9th Month - Yield is a fragile thing
Hey Guys,
It's been a while since I posted, but I hope you still come over once in a while to see, if there are new things to tell and share.
And I think most people already know this, but it it really astonishing, if you have experience it yourself.
What I want to talk about is Yield or gain on capital.
But before we start, for starters: What is Yield? Or how do I define Yield.
Definition: "Yield is the money you get for the money you invested."
That's it. No long text about it. A simple and easy to understand definition. Let's make an example to make it clear:
Let's say you invest 1.000,00 € or money unit. And every month you get 3,00 units. To talk about Yield you need to consider the time-intervall. Whether you see Yield on a monthly basis or on a yearly basis. If you have a yearly basis - that's what most people do - then you have a 3,6 % Yield per year. To get that number, you do this: 3 x 12 / 1000. The "12" are the 12 months and the "1000" is the money invested. And since we do "Gain/Invested Unit" we get a percentage value therefore using "%".
Ok since we are now on the same page, I want to tell you my experience:
I use a Software called "Portfolio Performance" to keep track of how my money develops. Actually it is a nice tool, I can only recommend it. Of course you have to put all the information in it by yourself, but it is worth it.
So I have followed how my money developed. And it said: current Yield is ~ 13,5 %. That was around August 2018. The Yield considered book gain, dividends, also transaction fee and taxes. Around this time "Triangle Capital" sold it company/ changed share-strategie. So they won't pay quaterly anymore. That's what I have heard and what I have seen, since the dividend on june didn't came. So I sold the shares and bought more shares of companies, I already hold. My Yield of 13,5% dropped down to ~ 8 %. The sell-value was far worse then the predicted market value, also I paid more for the shares of the companies I wanted to buy. Of course this phenomen is logical. No one want to sell under value and no one want to buy over valued shares. And since I also have to pay for transaction fee, I lost alot of my Yield just for redistribution of my money.
So what is the Lesson learned here: Look for shares, which you can hold longterm. If you don't do this, you will have to redistribute your money or your money invested might be dead. Dead as "not making money"-dead. And with every transaction your broker will take some of your money. So try to redistribute as less as possible.
As a sidenote: Don't forget, I personally don't consider bookgain, as a gain as long I have not realised it. Therefore seeing shares with no dividend-payouts as dead.
That's it for day. Have a nice day and be mindful of the icy roads incoming.
It's been a while since I posted, but I hope you still come over once in a while to see, if there are new things to tell and share.
And I think most people already know this, but it it really astonishing, if you have experience it yourself.
What I want to talk about is Yield or gain on capital.
But before we start, for starters: What is Yield? Or how do I define Yield.
Definition: "Yield is the money you get for the money you invested."
That's it. No long text about it. A simple and easy to understand definition. Let's make an example to make it clear:
Let's say you invest 1.000,00 € or money unit. And every month you get 3,00 units. To talk about Yield you need to consider the time-intervall. Whether you see Yield on a monthly basis or on a yearly basis. If you have a yearly basis - that's what most people do - then you have a 3,6 % Yield per year. To get that number, you do this: 3 x 12 / 1000. The "12" are the 12 months and the "1000" is the money invested. And since we do "Gain/Invested Unit" we get a percentage value therefore using "%".
Ok since we are now on the same page, I want to tell you my experience:
I use a Software called "Portfolio Performance" to keep track of how my money develops. Actually it is a nice tool, I can only recommend it. Of course you have to put all the information in it by yourself, but it is worth it.
So I have followed how my money developed. And it said: current Yield is ~ 13,5 %. That was around August 2018. The Yield considered book gain, dividends, also transaction fee and taxes. Around this time "Triangle Capital" sold it company/ changed share-strategie. So they won't pay quaterly anymore. That's what I have heard and what I have seen, since the dividend on june didn't came. So I sold the shares and bought more shares of companies, I already hold. My Yield of 13,5% dropped down to ~ 8 %. The sell-value was far worse then the predicted market value, also I paid more for the shares of the companies I wanted to buy. Of course this phenomen is logical. No one want to sell under value and no one want to buy over valued shares. And since I also have to pay for transaction fee, I lost alot of my Yield just for redistribution of my money.
So what is the Lesson learned here: Look for shares, which you can hold longterm. If you don't do this, you will have to redistribute your money or your money invested might be dead. Dead as "not making money"-dead. And with every transaction your broker will take some of your money. So try to redistribute as less as possible.
As a sidenote: Don't forget, I personally don't consider bookgain, as a gain as long I have not realised it. Therefore seeing shares with no dividend-payouts as dead.
That's it for day. Have a nice day and be mindful of the icy roads incoming.
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