Interactive Investor - not the best

By any stretch of the imagination, I only wish that given the opportunity to shift broker when they introduced their new charges policy, I grabbed it with both hands wrestled it to the floor and rolled around lovingly with it for some time. The new charges whereby they now charge all account holders £80 per year were brought into play in the middle of this year. This can be offset against trades throughout the year. Sounds not too bad... Well it's not if you trade. Interactive investor sold themselves heavily and pushed so strongly the fact of "no inactivity fees" and no management fees not a year ago so this news came as somewhat of a surprise to a lot of Interactive Investors customers.

Well I had a major hassle with Interactive Investor over that time whereby my whole portfolio was seemingly shipped to another broker wrongly and it took Interactive Investor a very tardy 8 weeks to finally sort it out with me wasting probably days chasing down dividends that had been paid to wrong accounts, all in all they're now coming across as a bit of a shambles. It takes them up to 5 days to respond to messages, they state it can take 3 (but even at 3 days - we're in the digital era where messages are sent instantaneously), why not take on more staff and appease your (now paying, whether they like it or not) customers. So Melrose changed new shares for old shares 1 for 1 yesterday at 8am and were supposedly available to trade immediately. Well you got it, more than 24 hours on I have a large whole in my portfolio where Melrose used to be. Come on III sort it out!

My Dividend Policy Plan

There are loads of get rich quick schemes out there from tipsters recommending the next ten bagger to various ponzi schemes which are pretty much all shams and have no way of success. Get rich quick schemes don't work and don't even get you rich slowly, if it looks too good to be true it generally is. Well having lost enough cash on attemping to pick the next explosive growth story I have gradually changed my investing strategy over the years to one which will offer me a continual and increasing income stream without the exposed risk these get rich quick schemes sell you.

So this is my dividend policy plan that will furnish me with the less scary and less risky ride to riches. As well as possibly offering capital gains, which we all aspire to benefit from, there are bucket loads of stocks that pay us cash as dividends when we own them which is very kind of them. These dividends can vary from anything between 0% to up to 10% and even more. These dividends get paid out at regular intervals and are normally paid out twice a year with an interim dividend and a final dividend. However they can be paid out more frequently, BP and Glaxosmithkline for example pay 4 dividends a year (1 each quarter). It is stocks that show positive dividend growth over the years that are the stocks that interest me. Dividends are all dictated by the board of a company who decide the dividend policy of the company which is the backbone of my plan. Following this ethos I'm looking primarily for high dividend stocks that have a dividend policy of increasing the dividend yield each and every year. If the dividend were to remain the same with no growth then ultimately this would become worthless once a few years of inflation gets hold of it.

These do tend to be less exciting shares and tend to be defensives. They therefore aren't going to make a fortune overnight but for those in for the long term, which I am, can see a steady but positive (hopefully) increase in the value of stocks leaving a healthy increase and nice pot of cash along with regular income for doing very little. I am confident that this dividend policy plan will give good positive results in the long term.

African Barrick Gold (ABG) - back in?

This continues the why buy gold theme. I recently had a position in African Barrick Gold purely on a value basis. Their price seemingly collapsed towards the back end of July and having missed the previous dip in mid May I took a position at aroudn 315p. This was remarkably well timed - one of my best ever in fact. The price then climbed to the late 400's in a matter of weeks on news that China Gold were looking to buy African Barrick Gold (see article here). As is often the case it appeared overbought and I set a stop loss in place at 452p to lock in profits. Whilst this was potentially viewed as a keeper looking for the gold exposure it could be hugely volatile (as most gold mining stocks can).

My stop loss got triggered whilst I was away sunning myself in rainy Devon on holiday (giving me a return of arount 43% in about 3 months). Whilst the talks between African Barrick Gold and China Gold seem to be progressing nicely (further report here) the price got battered due to a pretty awful trading update with pretty much everything falling below expectations with little positives that could be drawn. I think the price will recover, but likely in line with the gold price when that moves. As a result I'm keeping my beady eye on this but will be looking for a price far nearer 350p before I get back in. Again another example of China loading their coffers with gold a good reason in my view as to why buy gold currently.

