Category Archives : Practical Advice on Investing

Articles on the practical aspects of investing. Articles show where to put your money. If you want to know how to invest, look at the Investing Theory sub menu


Taking Money Off The Table By Trimming Share Positions

Over the past week, my online broker had technical difficulties with their website which meant that I was unable to deal in certain securities. Rather than sit and do nothing like most customers, I decided to call them up to voice my disappointment at the level of service. As a result, I got two free trades which was a win from my perspective.This provided a great opportunity to clean up my portfolio by selling my Telefonica position and trimming G4S as its share price has run ahead of its valuation. Let’s start with the outright sale first. Telefonica has risen 21% since I bought it one year ago and I […]


Dividend Reinvestment – A Way To Juice Investment Returns + Great candidates 1

Dividend Reinvestment is one of the most important concepts when it comes to investing. It is a way of owning more shares or units in a fund without putting your hand in your pocket for more cash beyond the original investment. It is a way of getting shares for free. To see how dividend re-investment works, take a look at the following. Say you own£10,000 worth of shares in Company A. This pays a 10% dividend each year, equal to £1,00 on your £10,000 investment. If you reinvest that £1000 in more Company A shares, you will have an investment worth £11,000. Fast forward one year and your 10% yield […]


Is Paypoint Worth a Punt? Great Financially But Does It Have A Future.

Whenever I run stock screens to try and find new shares worth investing in, Paypoint always seems to pop-up. The company has great Returns on Capital, strong Free-Cash Flows and a Bullet Proof balance Sheet. But the one thing that has always stopped me from investing in the company is the unknowns about its future i.e. the implications of its business model in a cashless world. Paypoint is retail payment processor that allows customers to pay utility bills, pay council house rents, buy lottery tickets, top up the credit on a mobile phone and send money to other people via its terminals which are found in local shops. The Financials […]


Lindsell Train Investment Trust (LTI) Full Portfolio Breakdown – UK, Global and Japan Equity

The Lindsell Train Investment Trust has had a remarkable run over the last 10 years. Over this time, it has produced gains of just over 400% or 16% per annum. This is simply amazing. It is no wonder the investment trust is trading at a 15% premium to the value of shares it holds. If you think a 15% premium is crazy, just over a year ago it was trading at a 60% premium. The performance of the LindsellTrain Investment Trust and its exceptional returns haven’t gone unnoticed and I have had a number of readers contact me asking what individual stocks the fund holds. As such, I have done […]


Shire Stock Purchase – The Importance Of Low Dividend Yield and Fast Growth In A Portfolio

Regular readers will know that I have been a big fan of Shire as of late. The company has fantastic growth, a pipeline that is envied by other biotech’s and a management team that is astute and rational. The best part about Shire is the valuation with shares trading hands at a P/E of less than 13. When a company looks attractive, I always ask myself ‘is there something I am missing? Is there something that I am not seeing that is making investors trade the stock at such a cheap valuation relative to its peers.’ With Shire, I think the answer is that investors are overlooking this stock due […]


10 Cheap Stocks To Buy Using Different Valuation Metrics 4

Everybody loves to spot a bargain and investors scouring stocks are no different. But what many new investors fails to understand is that there is a difference between shares which are ‘cheap’ and those which offer genuine value. To help in identifying undervalued stocks, there are a number of ratios to look at. In this article, we will see which shares are cheap based on P/E ratios, PEG ratios and Price to Book ratios 1. Price to Earnings Ratio (P/E) P/E Ratio = current share price / earnings per share If Company A currently has a share price of 100p and is forecast to generate earnings per share of 20p […]


GlaxoSmithKline (GSK) Stock Purchases – Pound Cost Averaging My Way In To This Healthcare Giant 1

When I first decided to become a dividend growth investor, GSK is one of the first stocks I looked at. The company met the criteria beginner investors should look for. Namely, GSK has strong Free Cash Flow, a bullet proof balance sheet, good returns on capital (12%), strong returns on equity (15%) is an easy to understand business,has stable and predictable growth, has economic moats in its consumer business and it pays a hefty dividend. What also swung me to looking at GSK was the number of income fund managers holding this stock in their portfolio thus showing that the company is highly regarded in the wealth management world. The […]


SSE Stock Purchase: Utility Shares Are For Yield and Inflation

Inflation has been non-existent over the past few years. As recently as 18 months ago, the inflation rate was 0%. But this is all changing and inflation over the past few months has jumped to 2.3%. And it is set to rise further as the weak pound, following the Brexit vote, makes imports more expensive for us to buy. With inflation returning, now is a good time to start thinking about buying into assets that will protect the value of money as the cost of living increases. Utility companies are a great way to protect against inflation as the prices they charge are regulated and linked to the Retail Price […]


What Stocks and Shares Should Beginner Investors Buy – 8 Factors To Look At 2

When it comes to modern day investing advice, the majority of newbie investors are given the advice of sticking their money into a low cost index fund such as the FTSE100 or S&P500. THE rise of passive investing has been great for the individual investor as it means they can get wide diversification for low cost with a single purchase. The low cost is the key part and that is why passive indexes have outperformed the more actively managed and more expensive mutual funds. If you are an investor with no time, can’t tell the difference between a balance sheet and profit and loss account and don’t want to do […]


Which Royal Dutch Shell Shares To Buy To Avoid Paying Dividend Withholding Tax – RDSA Vs RDSB

There are a number of companies that are dual listed i.e. there stocks are traded in different countries. For the biggest companies, the price of the stock is usually the same on the two or more exchanges the stock is listed on. One might think that it does not really matter on which countries exchange you buy the stock. But as an individual investor, it is imperative you buy a stock you are after on the right exchange – by this I mean buying the stock in the country with a lower dividend withholding tax rate for instance. Let’s take Royal Dutch Shell for instance. It is a dual listed […]