10% Annual Return , Low Risk

This is a discussion on 10% Annual Return , Low Risk within the Stocks forums, part of the Markets category; Hi I'm interested in a very low risk system to use for savings and pension, I know this is not ...

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Old Jan 19, 2017, 4:51pm   #1
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10% Annual Return , Low Risk

Hi I'm interested in a very low risk system to use for savings and pension, I know this is not big guns and exciting day traders stuff , but perhaps even the successful 5% winners may become a little more boring as the mature in age and want a belt & braces system that they can plop all their hard earned dosh into whilst they go off and enjoy life a bit more, Any ideas guys/gals?
I have an idea that I wish to explore , but more on that later ,
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Old Jan 19, 2017, 6:18pm   #2
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For savings and pension, investors usually seek shares in companies of pretty large size (market cap/capitalisation), which are likely to survive for decades, and which consistently pay at least average dividends. The idea is to own a parcel of FTSE100 shares which you never sell, so it won't matter of their share price rises or not, as long as they keep paying a dividend.

However, to generate a large income from dividends takes a hefty bundle of capital. Average dividend yield for the biggest 20 FTSE100 companies would only be about 4%. That's better than the old building society savings account but for every £1 of dividend income you would need £25 in shares.
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Old Jan 20, 2017, 7:59am   #3
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Gardan started this thread Thanks Tomorton , but that's not really low risk is it ? I,m looking for a very low risk method that doesn't have me worrying every time I hear of banks failing stress tests ,Italy bank crisis or waiting for the next collapse of the markets , I,m also a greedy little sausage wanted 10% return for my low risk belt & braces investment whilst I trawl my sorry ass through the undergrowth looking for my golf balls, I may be lazy and deluded about such a system but I was thinking along the lines of,,,,,,,(see next post)
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Old Jan 20, 2017, 8:25am   #4
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Gardan started this thread Let's say someone has a £100k fund after some very savvy day trading or savings inheritance whatever and now wants to take some time off to spend with family traveling or improving their handicap ,
So assuming it only requires 10% return to enjoy this idilicac lifestyle without worry , what if a system
Could be engineered to facilitate this ?
What's wrong with this for instance?:
1. You buy 10 stocks in the ftse 100 or Ftse 250 or combination of the two giving dividend returns of an average of 5/6 % so let's agree this is guaranteed (perhaps with some maintenance on the way)
2, the tricky bit, how to squeeze another few quid out of these 10 stocks to give us growth in capital of 10% yes 10% not 4 or 5% to get us up to 10%...my system requires 15% really to get an annualised return of 10%.
3. The no worry belt & braces bit: with the extra 5% I will sell the Ftse 100/250 index ( not shares ) to get a parachute should the market tank ,
Ok now I'm home and dry and can have a wonderful life marching down the luscious fairways that are whispering my name .....ha ha agreed ? Really need some help here guys
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Old Jan 20, 2017, 12:59pm   #5
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Sell puts in dividend shares that you are planing to own , when market pulls back you get assigned in your puts and you own the shares .
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Old Jan 20, 2017, 1:28pm   #6
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Sell puts in dividend shares that you are planing to own , when market pulls back you get assigned in your puts and you own the shares .
Hi Tar thanks for your reply but I'm a little confused ,( not hard for me to be so) my idea was to spread bet on the indexes ((selling the index)I have my physical owned shares that I own and fund the losses of the spreadbet with gains in my actual shares .
For example :
There essentially two parts (three really) to my cunning plan :
I own 10 individual shares in ftse 100 at £10k value for each share so £100k invested in ftse 100 shares , I have bought these long term with a view I will get at least two things over the long term 5% growth in capital from the £100k shares and also 5% dividend each year on each share so , I should now be 10% up each year on my £100k invested. However I feel this is a risky strategy so part two of the plan :

I open a spread betting account and short the index that my shares are in and thus hedge against my shares bombing downwards , this shall we estimate eats up 5% of my gains in the share prices rising but gives me a parachute from falling markets. But at this point I'm only making 5% per annum ( assuming my shares rise at 5%)

Part three would be great if I could actually squeeze a whopping 10% share price rise per annum out of my portfolio I would then with the dividend be 15% up before I paid for my hedge in the spread bet , so 10% nett profit annually .

I'm I making any sense sorry if not
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Old Jan 20, 2017, 2:38pm   #7
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Gardan started this thread So in bullet form :
1, hoping some of you big guns will help getting a simple strategy together to help us numpties earn a whopping massive 10% from long term trading per annum on any stocks including USA as we need 5% for growth and 5% to use to hedge against any market drop so as not put the fear of god in us everytime we hear a bad news story from the market . Need to get my handicap to category 1 remember
2, some advice on the spreadbet side of things to hedge the market , I'm hoping this is a simple matahmatical eqausion.

question: how hard would it be to source long term stocks that out perform the index they are part of by at least 10% and what are the pitfalls when doing such research?
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Old Jan 20, 2017, 3:54pm   #8
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So you'd be looking for 10% net profit for 0% net risk?

Can you show something that says this is achievable?
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Old Jan 20, 2017, 6:19pm   #9
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So you'd be looking for 10% net profit for 0% net risk?

Can you show something that says this is achievable?
Ermmmm No sorry I can't , that,s my original question , I'm just the lazy sod who just wants to go off playing golf with all the other lazy sods down at the club , without having to worry if my very very hard little nest egg is not going to be eaten by them nasty city bods ( I say that in tongue & cheek way ,my daughter makes a living in the city financial sector )
So I'm guessing by your answer that my little plan is a little far fetched ? And I'm destined to be a crap golfer whilst I watch my news feed all day
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Old Jan 20, 2017, 6:44pm   #10
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Gardan started this thread My point being really that when all you 5% big guns make your wedge what are you going to do with it? Assuming that you are savvy enough to be in a select band of 5% winners , I would assume you would be bright enough to chill a bit when the pot is large enough and perhaps go do a few things that doesn't entail worrying about markets . Wild dream I'm sure!
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Old Jan 20, 2017, 7:16pm   #11
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So I'm guessing by your answer that my little plan is a little far fetched ? And I'm destined to be a crap golfer whilst I watch my news feed all day
You could leave that to your caddy .
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Old Jan 20, 2017, 10:43pm   #12
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You could leave that to your caddy .
Ha ha doubt I'll be able to afford one and if I could he would be far to busy fishing my balls from the water hazards
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