Take a peek at my hand?

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  • Malthusian
    Malthusian Posts: 10,861
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    It was 25% stocks, 25% cash, 25% bonds, 25% gold.
    50% of the portfolio split between something that offers no real returns and something that offers no real returns except white noise? I should certainly hope that it offered less volatility than 100% equities; if it had the same or more despite keeping a very large chunk in cash, something is seriously wrong. Pretty much any portfolio can be shown to be a good investment - it's just a matter of picking the right time period. :-)

    It just doesn't have any logic other than superficial mathematic simplicity. Why 25% in equities but 25% in a single commodity? It would make as much sense to say 25% in bonds and 25% in Tesco. If it was consistent it would say 25% in a broad-basket commodity fund. But zinc and soybeans and heating oil don't have the same visceral appeal as gold.
  • zolablue25
    zolablue25 Posts: 1,652 Forumite
    Linton wrote: »
    Sorry, but it's not a good example to follow - there are no positives. OK, if you are playing with money that doesnt really matter then it adds to the fun. But it's not investing, it's gaming or gambling. If the money involved is life-changing the game being played is Russian Roulette.
    I didn't say I, or anyone else for that matter, should follow the example. Quite the opposite in fact as I said I didn't have the guts to do it. I even stated that it could be suicidal (from a financial standpoint) to go down this route, but it is Racing Blue's money to do with as he wishes and I, for one, hope it pays off for him. Odds are against him, but it's up to him how he goes about it. In the meantime I will continue to read his thread on how he is progressing.

    I do think, as I stated, that it makes a good counterpoint to all the other threads on this forum.
  • Thankyou! All criticism welcome and please keep it coming. I find myself agreeing with Linton. Although my left eyebrow twitches a little to read "there are no positives."

    Rewind about 5 years, which is when I started investing. I was quite clueless but lucky to be starting off in a down market. I made some risky investments. More paid off than not, and my main mistake was selling things too soon at some arbitrary point: when they have risen 10%; when they have increased in value by £500 or £1000; phase of the moon etc.

    I missed out on the big gains that way, but even so, last time I totted up, my net total investment to date was £64,038 and the portfolio was worth £114,510. Lucky timing of the entry point probably accounts for about 150% of these gains.

    And so the starting point of this diary was the quite random selection of investments - gambles some might say - that I had held onto because they had not increased in value as I hoped. EDF, Tesco, some Aluminium, Sainsbury and so on.

    I know that I need to bring some method and order to proceedings. So that is what is going on now. I thought long and hard about a target asset allocation: 60% equities, 40% bonds was the starting point. And then, rightly or wrongly, decided that cash and commodities were preferable to bonds, although remain open to suggestion here. I'm trying to bring some discipline to the party too, with some tight rules (max 3 trades per quarter etc) which I have so far not broken.

    So: defining an asset allocation and staying the course: two investment behaviours which a lot of people would mutter about in positive tones. And also you are seeing me trying to consider my risk tolerance.

    Is this portfolio risky? Unquestionably. Am I seeking risk? Yes, absolutely. I'm not very old. This money is perhaps to fund my childrens' university education; to maybe pay off the mortgage early; and if I don't crash and burn perhaps to fund the years between early retirement and the defined benefit pension I hope to draw in my dotage. If it all evaporates and oxidizes, so be it, I'll work a bit longer or make the kids get loans. Russian roulette is too strong- I won't be living under a bridge, even if emerges that Aluminium causes the development of a third testicle, VW cars run on crushed orphans, and Tesco have been systematically raiding graveyards to make quarterpounders.

    So sure, please nobody rush out tomorrow to buy a Greek ETF, several tons of Aluminium and 23 shares in Volkswagen. Simply get some popcorn and have a gander, and when I make mistakes you'll see them, and maybe you can avoid doing something similar.