China is on the gold

China is now seriously turning its attention to gold. I continue to ask the question as to why buy gold. Well it appears that China has asked the same question and is accumulating the shin stuff rapidly. Year on year they are mining more and more, in 2010 they became the worlds largest miner, mining a total of 340 tonnes which rose to 361 tonnes in 2011.

Not only are China mining more gold than ever before but they are also importing more gold then they have been with imports tripling between 2010 and 2011.

In numerical terms China's demand for gold has increased by an average of 27% per year recently.

But it's not just the Chinese government that are accumulating gold it is recommending its citizens do the same which they are.

Why are they accumulating so much gold? Is it to bring them in line with the proportion of ordering exchange other countries hold in gold? If for example it was to bring itself in line with say Germany it would need to quadruple it's holding which would be massive as it currently holds around 1000 tonnes already.

So why buy gold? Because China is furiously accumulating it, this demand can't fail but to have a positive impact on the price.

Melrose holds its dividend

I've had my eye on Melrose for a while, I've done some research but felt they were a touch expensive hovering around the 240p mark.Well following their interim management statement of last Friday they plunged around 15% in the day. This was seemingly on poorish results, whilst not being disastrous in my eyes. It seemed to focus really on general sentiment of the market whilst not being too specific on Melrose themselves. It appears that the market is pretty jittery at the moment and any negativity is viewed very dimly at the moment. 

Melrose made a recent acquisition of Elster and as a result have frozen their dividend this year which will maintain it at around 4%. Whilst the most common checkbox for me is a policy of dividend growth when investing in shares, they have not reduced it either. I feel that once the Melrose board have Elster sorted the shareholders will see a great return as a result and further the increasing dividend policy growth will be resumed. As a result of all this I took the plunge at around 204p. As with all my other dividend growth shares I'm going to take a long term view on his stock.

Going for Gold

I'm a bull on gold. Not literally but in the investing sense of the word for loads of reasons, that said who am I? A little man with very little insight in the greater scheme of things that's who I am. As and when ideas come to me as to why i wonder why buy gold I'll fire them up here. The first reason as to why buy gold must surely be inflation and the more fierce it is the more gold will appreciate. Well not that gold will appreciate per say but that the standard currency like the euro, dollar or pound will depreciate so comparatively gold will cost more in these money terms.

Hurricane Sandy and the Insurers (Catlin and Hiscox)

With the catastrophe that has very sadly kicked off on the East Coast of the USA recently I have decided to put a stop loss on the Catlin shares that I own. I reckon there could be a bit of downside in here for those with under-writings in the region as and when the losses are calculated and published.

With a touch of limited insight I bought into these some years ago as one of my first investments due to them being a high dividend share. Since then I am up close to 50% (including reinvested dividends) so am keen to lock in any gains that I've got rather than watch them disappear into thin air should the price crumble. I've set a stop loss of 448p. If this gets triggered, fine, if not great.

I also own shares in Hiscox and will look at doing the same here although these are currently doing less well, they're up about 30%.

My Investment Diary

I read an article recently that you should keep a diary of your investments and your thoughts on investments so that at any time you can look back and see the reason for your trade at any time. The theory behind this is so that your thoughts don't get tied up in emotion and you can look at a share in the cold light of day should a stock do really well well or really poorly - let's be honest there's a monster likelihood it will do one or other. This may well help you close positions rather then hang on to them in the hope they'll come good or excitedly cling on hoping a share will go stratospheric. These are the things can can generate huge losses when investing in shares. I've been trading for a while, with mixed success, and reckon this could be a good step forward. I invest mainly in shares that pay high dividends and that have a dividend policy increasing dividends year on year. I am flexible however and do invest in emerging markets, gold stocks, funds and other shares offering good value.

This is therefore going to be my investing diary, it's not meant to be any recommendation or guide or contain share tips for anyone to follow, just me voicing (to myself) my views and ideas. Any input would be greatfully received though as I am merely a novice and any learning in this field is enlightening, not to mention helpful on the pocket.