How to invest £10,000 for income

If you are lucky enough to have a lump sum to invest into the stock market then there are a number of options to choose from.

But perhaps the first question you need to ask yourself is “why am I investing in the stock market”?

You could be investing for long-term capital growth, you could be investing to generate income or you could be doing a little of both.

Investing for growing dividend income

In this article we will concentrate on investing for income.

With interest rates at all-time lows, putting your £10,000 in the bank is likely to yield less than 0.5% in interest, unless you are willing to lock up your capital for a year or more – but even then you will have to search hard to find any institution paying much over 1%.

So, putting your money in the bank could generate less that £50 in interest over the year.
Inflation dropped to 0.5% in August, down from 1.1% in July, so your interest income would be wiped out by inflation meaning the spending power of your £10,000 after one year is…. £10,000!

So where else can we look for a higher level of return?

Continue reading “How to invest £10,000 for income”

Where should you invest £10,000?

If you’re lucky enough to have £10,000 to invest then you may well be wondering where to invest your money.

For many investors, investing for income and reinvesting this income means they benefit from the compound effect of the reinvested income earning its own income in years to come.

In an article in The Sunday Times, Maike Currie from Fidelity suggests splitting your £10,000 investment as follows. Continue reading “Where should you invest £10,000?”

The dividends are coming in thick and fast

A couple of weeks ago I was listening to a Motley Fool podcast and the host, David Kuo, mentioned that he liked this time of year as many of the companies he holds shares in pay dividends.

He wasn’t wrong.

It seems that every day I look at the cash element of my share dealing account and see another dividend payment has boosted the balance.

In the last 10 days I have received dividend payments from the likes of Legal & General, Prudential, RSA, Capita, BBA Aviation, Barclays and Standard Life. Today it was the turn of Admiral, BAE Systems, International Personal Finance, Weir Group and ITV.

So some of this dividend income was put back into shares today.

The Admiral Group dividend was used to buy more Admiral shares and reduce my average buying price to 1,291p too.

Other purchases were LLPC (LloydsTSB 9.25% Non-cum Pref Shares), Clarke T. (CTO), Polo Resources, PPHE Hotel Group (tipped in today’s Investors Chronicle magazine), and LLOY (LloydsTSB).

Markets around the world continued to decline today. But as income investing becomes a more and more dominant theme in the Amateur Investor portfolio, the daily ups and downs become less of a concern when there’s a constant stream of dividend payments hitting my dealing account.

Have a happy Jubilee weekend.

 

Lloyds Banking Group 6.475% Non-Cum Pref Shares (LLPE)

I’m already a holder of the  Lloyds Banking Group 9.25% Non-Cum Irredeemable Pref Shares (LLPC) which I purchased in two lots back in September and October 2011. At an average buying price of 70.75p, today’s price of 92.5p represents a profit of over 30%, and still the prospect of 9.25p income for every share held.

So when I read a recent article on the excellent DIY Income Investor blog entitled “Portfolio Buy: Lloyds Banking Group 6.475% Non-Cum Pref Shares (LLPE)“, I decided to see if it was worth adding some LLPE to my LLPC holding.

The current price (73.95p at the time of writing) represents a yield of over 8.75%.
My LLPC holding is currently yielding 13.07% if you use the buying price of 70.75p, or 10% if you use the current price of 92.5p – so LLPE isn’t quite as attractive on the face of it, but 8.75% isn’t too shabby all the same!

I must admit to not really weighing up the pros and cons of LLPE v LLPC, but unless I’m missing something then LLPC’s yield of 10% is better than LLPE’s 8.75%. If I am missing something perhaps some of our readers could let us know what they think.

And rather than repeating what the DIY Income Investor has already said on the subject, why not read his (assuming he is a he and not a she) article, and take some time to have a look through his excellent blog while you are there.

2012 Share Tips and some dividend re-investing

2012 Share Tips

This is the time of year when the financial magazines (Investors Chronicle, Shares etc.), brokers, newspapers and share tipsters suggest what shares we should all be buying for 2012.

You can trawl through the various newspapers, magazines and websites to find these 2012 share tips, or you can keep an eye on the 2012 share tips section of the ShareTips365 website. It’s being updated regularly as these 2012 share tips are announced.

Continue reading “2012 Share Tips and some dividend re-investing”

United Utilities and some more dividend income

I bought into United Utilities earlier this week for the yield. And today I increased that holding with a further purchase at 603.33p bringing muy average buying price down from 617p to 604.7p

I’m keen to buy more United Utilities shares, and will be watching the share price closely with a view to further purchases around the 540p level.

RSA Insurance Dividend

A nice dividend from RSA appeared in my trading account today. I’ll be looking to invest it tomorrow.

Ex Dividend Dates

Don’t forget, if you’re interested in investing in shares for dividend income, a list of up-coming ex dividend dates is regularly updated on the Amateur Investor website.

Anyway, that’s enough about property investing, back to the plot.

Earlier I posted about a visit I’d made today to see a property for sale in Avebury, Wiltshire. Well after that brief departure from the task in hand, back to being an Amateur Investor.

Thomas Cook

Thomas Cook (TCG) shares have had a torrid day. I just hope none of you are big holders of their shares at the moment.

Continue reading “Anyway, that’s enough about property investing, back to the plot.”