New Money Allocation - Southbank Investment Research

This topic has 2 replies, 2 voices, and was last updated 7 years, 11 months ago by Ronald Wilson.

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30th May 2017 at 2:40 pm #438000

Ronald Wilson
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Hi Stephen , Please can you help clarify part of the strategy around HYP for me ( I have looked around and apologies if I’ve missed it )

Ive been following HYP for about a year now in one of my ISA’s , I hold a lump sum in a well known Wealth preservation Investment trust within this ISA , which I sell a portion of each month and allocate it to your HYP recommendations , with the view to eventually be out the I.T and fully into HYP, all within my ISA

My First question is now HYP6 is closed and we are onto HYP7 , should I be allocating my monthly amount to rebalancing some of the lower value shares in HYP6 ( as long as they are still a buy ) or allocating the money to the HYP7 recommendations as I have done.

As they are in the same ISA , Ive allocated money to 3 shares in HYP 7 ( 4 really but i split BP and RDSB as you recommend ) who’s value has gone up , should I have ignored HYP7 and rebalanced HYP6 shares as I free up monies to do so.

Second question , once portfolio is fully invested in a HYP , and there is no more capital to add , should a rebalancing exercise be completed annually as with most other strategies.

Many thanks for taking the time to answer this and for your recommendations so far , all going rather well, Appreciated

Ron

30th May 2017 at 4:25 pm #438016

Stephen Bland
Moderator

Taking your last question first, I don’t advocate rebalancing annually or any other frequency. Rebalancing is actually a form of voluntary trading and there is no voluntary trading in the HYP strategy as I promote it. Also, rebalancing will involve costs.

The reason I am anti is that I believe what I call “market trading” will work to the advantage of HYPers long term by enforcing a certain amount of reorganisation but at optimum values, better than is likely to be obtained on balance by HYPers rebalancing or otherwise tinkering. By market trading I mean corporate activity such as bids, cash returns, spin-offs and so on, the market trading for you.

On your first points if you have a complete HYP6, then with new money whatever its source I’d advise prioritising new sectors if you find any in HYP7 or any of my earlier selections as shown on the Dividend Schedule where still Buys at the time you have the cash available. If not, go for top-ups.

30th May 2017 at 6:40 pm #438021

Ronald Wilson
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Thank you Stephen for your update , I now understand ,will follow your suggestions

Thanks again

R.
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