This is more a note to myself on not investing what you don’t understand fully. Last year I made one of the embarrassing mistakes that end up defining your investment strategy in future years. Back in 2008, I had similar “big bets” on Oil plays like Aminex, which I also didn’t understand, but the money lost was tiny! From then on I didn’t really lost most years, however, last year, I did make a mistake.

Last year, when I was re balancing my ISA, I put £1000 over to FCIF, as at the time it had a decent Dividend. But this was early in my understanding of both valuations (NAV) and ETF’s – ie, the fact an ETF can trade both above and below the asset valuation.

At the time, I just had focused on the price, which had been a steady ~ 100-102p since inception, and hadn’t paid heed to the NAV graph (which wasn’t exactly rising). The fact the NAV was below the actual price the shares was trading should have been a “danger” sign, and should have prevented me buying at a 5-10% premium.

Last year I paid over the odds effectively for this investment, and it’s made my future buying more informed. For the value of the knowledge priceless, but it did cause a £200 drag to the overall ISA last year, which would have actually resulted in my other investments outperforming the benchmark (ie, Lifestrategy) in 2018.

Is FCIF a good investment now? Well, it’s relatively under the NAV now – and personally I do top-up the investment when I have nothing better to top-up in the ISA monthly (as having assets in the market in a liquid stuck like FCIF is a good play to allow a faster trade compared to an OIEC settlement), but I know for sure right now that won’t be the case this month (I have 3 better candidates for this months monthly “regular” investments). However personally I would rate this as a ~7.5% divi rise in a year, and maybe 2% on shareprice over 2019 (but it does have a future potential 10% rise on the discount). As you can get a ROCE of up to 15-20% elsewhere right now, I’d personally avoid buying outright given I don’t expect the recovery this financial year. Am I going to sell this? Well no, as having a investment like this in the portfolio does help to remind me of the failure. And I may want to top up when I see the NAV monthly gain numbers start to recover a little.