Reply To: Stop Loss

[Stephen Bland]

Thanks Chris

FGP is not the worst offender of suspended dividends amongst the three. That dubious honour goes to RBS as I said in the article.

As mentioned, the eternity hold approach is based on the likelihood that on balance, sufficient suspender shares will recover payouts to justify holding but by taking this overall view, it follows that there will be some poor performers that take far longer than expected to recover. The approach will also capture some good recoveries too such as for example BP and Persimmon which both suspended dividends in the past. We know with hindsight how things turned out but it’s not necessarily clear at an earlier date so how long do you give it? I decided that forever was probably long enough.

But it’s your money so if you feel you should dump such shares you must do so, TDL is only advisory.