A different kind of proposal....

Discussion of the proposed Cashback Investment Club

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garindan
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A different kind of proposal....

Post by garindan » Tue Mar 20 2018 12:15pm

I personally quite like the following idea, as an initial proposal (heed kevin - I've written that word!), if Rich's poll works out as he has suggested:

Members invest 50/50 of their money into each of two funds, so everyone invests on the same terms. I think this is important as it ensures everyone has an interest in both funds and everything the club does. Plus it makes it easy to address past investments by club members to attribute holdings going forward.

Fund 1:

Have four shares from different sectors plus SHRE. Keep as long-term holds for income and don't really care about the current price unless it seriously bombs or sell off if the price grows above 30% of purchase price, take our profit and find a replacement etc... Otherwise collect the dividends, invest in any of the four further when funds permit, according to a four choice vote, in blocks of £600 and no more.

Fund 2:

Invest money any way we like, in much more feisty shares that might bring us a decent return rather than a few percent. Fix a stop:loss against each share a set amount and a tracker when it hits a threshold profit point we are after. We look to invest either when we have £600 in the kitty for a purchase or when one of our shares in this portfolio is sold and there is a block of at least £600 then available.

In practice:

We choose four shares from our current portfolio to hold as long-term investments, which are the most interesting to us as a club. I would personally suggest holding GSK, United Utilities, ITV and Aviva as they all offer interest to us. They ay not be performing greater on paper at the moment but GSK and UU. have both been OK in the past for us, Aviva seems steady so far and provides a good divi and ITV still has interesting potential, which for the amount invested seems worth pursuing. Sell the rest. Add the money from the sales to the current cash kitty at hand and give half each as funding for the two funds to progress. Start voting for which of the four in fund 1 to purchase more shares in. Start looking for three choices to vote for in fund 2. We should then have kickstarted the club again :thumbup:
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Beachboy
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Re: A different kind of proposal....

Post by Beachboy » Tue Mar 20 2018 1:09pm

garindan wrote:I personally quite like the following idea, as an initial proposal (heed kevin - I've written that word!), if Rich's poll works out as he has suggested:

Members invest 50/50 of their money into each of two funds, so everyone invests on the same terms. I think this is important as it ensures everyone has an interest in both funds and everything the club does. Plus it makes it easy to address past investments by club members to attribute holdings going forward.

Fund 1:

Have four shares from different sectors plus SHRE. Keep as long-term holds for income and don't really care about the current price unless it seriously bombs or sell off if the price grows above 30% of purchase price, take our profit and find a replacement etc... Otherwise collect the dividends, invest in any of the four further when funds permit, according to a four choice vote, in blocks of £600 and no more.

Fund 2:

Invest money any way we like, in much more feisty shares that might bring us a decent return rather than a few percent. Fix a stop:loss against each share a set amount and a tracker when it hits a threshold profit point we are after. We look to invest either when we have £600 in the kitty for a purchase or when one of our shares in this portfolio is sold and there is a block of at least £600 then available.

In practice:

We choose four shares from our current portfolio to hold as long-term investments, which are the most interesting to us as a club. I would personally suggest holding GSK, United Utilities, ITV and Aviva as they all offer interest to us. They ay not be performing greater on paper at the moment but GSK and UU. have both been OK in the past for us, Aviva seems steady so far and provides a good divi and ITV still has interesting potential, which for the amount invested seems worth pursuing. Sell the rest. Add the money from the sales to the current cash kitty at hand and give half each as funding for the two funds to progress. Start voting for which of the four in fund 1 to purchase more shares in. Start looking for three choices to vote for in fund 2. We should then have kickstarted the club again :thumbup:
I really like the sound of this proposal and believe it has a combination of practical advantages as well as providing a good compromise between the slightly competing arguments between 'short' and 'long' term shares. Thanks Garindan for your time and thoughts in pulling the proposal together. Also thanks to Richard for his suggestions and recent poll which has helped shape the current proposals/discussions, which I think are positive. :thumbup:
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richard@imutual
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Re: A different kind of proposal....

Post by richard@imutual » Tue Mar 20 2018 1:20pm

garindan wrote:Members invest 50/50 of their money into each of two funds
I appreciate that you're attempting a compromise, but I wouldn't describe this approach as being two funds. Just one fund, split two different ways.

I think if we have a clear split of members between 'cautious' and 'adventurous' (and let's not prejudge the poll), then the most sensible option is to let individuals choose which of the two 'funds' their own money should be invested in
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Re: A different kind of proposal....

Post by BeautifulSunshine » Tue Mar 20 2018 2:31pm

I'd be in favour of two separate funds, low-risk and high-risk and give members the choice of which to invest in when they cashout. So you can have all of your money in low-risk or all of your money in high-risk or member-defined in both.
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garindan
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Re: A different kind of proposal....

Post by garindan » Tue Mar 20 2018 3:19pm

richard@imutual wrote:
garindan wrote:Members invest 50/50 of their money into each of two funds
I appreciate that you're attempting a compromise, but I wouldn't describe this approach as being two funds. Just one fund, split two different ways.
To be fair I think a compromise is what is needed, seeing the previous discussions and poll result. I see an issue with moving forward if the investment is a choice of one or the other. If it were to be a choice we'd need to work out a fair and sensible way to safeguard previous investments.
richard@imutual wrote:I think if we have a clear split of members between 'cautious' and 'adventurous' (and let's not prejudge the poll), then the most sensible option is to let individuals choose which of the two 'funds' their own money should be invested in
I haven't voted yet as there seems to be no middle ground in the poll, which is a shame I think. It is either you only want to play safe or you only want to risk it all. For me it is no such choice of one or the other. I don't see any harm in there being a will to do some of both in life, hence the proposal I have put down as an idea for discussion, based on the previous poll that seemed to suggest a bit of both is what would be a happy medium.
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Derbiean
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Re: A different kind of proposal....

Post by Derbiean » Tue Mar 20 2018 5:04pm

For me personally I'd like to go 75% in the safer one and 25% for the adventurous one, not comfortable with a 50/50 split.

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