Following on from a previous interview with Lewis, a young investor, I’ve recently spoken to Ben who’s 26. He started investing in 2015 and describes himself as a dividend growth investor. He holds a portfolio of shares across the US and UK principally.
Ben works as a machinist in the aerospace industry, but hopes that creating a passive income from shares can replace his day job income.
First I asked him for a bit of background about himself before moving on in the second part to his holdings and questions on his investing style.
How long have you been investing?
About 6 years ago was when I started getting into stocks. Over the last 2-3 years I have been taking it more seriously.
What age did you start investing at?
Really I started investing when I got my first job at the age of 16. While serving at a pub, I was buying a silver coin each week. This would account for about 25% of my pay packet.
What got you into investing?
With the silver it was more of a magpie type thing where I wanted to hoard shiny coins. But when my stock investing journey started it was when my dad and brother were talking about it, sparking my curiosity I started to look more into it and I fell down the rabbit hole.
How would you describe your investing style?
My investing style is dividend growth investing. I invest for my income now and in the future so I can replace my reliance on active income.
Do you invest in anything other than shares?
I have precious metals which I’m rather fond of and premium bonds. Though young I am focusing on investing capital to start the compounding interest phenomenon rather than spread myself too thin across multiple asset classes.
Coming onto more investing focused questions, we covered top holdings, winners and losers, advice to other young investors, what research he does before buying shares and more.
What has been your most recent investment?
Mostly REITs (real estate investment trust) at the moment. I added Medical Properties Trust and Segro which diversify my REIT holdings across the US, EU and UK as well as different industries.
What are your top 5 holdings?
Legal & General (LGEN), Realty Income Corp (O), 3M Co (MMM), Iron Mountain Inc (IRM) and AbbVie Inc (ABBV)
Best investment in the last year?
IRM up 22%+ (at the time of the interview)
Worst investment in the last year?
Greencoat UK Wind PLC (UKW) -8% (at the time of the interview)
What would be your advice for other young investors?
Learn about yourself and allow for mistakes.
Learn your risk tolerances and goals before investing, the further along your investment journey the more lessons you will create and the more you’ll become to know the true reason you want to invest.
What research do you do before buying a share?
As I am a dividend, long term investor I’m very much into the fundamentals of a company. I like to see the PE & PEG ratio to see how over or under value a company potentially is. The dividend yield and payout ratio to make sure if the company pays a dividend it’s sustainable and also check if there is dividend growth history. Cash to debt levels as well as the current ratio, making sure their balance books are okay short term.
It’s also good to check how the company is doing compared to its competitors.
What share are you most confident in that you hold?
For me it has got to be LGEN, one of my largest positions. I am a rather defensive investor and LGEN brings in a very nice dividend yield alongside seemingly being undervalued. Being in insurance, it’s something we all need and with car insurance have to have. They have a good weighting in the sector and think they can perform strongly.
What was the last share you sold and why?
AT&T (T) was the last stock I sold. Though it offered a nice dividend yield, this is potentially being cut with figures varying from 30-50%. This is due to their Warner deal which has caused a palava as the board went behind the CEOs back and done the deal, resulting in the CEO looking at legal action. This could be fairly messy and the amount of unknowns is too much. T was very much a bond proxy and allowed me to use the income to buy more of other stocks.
What are your expectations for what your portfolio can achieve over the next twelve months?
Each year I make myself goals and stretch goals, specific to the portfolio. This year my goal was to replace 2% of my income with dividends with a stretch goal of 2.5%. I’ve underestimated myself to this point as currently have replaced 4%, but shall see at the end of the year. With income in mind I would like to see a consistent 3-5% month over month.
What’s the best piece of investing advice you’ve been given or read?
The best advice I’ve been given, and I now give to others, is to not focus upon the ‘compound effect’ and to focus on investing capital into sound companies. All the while not getting caught up in FOMO (fear of missing out).
Tell us about Sensible Investors – what is it and how do you hope it can help investors?
Sensible Investors is a forum which is specifically created for investors of all types.
Through trial and failure we found Facebook wasn’t the best way to create a group, we were having to delete 10+ scammers a day.
Not only was it a headache for moderators but also those who legitimately learn about investing and improve their finances. So we created the Sensible Investors forum which is an open place for all types of investors to come together and talk. Whether you invest in stocks, ETFs, real estate or even Crypto currencies there is a place for everyone.
But Sensible Investors isn’t just purely about investing as being a Sensible Investor is also about budgeting and the mindset for our goals. As we all learn in different ways we have forums specific for YouTube, books and podcasts.
We built this website for people of all experiences and goals to come together and learn.
It’s a brilliant way to learn new resources and being such an open community we have people joining from all over the world.
You can visit Sensible Investors here: www.sensibleinvestors.co.uk
Thanks to Ben for taking the time to share his investing insights. If you’d like to be interviewed please do get in contact via the contact page, or email me at firstname.lastname@example.org