LIC & LIT Listed Investment Companies (LICs) 2021

While it is disappointing, perhaps they're just being cautious & conserving funds for a likely uncertain future. Time will tell.

 

I think @Snowball is probably saying that MLT claim one thing but have done the opposite.
If MLT are being cautious and conserving funds then they need to say that - instead they are saying that the dividend is well supported and one of their 'selling' points is dividend smoothing. It's a big disconnect.

edit - typo

 

With respect, can someone give me a link to the statements. My memory is probably shot as I cannot recall MLT making that claim.

If I do remember anything correctly the dividend policy has been, and still is, dividends are to come from its investment holdings and based on earnings.

 

I found part of it. I can certainly understand how it is possible to interpret that sentence. I agree more clarity in that regard would be desirable.

 

But this is exactly the time you use those reserves. Otherwise what are they for?

Using some cash would top up a fair chunk of the dividend leaving the company with funds for buying opportunities. They also have access to more cash thru DRP program, meanwhile the franking balance just sits there of no use to them.

 

Maybe they want to give us a surprise next year with a huge increase in dividend

 

A bit like going to the warehouse and asking for one box of Space Sprockets, and they tell you sorry they can't sell it to you as its the last box, that's okay you say, I only want one box, again they say, sorry they can't sell it to you, as its the last box and if they do that, they'll have none left

 

I do fully understand it. While I know what I, and a few others, think of the situation I've no idea what the approx 29,000 other shareholders think. One of the issues for companies is they don't tailor dividend payments according to any one particular shareholder's personal preference.

I did mull the matter over before applying the principle of having a cold shower (metaphorically speaking) before taking any action in the heat of the moment since I am subject to the same behavioral aspects as others may be.

Finally decided I'm employing them to do a job which they have done according to a policy plus will I be severely impacted by the dividend reduction (Nope) and, assuming I am around for quite a while yet, will it materially matter to me in future years (Nope.)

Others though will hopefully make a decision according to their investment strategy and probably have in some cases. And that's how it should be.

 

Investing is a lifetime thing, a cut in an interim dividend and the swords are out. To say it again, investing is a lifetime thing!

Meanwhile back at the ranch:

 

Do you own any Milton mate ?

 

Haha of course. Investing for life is a given. It’s the context that matters.

We’re talking about actions vs communication. If you don’t agree with the company’s decisions you don’t have to simply accept it when there’s alternatives.

 

More people no doubt will move to etfs and vas for example but must be willing to get fluctuating distributions and create their own cash buffer and be willing to buy in when the afterpays and zip moneys as well as fads be it tech or what have you and the like keep climbing and becoming a greater part of the index whereas lics can pick their poison.

Anyway chicken breast shopping tomorrow!!

 

So what will your future allocations be ? Index or lic ?

 

Both, it's a long game so I will treat it as such, no point in sooking if the index cuts their distributions which they do if all income received falls, likewise with lics, would be nice if they smooth the divs as they claim to do.

 

Any allocation to reits ?

 

Only what Argo Whitefield and VAS have!

 

Depends on how quickly you want them to empty the bucket.

It's actually part of a cunning plan to cease paying dividends altogether, retain every bit of cash to invest and force the plebs to sell when they need to buy chicken breasts - and coffee or the ingredients to make home brew.

 

Me too, I buy them every Saturday morning.

Just out of curiosity, is your username named after Scottie Pippen?

 

I'll point out sometimes they do the picking before the index gets a look in.

Case in point is one of the new additions in MIR. It's in the top 150 by capitilisation but is yet to be included in the index (due recent listing and re-balancing yet to occur.)

 

MLT half-year release ASX Link