A tale of two Bens!

Above left, Ben van Beurden Chief Executive Officer of Shell. Above right, Ben Ritchie, Manager of the Dunedin Income Growth Investment Trust PLC.

Dear All,

Yesterday the price of the shares of what will soon be Shell PLC went above £19.00. In previous posts I had said that should the shares reach £19, I would sell. Yesterday I did not – sell the shares that is. I thought, they could still go up! Today, the shares rose higher. Having checked the price of the shares I wanted to buy – Dunedin Income Growth Investment Trust PLC – and checked and confirmed with my stockbrokers Redmayne Bentley the yields, and noting the ex dividend dates to ensure that I would NOT fall between two stools insofar as not receiving the Dunedin dividend when giving up the Shell dividend I sold the shares. I could have bought the Dunedin shares a lot more cheaply (in terms of dealing costs) through Aberdeen Investments. However because of all the delays I doubt I’d have got the dividend. Therefore I incurred Redmayne Bentley’s dealing costs as well. This meant all told – the total amount of money I spent on the shares I had just sold and taking into account the money (dealing costs) I spent on buying the replacement shares, I am actually down – by £422.00! However, given that on Wednesday 28th October 2020 the shares were trading at around £8.66, I’ll take a loss of £422.00!

The other factor that I took into account was the piece of investment advice all financial services professionals will offer: Spread your risk! Do NOT put your eggs in one – or even just half a dozen companies. Those lacking the wealth of some of Boris Johnson’s generous friends will often choose vehicles such as unit trusts or investment trusts in which to invest. Buying units or shares in such vehicles enables those of us of ordinary means to spread our risks and also gain some investment expertise as those managing the fund or trust are generally competent professionals with a track record of success.

I still – and will continue to own – shares in Shell PLC but the holding will number just 1% of my original holding.

Back at the beginning of 2014 when I received the cash proceeds of the sale of my house in Leeds, I went into Redmayne Bentley to buy shares. I did so because I calculated that were I to pursue the sensible strategy of putting the proceeds into the Dunedin Income Growth Investment Trust PLC – via the discounted share purchase and sale scheme operated by Aberdeen Investments, the income I would receive was not quite enough – when added to the income I already received. I therefore decided to “increase my risk appetite” to use the jargon. With luck and good judgement this strategy paid off but now I have my State Pension and given the uncertainties globally and the fact that I got all but £422.00 of my money back, I took the plunge!

What I have additionally done was to make a further purchase of Dunedin shares via the Aberdeen scheme to make good the amount that could not be invested due to the costs. They money had been paid electronically to Aberdeen but the shares will not be purchased until tomorrow so I have no idea what they will cost me and thus how many I will get!

After I have received two sets of dividend payments at the end of February, one from Aberdeen and one from Redmayne, I will transfer the shares held by Aberdeen Investment’s nominee to my CREST account ar Redmayne. Subsequent to this I will then request Redmayne to certificate the holding – which will cost be £15.00 – in order for me to receive the annual report in printed form and actual share certificates.

NB: This is not the best way to hold shares should you think you’ll need to sell same. However I do not anticipate having to sell my Dunedin shares. I’ll also be interested to see what the share certificate looks like! Furthermore, I reckon the Dunedin Income Growth Investment Trust PLC will not have a huge number of private individual investors on the shareholder register available to the public – most people either hold the shares through Aberdeen or CREST or ISAs with their stockbrokers.

The reasons why I purchased Dunedin shares -rather than another investment trust – was that the company had a good record in paying dividends and that Dunedin was the one investment trust I was able to persuade my late father to invest in following the sale of most of his shares in Lloyds Bank in the mid 1990s.

As it is, I will receive a little more by way of dividend payment from Dunedin although it is likely that Shell PLC will rack up the dividend. Furthermore, if Shell and BP announce a merger the price of the shares I still own in Shell will skyrocket!

Of course, people will say that I should have waited and made a lot more money.

Probably so but what is done is done.

After all that milk has yet to be split and may not be – spilt that is!

As I write Shell shares have reached over £19.42 which means that I would have made a profit of around £3,000 and not a loss of around £400.

The thing is, that is like saying “I should have chosen the lottery numbers, T, U, V, W, X, Y and Z when the results of the draw are announced!

The thing is we do not know the future!

Then of course there is the curse of the fortune teller!

If you are accurate you will know the date of your own death!

Still want to be able to guarantee that you’ll win the lottery?

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