Category Archives: General Investments

Portfolio Performance – March 2019

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Overall “monthly” figures (from my sharepad tracker), taken on Sunday 31/3/19 as markets closed

  • SIPP : +2.2%
  • ISA : +1.7%

Given during the month the Vanguard Lifestrategy 60% we have as benchmark is +2.29%, so I am behind this “rolling” month by a small amount on both portfolios (I’d also add these figures include dividends!)

Lets see how we do next month – Given this is first time I’ve been tracking my portfolio this way, I should add my largest benefits/detractors :

  • SIPP – Largest growth : BP +4.78% – + a dividend payment making this higher.
  • SIPP – Largest detractor : WPCT -5.15% – overall portfolio is -0.4% on this now
  • ISA – Largest growth: BGJSB +4.09%
  • ISA – Largest detractor : LLOY -1.13% **

Given majority of shares in both portfolios have actually had gains, and we’re due Dividends on quite a few having already gone or are going to be going ex-divi over April, I expect growth over next 2 months to actually exceed the benchmark.

With the top up strategy discussed yesterday, I expect reinvestment to continue in the detractors going forward.

** Aviva was actually largest detractor, but we expect this from a new position in portfolio, and I haven’t lost as much as a long-term holder of a share – majority of losses are in stamp-duty and the trade fee – as is normal when entering a position.

Lets hope for a better result next month!

New reinvestment strategy 2019

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I have just had the realisation, maybe a revelation, after a few beers, that maybe I’ve been going about this slightly wrong. I mean a few beers and a spreadsheet combined with last years month by month share price figures. Conventional wisdom is not to catch a falling knife, but I’ve been doing quite well overall in recent years (I wasn’t minus equity in 2018-19 when most funds including my world tracker was). So I was thinking the following:

Why not robo-target my monthly regular investment pot to invest in the companies or OIEC, or ETF with the highest fall over previous month? I’m also tracking fall over the financial year (which for me runs on an ISA year basis) – so I’ll probably likely also have a next-preference to the overall yearly fallers after the monthly, all things being equal. The math said I would have overall ended up with a higher percentage of winners last year by adopting this strategy.

Is this a stupid plan, I’d be glad of your comments, but I think I’m going to try it for a 3-6 month period now given I expect we’re in an extreme volatility period. Now as my investments are publicly listed on this blog month by month, this would allow others to also follow this so hence I am pre-notifying this will be the plan for a few months at least. I will exclude “new investments” under 1% from this rule to allow me to top up to a reasonable 4% min holding, otherwise I wouldn’t be able to sell without horrible trading losses.

I also couldn’t have implemented this due to sheer lack of portfolio size in 2017-19… I would have ended up with a far to high percentage in single stocks if I had followed this strategy (on positive, I’d have gained > 20% from those investments, but I also do need to keep an eye on the percentages from a risk perspective). If a single, non fund investment exceeds 10%, that should be a marker to stop doing this – unless it’s one of the major holdings I have previously identified (LifeStategy 60% ACC or Fundsmith).

So those are the new “robo” rules I’m setting my portfolio. Comments please!

Given I usually put a lot of planning into new shares in portfolio, this should help maximise returns over the year – if it works as well as the numbers showed last year (if I hadn’t had beers as I wrote this I would have done a nice diagram!), it’ll be a permanent feature. Analysing the numbers in excel, I missed out on ~ 4% of extra performance, which is reasonably substantial in both portfolios from not doing this in 2018..

I don’t need to be told the obvious downside, this could be chasing losses and may horribly fail – and it will multiply this failure if this IS the case, but my monthly reinvestment’s are split value wise – there should be a further post as I work out percentage top ups from the available funds, as I have an immediate feeling it needs to be proportionally weighted, which could result in some fun math in the future. But that’s after I try this for 6 months.

Targets / Performance

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A lot is said about investment performance targets – the goal of this investor is simply to outperform a Passive all-market global mixed fund. This should be possible, as Terry Smiths Fundsmith fund has proved for a few years now (he has comfortably beat this with his fund year on year). Can I do this? This is yet to be proven “consistently” nor in bad times.

This means in turn all non-Fund investments ideally need to return a average minimum of 8% a year. This is growth and dividends. However, this is on average so I do expect some investments to comfortably beat this, and some to not. I expect to measure this on at the earliest 2nd year of holding, unless the business fundamentals change (ie a profit warning).

Unlike Terry Smiths fund however, I do not intend to artificially limit myself to not investing in certain categories of the market, nor to copy “his” holdings – however I may duplicate a few when I agree. I would put Energy, Insurance, and Finance in the “investable” universe, as many times, you can tell when an asset is distressed and under-valued, and why shouldn’t you take “value” when it is offered. However for these classes of investment “buy and hold” may be unwise, this is a buy and exit when appropriate share-class in my book – as a personal investor costs of trading are quite low, so near irrelevant as a private investor. For example I see banking shares as having particular “value” at present (March 2019), as I suspect they are massively undervalued due to Brexit at present.

Fundsmith versus Vanguard 60 ACC fund 2010 to date… Source: Sharescope/Sharepad.co.uk

Disclosure: I do own the Terry Smith Fundsmith fund in both my ISA and SIPP as I regard him as the “active” fund to beat. If I manage this I have earned my %. Given Fundsmith charges are 1%, I have immediately saved that if I succeed. I am however more than happy to pay these charges for the investment performance to date (which is near triple the benchmark on average).

The fund chosen for “this” investor as the main “Target” benchmark however is the Vanguard 60% ACC fund – which in last 12 months has returned circa 5% – based on my own investment performance keeping this at ~ 25% of my primary SIPP fund. This is because it has a low management fee, is owned by the holders of the fund, and is therefore in “our” best interests to keep these fees low.

The Beginning

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So, to explain this blogs humble beginnings – I think I should explain where this started:

In October 2008, having never touched the stock market before, I signed up for a trading account, with the conviction that the market dips that were occurring to the banks at that time were something that would be corrected in the years ahead. It became a rush against time to open a brokerage nominee account to allow the trades that year to take place. I choose interactive investor, because at the time they had no fees for holding funds, just a trading fee of £10 per buy or sell. Things have changed massively since then, however looking back at my trade history from that time, I purchased Barclays at 65p a share, and sold at 90p from within an ISA trading account

I rubbed my hands with a tidy profit (which at the time was tiny!) – however this was the start of my trading journey. Since that year, I have kept the same ISA trading vehicle open, and the funds within have been growing steadily since.

I will ignore many of the in-between years, suffice to say I have made profit in most years, however I did under-perform the market massively for a couple of years due to bad performance. In 2018, I had to expand this investment due to personal circumstances – when I opened a SIPP which I aimed to trade similarly to the aforementioned ISA.

Where this blog starts is March 2019, where as of today, 24/03/19 I have a ISA with total value of £16,010 and a SIPP with £21,500 at “current” values. The two “pots” are traded very differently today, with the SIPP aiming to be more of a stable “income”/”growth” fund, and the ISA focusing more on growth alone. However these are not hard/fast rules – as in reality I won’t switch a mistaken INC fund purchase for a ACC fund due to fact trading fees would likely have a major impact on the profitability of such a move.

These are being funded at a rate of ISA at £250 a month, with SIPP at £1000 a month respectively, which I will aim to increase over time. This blog will aim to cover the monthly trades made.

As my “about” text reads, this is on the premise of being if I am able to outperform both “money managers” as well as passive trackers with just myself performing research in the evenings after my day job.