| | | | Dear Fellow Investor,
If you're investing in large, market leading companies for a combination of dividend income and capital gains, you might be interested in this story.
I first invested in Reckitt Benckiser, and added it to the UK Value Investor Model Portfolio, back in April 2011.
The yield at the time was a mediocre 3.5%, but the company had a solid and reliable track record of inflation beating growth, so my expectation was that the dividend, and the effective yield on my purchase price, would increase.
It did - but the share price also increased, and increased faster than both earnings and dividends.
In fact, the share price gained 39.3% in just 2 years, pushing the dividend yield down to 2.9%. In the end I decided to sell, turn the paper gains into cash (along with the 7.9% I'd received in dividends), and am now looking to invest those gains somewhere else, probably with a significantly higher yield.
You can read the full story of why I bought those shares, and why I've just sold them, in this week's article:
Why I sold my Reckitt Benckiser shares
(and if you want even more details on why I bought those shares back in 2011, you can find the original 2011 article here).
What to buy next?
I must now find a replacement for Reckitt Benckiser, preferably another market leading company with a good history of consistent growth, but with a decent dividend yield and shares that offer better value for money.
I'll be using the Stock Screen and Investment Strategy from UK Value Investor to find and review that next investment. And subscribers will know exactly what's being added to the Model Portfolio, even before I've bought the shares.
So if you're also looking for high dividend yields and capital gains, you are welcome to try UK Value Investor, risk-free for six months.
Yours sincerely,
John Kingham
Editor, UK Value Investor
P.S. Join UK Value Investor before 30th April 2013 using the two year plan and you will not only save yourself £100 on the standard price, I will also send you a FREE copy of The New Buffettology.
P.P.S. This email and the UK Value Investor newsletter are not advice. They provide information for investors who can invest without advice. If you need advice you should seek an independent financial advisor. | | | | | | |
