4 February 2011
Private investors piling into shares
Launch of Dividend Income Portfolio is Imminent!
With some City pundits forecasting the FTSE100 ending at 7000 by the end of the year, you may say that we are running out of lowly valued high yielding quality companies.
At the end of last year, as savings rates fell to near record lows, private investors bought shares at the highest level in over a decade.
According to recent figures, published by the Investment Management Association, during December 2010 a net £1.72 billion was spent by retail investors on shares, the highest amount in a single month since April 2000 at the height of the dotcom boom.
Richard Saunders, chief executive at the Investment Management Association, said: "Consumers continued to increase their investments at record rates in 2010." In comparison to 2009, there was £7.5 billion of net retail sales of equities, up from £7.3 billion.
Some experts, as well as Early Retirement Investor.com, fear that not only the numbers of retail investors piling into the stock market, but also current levels of the stock market are getting into "bubble territory".
In Just six months, the FTSE 100 index has shot up from 4,800 to hit 6,056 during January, 2010. That's a 26% increase!
On the basis of what, you may ask yourself? Most of the impact of the austerity cuts in many countries still awaits us . . .
Other experts have expressed views that the stock market is not (yet?) in "bubble territory" but still confirm that investors are taking on "a lot of risk" by moving money from saving accounts into shares.
Running out of quality companies?
With savers and investors being persuaded by the ďfinancialĒ media to move into companies that pay dividends, it will become increasingly difficult to find under-valued high yielding quality companies, unless of course you utilise a proven strategy to unearth companies when they are truly undervalued, as mentioned in an earlier issue of Dividend Alerts.
But what if you still have money that you want to put into long-term equities Right NOW and you need an above inflation safe dividend yield: what and where should you be looking at right now?
As the latest Capita Registrar Dividend Report outlined, the general outlook for dividends appears to be improving for 2011. Companies are increasing their dividends, while some others are re-instating dividends, albeit at (much) lower level than before.
That is good news, in itself!
In particular, if, for whatever reason share prices from high quality companies with steady dividends start to decrease for the (according to some respected commentators) "final leg down", later this year.
At least I am ready to take advantage of quality companies based at truly undervalued share prices. Because we have cash sitting idle in my portfolio! I hope you can join me to.
So, as long as we all can agree that everybodyís long term investment goals vary, I think now is a good moment to let you know that the . . .
Launch of the Dividend Income Portfolio is Imminent!
Iím so serious about helping you grow your wealth through these tricky times. . . Iím putting £70,000 of my own money where my mouth is.
I am creating the Dividend Income Portfolio at Dividend Income Investor.com because several readers of Dividend Alerts told me that they needed more than just investment write-ups ó they need the confidence to follow them.
Now, you never have to wonder if Iíd buy these companies myself ó because I AM buying them myself, with my own money!
Hereís how it works: I have opened an ISA brokerage account at TD Waterhouse, in order to be able to invest in both London listed stocks as well as shares listed on a number of stock exchanges abroad.
I have sold out the majority of stocks in another ISA, earlier in January, and transferred just over £70,000 of cash into the TD Waterhouse ISA account, as well as two high yielding stocks.
Right now, my £70,000+ is sitting there in cash, waiting for two things to happen:
- early next week, one trading day before I start investing, Dividend Alerts subscribers will get a 24-hour head-start alert when they will receive the very first edition of the Dividend Income Report for free; not only disclosing the name of the company, but also the reasoning behind why Iím going to buy it, and for how much
- second, I am waiting for the sign-up/subscription part of the web site to be finalised and fully tested prior to inviting you to become one of our charter subscribers at a much reduced rate so that you can start accessing the evolving premium content part at Dividend Investor.com.
Once Dividend Income Investor.com is fully operational youíll be able to start enjoying ALL the benefits of your subscription, including:
- Dividend Income Portfolio
- Dividend Income Profiles
- Dividend Income Report
- Dividend Income News
- Dividend Income Tables of overvalued and undervalued companies as we construct our portfolio.
Of course, you donít have to invest the same amount I am investing. Also, you don't have to invest at all! Nor do you need an ISA account at TD Waterhouse.
Why Iíve Decided To Let You
See Everything I Buy or Sell
BEFORE I Buy or Sell
Normally, the investments in a share portfolio like mine are strictly private. Youíd never see the actual transactions ó let alone get an advance alert of what the investor is going to buy or sell.
Iíve invested £70,000+ hard cash in this value-based portfolio because my LARGER objective is to help you grow your wealth, starting right now in this market. . . and then to help you grow your wealth again during and after we touch rock bottom and up again.
Thatís why Iím opening up my portfolio to all investors who become subscribers of our premium content at Dividend Income Investor.com . . .
They will be able to see how my actual portfolio develops, including all dividend receipts, profits and losses.
Plus, if you like what you see, you can invest before I invest. That way, if anyone has a strategic timing advantage, itís subscribers like you.
The Ultimate in Confident Investing
You can be 100% assured that every investment I make in my Dividend Income Portfolio. . .
- will be made in full compliance with my investment criteria
- if you wish, can be bought quickly and easily in your existing brokerage account, and . . .
- will be carefully balanced in a diversified core portfolio for enhanced safety, dividend growth and profit potential.
Remember, weíre in this together!
Iím so confident to build wealth using our investment research process that Iíve put more than £70,000 of my own cash into this portfolio.
Shouldnít that tell you something?
I sincerely hope it does.
As always, we appreciate your feedback.
Thank you for reading.
Watch out for the first edition of Dividend Income Report
Until next time.
Early Retirement Investor.com
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We do not and will not provide personalised investment or financial advice, or individually advocate the purchase or sale of any security or investment. We publish opinionated information about the stock market and companies that we believe our subscribers may be interested in.
There is no guarantee that dividends will be paid. Figures are calculated using the closing prices. All gains are gross, and returns will be affected by dividend payments, dealing costs and taxes. Profits from share dealing are a form of income and subject to taxation. Tax treatment depends on individual circumstances and may be subject to change in the future. Editors or contributors may have an interest in shares featured.
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