I figured that title would attract a huge Readership to this Blog - I nearly went with ‘Free Bitcoins’ as I thought that would drive devourers of Reading Material on the Web utterly insane with their frenzy to take advantage of such an appealing offer.
I nearly went with something along the lines of ‘Actresses and Bishops’ because that tends to draw a big Readership also but I didn’t think I could stretch what seems to be the dull subject of Dividends that far. I also know that a small chunk of Readers are under 18 so I need to keep it clean (ish). I have actually stolen the title from my mate Cappy (@SmallCappy on Twitter) who always comes up with this term when we mention the wonderful phenomenon of nature that is the humble Dividend Payment. He has nailed it with such a description and I am fully onboard with his use of this term and I shamelessly pinch it whenever I can (you should have copyrighted it when you had the chance, mate !!).
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This is the Final Part of a Series of Blogs - if this is the first time you have been unlucky enough to find this Series then Links to the earlier Parts are at the bottom of this one if you scroll down.
Conclusion I am hoping that I have done these Blogs in a way which Readers can makes sense of and will enable them to think about how to go about such Index Trading themselves if the urge takes hold. You can use ETFs like XUKS (a way of Shorting the FTSE100 that you buy and sell like a Share. To go Long on the FTSE100 you could use something like ISF I think - you will need to check this) instead of Spreadbets and of course things like CFDs will give a similar result (but these come with Tax disadvantages when compared to Spreadbets). But it goes without saying (but I will say it anyway !!) if you do fancy having a go you must be extremely careful and start with a Practice Account perhaps or at least start with very low Position Sizes - don’t go betting £1000 a Point on the FTSE100 on your first Trade !! (that would be equivalent to about £7.2m of Exposure by the way !!!). Before I finish the Blog Series off, I just want to stress the following Key Points:
This is the Final Bit of a Series of Blogs on this Subject which have been very highly praised (up until this one anyway which might be a total let-down) and if you have not read the others there are links to them here:
http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-1-of-4 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-2-of-4 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-3-of-5 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-4-of-5 Stage 6 - 2018 Onwards - Where next? I can only write this Section with the thinking I currently have with regards to how my future Learning is going to pan out and to focus on the elements that I am putting my efforts into as we speak or things that I have made a conscious decision to address in the near future. As Readers may have realised from what I have written so far in this Blog Series, there have been several times in my Investing Career where I have flatlined or been unable to instantly find a new direction - but as things turned out something always came up and re-invigorated my motivation and drive to keep on Learning and, more importantly, improving. With what I have just written in mind, here is my current thinking on where my Learning Efforts are going to be focused in coming years, but I am sure the reality will diverge from this somewhat:
Stage 5 - 2015 to 2018 - Well into the Bull Run
Here comes The WheelieDealer. More sophisticated Trading Tricks and focus on Psychology. Enforced Discipline.
Stage 4 - 2011 to 2015 - Post Credit Crunch Recovery
‘Retirement’ and Learning to Fly. Experimenting and codifying an Approach.
Stage 2 - 2004 to 2008 - The Calm before the Credit Crunch
Starting to get a rough idea about what was going on. Discovered Value Investing. First Leveraged Trades.
This Blog, the first of a Series, has had a pretty slow development from a simple observation about how many people I see/know go about their Investing to something far larger and much more involved - yet, at this stage of starting to type, I am not really convinced that it will coalesce into a coherent whole - I can see this one being abandoned at some point and me just publishing it anyway in whatever state it is in and Readers can make of it what they will !!
Thankfully since typing the above I have made a lot more progress on the full draft and there is a reasonable chance that it might turn out not too dire. In fact, it might actually be quite helpful for many Readers. I have noticed with regularity how even very highly experienced and successful and wealthy Investors I know seem to lack a final conviction / belief in their own ideas and often it just needs someone like me to say “yes, I like the look of that Stock and it is probably well worth buying” or to actually buy it myself, to get them to finally take the plunge and ‘Pull the Trigger’ to bring it into their Portfolio. In simple terms, some people need reassurance despite knowing what to do.
Example Stocks for use in an Income Portfolio
I have been thinking about how to lay out this Blog for a while and now I am actually making a start on it I am not totally sure I am going about it in the best way, but I will crack on and see how it plays out. I realise it is going to be a Blog that Readers are particularly interested in so I will try and do it in a logical and clear way. The ScreenShot below is taken from the extremely flexible ShareScope software I subscribe to and it you look at the Column on the Far Left (oh no, Jezza Corbyn !!) it gives a list of the FTSE350 Sectors and my plan (unless it changes as I go through) is to go through each of these Sectors with regards to their suitability for an Income Portfolio and perhaps to name some Stocks which are of particular interest within the appropriate Sectors. Judging by the scale of the task ahead I expect to be splitting this task over 2 Final Blogs for the Income Portfolio Series (hopefully the Crowning Glory and not a dismal Damp Squid of an ending….too much Blue Planet 2?)
Getting Started
This probably isn’t a definitive or particularly detailed list and I’m sure you will find other tasks/actions you need to do to get up and running properly. Many of these will come from reading the Text in my Blog Series and also from your own particular requirements, but these are a rough set of Guidelines to give you some idea of what needs to be done to get going with your Income Portfolio: 1. If you are totally new to this then buy Naked Trader Book - chances are if you have already dabbled in Stocks you will have read Robbie Burn’s excellent book, but if this is entirely new to you, then I recommend you nip over to ‘Wheelie’s Bookshop’ and get a copy. It is pretty cheap really and would definitely be money well spent. Much of it will be more related to Small Stocks and an Approach focused on capturing Capital Gains rather than the Dividend Payments but it is still pretty much the clearest and most simple book on Investing/Trading and it covers a lot of important concepts in far more detail than I can in this Blog Series. There are also a lot of complementary bits like Robbie’s explanation of how he uses the ADVFN News feature to analyse Company Trading Updates etc. There is also quite a bit on the detailed process of how to Buy and Sell a Share and stuff like that.
If you haven’t read Parts 1 and 2 yet, then scroll back down my Blog Page a tiny bit and you should find them very easily.
Features of an ideal Dividend Stock There are many aspects and features that make a particular Stock suitable for an Income Portfolio - the following spring to mind as things to consider:
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