Derek Pain: Why golden oldies still deserve a fair share in investing

No Pain, No Gain

Should us old-timers continue to invest in the stock market as advancing years start to take their toll? There seems to be a strong body of opinion that believes our shareholdings merely create problems for those we leave behind.

I recall one prominent former politician complaining that settling their father's estate was bedevilled by dealing with the shares he held. So should the elderly get rid of the stocks they may have cherished for many years? I don't think so.

A well-drawn-up will should solve any inheritance problems. So should powers of attorney. And it should also be pointed out that following the fortunes – even misfortunes – of a fairly active portfolio represents an absorbing occupation, providing a necessary interest in old age.

I believe there are many instances of pensioners of advanced years conducting portfolios. I am lucky to correspond with a Liverpool reader who is well into his eighties and takes a deep interest in the stock market. However, he is without a computer and often finds it difficult to keep abreast of the incessant news flow that occurs these days. Nevertheless he still spots winners. He alighted on Telford Homes - up in a few years from less than 100p to, as I write, 365p.

With inflation higher for the elderly there is an understandable determination to counter the low interest rate environment by investing in shares. After all a share yielding, say, 4 per cent compares exceedingly favourably with the returns available on the high street. And there is always the chance of capital gains, through natural progression or takeover action.

It is worth remembering that if beneficiaries are prepared to hang on to shares they could become long-term shareholders. Should they have to sell to meet, for example, inheritance tax, the value of a share is fixed to the date death occurs. In a falling market, or if particular shares run into difficulties, problems could be thrown up. Still, little is perfect.

However, there is one cardinal rule to be observed by young and old – any investor in the stock market should only use spare cash. It is silly to ignore the risks.

AIM shares have already scored from their inclusion in the ISA world and the intended removal of stamp duty. There is also a tax advantage for some AIM constituents. They avoid inheritance tax after being held for two years.

I should, perhaps, add that I am an oldie - heading for my eightieth birthday when my state pension will be increased by the princely sum of 25p a week. After 18 or so weeks my increase should be enough to buy a pint at my local.

Now to the no pain, no gain portfolio. Its star performer, the Booker cash and carry chain, has again excelled and the shares climbed to a new all-time high. At the "true" pre-tax level for the first 24 weeks of the year profits emerged at £65.1m against £46.6m although the pre-exceptional figure was £58.1m, up 17 per cent. Sales rose 16.5 per cent.

The group is clearly getting to grips with the £140m Makro acquisition. Its integration is going according to plan and benefits of £26m are expected this year, with further to come. Second-half sales are ahead of last year and the interim dividend rises by 18 per cent to 0.45p a share. With £123.4m in the bank, shareholders are promised a special distribution next year.

Chief executive Charles Wilson, the ex-Marks & Spencer man leading Booker's revival, says: "Our plan to focus, drive and broaden Booker Group is on track".

The shares joined the portfolio at 24.5p in January 2009 and are now around 146p. I have suggested any reader who followed the portfolio into Booker should consider selling about half their interest, locking in a profit and enjoying a free ride. With many benefits of the Makro deal still to materialise and growth expected in India, Booker should continue to prosper.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Sport
Brendan Rodgers is confident that Sterling will put pen to paper on a new deal at Anfield
footballLIVE: Follow all the latest from tonight's Capital One quarter-finals
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
PROMOTED VIDEO
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
News
i100
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Life and Style
tech
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

    £40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

    Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

    £45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

    Ashdown Group: Java Developer - North West London - £47,000 + bonus + benefits

    £40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

    Selby Jennings: Corporate Communications & Marketing Specialist – Geneva

    120,000 - 150,000 chf + bonus: Selby Jennings: A leading Swiss Private Banking...

    Day In a Page

    Calls for a military mental health 'quality mark'

    Homeless Veterans campaign

    Expert calls for military mental health 'quality mark'
    Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

    Meet Racton Man

    Analysis shows famous skeleton was a 6ft Bronze Age superman
    Garden Bridge: St Paul’s adds to £175m project’s troubled waters

    Garden Bridge

    St Paul’s adds to £175m project’s troubled waters
    Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

    Stuff your own Christmas mouse ornament

    An evening class in taxidermy with a festive feel
    Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

    Joint Enterprise

    The legal doctrine which critics say has caused hundreds of miscarriages of justice
    Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

    Freud and Eros

    Love, Lust and Longing at the Freud Museum
    France's Front National and the fear of a ‘gay lobby’ around Marine Le Pen

    Front National fear of ‘gay lobby’

    Marine Le Pen appoints Sébastien Chenu as cultural adviser
    'Enhanced interrogation techniques?' When language is distorted to hide state crimes

    Robert Fisk on the CIA 'torture report'

    Once again language is distorted in order to hide US state wrongdoing
    Radio 1’s new chart host must placate the Swifties and Azaleans

    Radio 1 to mediate between the Swifties and Azaleans

    New chart host Clara Amfo must placate pop's fan armies
    Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

    Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

    The head of Veterans Aid on how his charity is changing perceptions of ex-servicemen and women in need
    Torture: It didn't work then, it doesn't work now

    Torture: It didn't work then, it doesn't work now

    Its use is always wrong and, despite CIA justifications post 9/11, the information obtained from it is invariably tainted, argues Patrick Cockburn
    Rebranding Christmas: More public bodies are refusing to give the festival its name for fear of causing offence

    Rebranding Christmas

    More public bodies are refusing to give the festival its name for fear of causing offence. They are missing the point, and we all need to grow up
    A Greek island - yours for the price of a London flat

    A sun-kissed island - yours for the price of a London flat

    Cash-strapped Greeks are selling off their slices of paradise
    Pogues could enjoy fairytale Christmas No 1 thanks to digital streaming

    Pogues could enjoy fairytale Christmas No 1 thanks to digital streaming

    New system means that evergreen songs could top the festive charts
    Prince of Wales: Gruff Rhys on his rock odyssey, and the trouble with independence

    Prince of Wales: Gruff Rhys

    He is a musician of wondrous oddity. He is on a perpetual quest to seek the lost tribes of the Welsh diaspora. Just don't ask Gruff Rhys if he's a national treasure...