest yield until you have the amount that you want.

Alternatively rank by weight and sell alternately from highest and lowest ends until you have what you want.

Failing that, take a pin...

TJH

jackdaww wrote:I need to sell about half my holdings ...

Is this temporary? Will you then be selling a property to recoup the funds?
So, do you really have to sell?

I did the same in 2012, and have since regretted the loss of irreplaceable tax shelter.

If you have other assets you can sell, I would give them preference.

There is obviously some tidying up that you could do, but within the ISAs.

A point of view.

V8

88V8 wrote:

jackdaww wrote:I need to sell about half my holdings ...

Is this temporary? Will you then be selling a property to recoup the funds?
So, do you really have to sell?

I did the same in 2012, and have since regretted the loss of irreplaceable tax shelter.

If you have other assets you can sell, I would give them preference.

There is obviously some tidying up that you could do, but within the ISAs.

A point of view.

V8

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thanks

no other assets to sell .

eventually i will sell my current property but will have lost half my ISA .

but will still have the CGT allowance .

jackdaww wrote:
eventually i will sell my current property but will have lost half my ISA .

but will still have the CGT allowance .

Two things to note, you will pay an extra 3% Stamp Duty on the new property, but can reclaim that providing you sell your first property within 3 years.

There should be no CGT to pay on the sale of your current property if it is you main home, unless it was rented out at some point and you haven't lived there very long in comparisson.

Unless you are also selling non sheltered holding as well?

Paul

Hi Jackdaww.

I agree with the combined tenor of some of the above replies, e.g. you could

• 1. Sort by yield
  2. Sell the single company holdings from the lowest yield upwards (i.e. don't sell FCIT, HDIV etc)
  3. Until you get the amount you need

That should result in a much simplified, relatively balanced (at least from the starting point and/or what it might have been) outcome, which will yield OK. This latter point wouldn't normally matter to me, but

• A. It's a least as good a method as the proverbial pin, and
  B. As I've speculated elsewhere, I think it might be a good period for high yielding stocks in the near term

Regards, Newroad

tjh290633 wrote:Rank by yield and sell, starting with those with the lowest yield until you have the amount that you want.

Alternatively rank by weight and sell alternately from highest and lowest ends until you have what you want.

Failing that, take a pin...

TJH

Given the aims of the remaining portfolio is to provide "best total returns" I find that kind of advice bizarre.

dealtn wrote:

tjh290633 wrote:Rank by yield and sell, starting with those with the lowest yield until you have the amount that you want.

Alternatively rank by weight and sell alternately from highest and lowest ends until you have what you want.

Failing that, take a pin...

TJH

Given the aims of the remaining portfolio is to provide "best total returns" I find that kind of advice bizarre.

No doubt you would. Neither you nor I know which approach to investing will provide the best total return in the coming years.

How exactly would you go about it? I might find your proposals bizarre, but they might be a useful contribution to the OP's thoughts.

TJH

tjh290633 wrote:

dealtn wrote: Given the aims of the remaining portfolio is to provide "best total returns" I find that kind of advice bizarre.

No doubt you would. Neither you nor I know which approach to investing will provide the best total return in the coming years.

How exactly would you go about it? I might find your proposals bizarre, but they might be a useful contribution to the OP's thoughts.

TJH

To start with I wouldn't apply a harsh filter that has nothing to do with shareholder return, such as earnings, or return on capital, or cashflow, but instead was a non-return based one such as dividend yield.

Would you not think it bizarre were I to propose a "returns" based formula as a means of selecting for an Income strategy? Why the confusion when it is the other way round?

Now if your definition of "yield" wasn't a dividend yield, but was an earnings yield, or a return on capital yield, I would see merit. But I know that isn't what you meant.

dealtn wrote: To start with I wouldn't apply a harsh filter that has nothing to do with shareholder return, such as earnings, or return on capital, or cashflow, but instead was a non-return based one such as dividend yield.

Would you not think it bizarre were I to propose a "returns" based formula as a means of selecting for an Income strategy? Why the confusion when it is the other way round?

Now if your definition of "yield" wasn't a dividend yield, but was an earnings yield, or a return on capital yield, I would see merit. But I know that isn't what you meant.

I'm waiting to see your proposal for at least one method. I've given three. Why not make a start instead of criticising?

TJH

tjh290633 wrote:

dealtn wrote: To start with I wouldn't apply a harsh filter that has nothing to do with shareholder return, such as earnings, or return on capital, or cashflow, but instead was a non-return based one such as dividend yield.

Would you not think it bizarre were I to propose a "returns" based formula as a means of selecting for an Income strategy? Why the confusion when it is the other way round?

Now if your definition of "yield" wasn't a dividend yield, but was an earnings yield, or a return on capital yield, I would see merit. But I know that isn't what you meant.

I'm waiting to see your proposal for at least one method. I've given three. Why not make a start instead of criticising?

TJH

I also proposed 3 methods to filter.

dealtn wrote:I also proposed 3 methods to filter.

Did you? Where? They are not in this topic.

TJH

I suggested filtering on a companies "earnings", or on its "return on capital", or based on its "cashflow"

All 3 of those are analytical tools to assess a company's past returns, which given there was a total returns strategy requirement makes more sense than using dividends which are determined by a Board of Directors only incompletely connected to earnings or returns.

Were the OP looking at an income strategy I would suggest dividends, and analysis on the likely growth in dividends using such as Dividend Cover, and PEG. But he didn't. So I wouldn't, and can't understand why anyone else would.

What you said was:

dealtn wrote:To start with I wouldn't apply a harsh filter that has nothing to do with shareholder return, such as earnings, or return on capital, or cashflow, but instead was a non-return based one such as dividend yield.

That to me read that you would not apply a filter based on earnings, ROC or cash flow.

Then you said

dealtn wrote:Now if your definition of "yield" wasn't a dividend yield, but was an earnings yield, or a return on capital yield, I would see merit. But I know that isn't what you meant.

You didn't actually propose a method.

Your suggestion is that dividends are not part of shareholder return, when they are an essential part of total return.

TJH

One other comment...crap timing!