Lipstrust assets management (LSE: LIO) offers enormous dividend performance of 19%.

If it brings a good, 10,000 GBP invested today can change into 11,900 GBP per year. If it is continued for the next 10 years, we could end with $ 56,900, with reinvested dividends. This is a kind of magic that a intricate return, which can weave.

Common sense and idea “without free lunch” will suggest that this is an unlikely scenario. Not to mention that dividends are never guaranteed, we can already see that he is to fall. Analysts’ forecasts show that it will fall until 2027 – but only up to 14%. And it’s still, well … wow! We have to dig deeper.

Big picture

The above share price table already has a grim image, and the price of Lionust’s shares has dropped by 86% from the peak in 2021. This increased today’s dividend performance. But everyone who bought at the peak should expect only 2.8% for what they paid in 2021 this year.

Even then, the expected cash would not be close to the profit of forecasts. Could what at first look like the obvious purchase turned into a distance at a distance of the barge?

It seems that the company believes that its actions are too economical. In March, he finished buying a 5 million pounds. So he returns even more cash except for these great dividends. And it comes from … hmm, I’m not entirely sure where.

Fick investors

One of the problems is that the last few years of high interest rates have reversed many investors away from the stock market. Cash savings can be more attractive and just look at where Gold and Bitcoin went.

In such times, I would expect smaller investment companies to bear more drains than larger players. Lionest has market capitalization only 235 million pounds. Managed assets amounted to 22.6 billion pounds on March 31 and fell.

Compare this with a company like M & G In FTSE 100. The market captain is 6.1 billion pounds. And he had 346 billion pounds in managed assets in the last county.

What next?

In the April commercial update, the CEO of Lionusta John Ions said “It seems that in the last few years the only certainty was uncertainty“I know what he means.

He told us: “The improvements that we have introduced to the company, our strong investment capabilities, the brand and customer service as well as a solid operating model give us confidence that we can emerge from the current turbulent environment and help our clients also to do.“

I see that the investment on the stock exchange returns to strength when the economy is improving and interest rates fall. This is what the actions and actions in Great Britain have done for over a hundred years. In the long term, they simply grew and easily overcome cash investments.

Optimism versus uncertainty

If the CEO optimism is well placed, we can now look at the possibility of buying. But until I really understand where he will get the future dividend cash, I will stay away. All -year results are due on June 25.