    For the record, I have never set foot in a Casino or bought a lottery ticket. Although I did once bet my sister that she couldn't jump over a high fence wearing a chicken onesie.
  • racing_blue
    racing_blue Posts: 961 Forumite
    edited 1 January 2016 at 10:00AM
    1 year on: Quarter 4, 2015

    The only trade I made this quarter was to sell the Volkswagen shares I bought in September. I thought there was maybe too much smoke blowing on the emissions scandal, and took a punt which paid off.

    However, a couple of years ago I bought into Infinis Energy at the IPO. Green energy, government tariffs, what was not to like? Infinis was just taken private again by the majority shareholder, crystalising a loss of 30% for little me. Confirming my suspicion that if you play with the big boys, you may get a wedgie.

    10 holdings now make up 88% of my portfolio:

    Vanguard All World ETF, 30%
    Cash, 24%
    Lyxor Commodities ETF, 8%
    ETFS Aluminium, 7%
    Tesco, 6%
    Ishares BRIC 50 ETF, 4%
    Sainsbury (J), 4%
    Global X Greece 20 ETF, 3%
    MSCI Emerging Markets Small Cap ETF, 3%
    ETFS – Brent Oil, 3%

    Are you interested to know how this portfolio performed this year?

    On 1st January it was worth £85,276
    Over the year I invested £19,757
    On 31st December it was worth £98,382

    So I reckon in performance terms, down 6.3% which is…

    … not as bad as I feared!

    Some of you may think that sucks, you may have had portfolio gains this year of 10%, 20%+. I'm genuinely pleased for you and would be very grateful if you felt able to share your methods and decisions, as I have tried to do here.

    Many equity markets are down this year. Most commodities are WAY down. They seemed cheap at the start of the year & I piled in licking my lips. But the Bloomberg Commodity Index dropped a further 30% during the year plumbing a 16 year low this month. Didn't expect that.

    And neither perhaps did some fund managers. Take JPM natural resources (often discussed in this parish) which is down another 34%. Threadneedle Latin American – down 29%. SF Webb Capital Smaller Companies- down 28.59%. Templeton Asian Growth, -down 26.22%. And so on.

    Am I happy, overall? Yes. I accept that is a risky portfolio. The risks I have taken have not yet paid off. But I stuck to the plan- making no more than three trades per quarter, focussing the mind, reducing costs. And arriving at an asset allocation I can live with: 60% equities, 20% cash, and 20% other investible stuff like commodities.

    So for now I’m going to stick to the plan, rebalance and wait.

    One small change for 2016: as suggested by Grey Gym Sock I want to define better the strategy for the 30% actively chosen equities. Steering towards splitting this between sector equity ETFs, dabbling in some managed funds, and of course a handful of stocks picked by yours truly.

    Once again, thanks for reading, and for any advice. May I wish you happiness, health and wealth in 2016 – in that order, if you like.

    RB
  • TheTracker
    TheTracker Posts: 1,223
    Combo Breaker First Post
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    Your return is probably different than -6.3%, unless you invested the £19k on day 1. If you invested the 19k on day 365 your return was -7.8%. The truth is somewhere in between as you probably drip fed. You can calculate the real return with a "money weighted return" spreadsheet that uses the XIRR function. I often wonder how many people who post returns on MSE calculate the return correctly.

    Sorry, I don't mean to tell you that you may have done worse than you thought, but rather to give a pointer into accurate tracking of your own situation. I commend you for examine your finances and sticking to your plan.
  • racing_blue
    racing_blue Posts: 961 Forumite
    Update # 5: Quarter 1, 2016

    I was holding a dispiriting collection of investments in 2014. I wasn’t comfortable with it, and wanted inspiration. So I aired it here, and you guys did not disappoint.

    :beer:

    “In a word: muddled” (Thrugelmir, post #8)
    “That’s not investing, it’s gaming or gambling” (Linton, post #31)
    “Rather you than me” (takecareofthepennies, post #17)

    :money:

    Some posts made me think:

    Grey Gym Sock in post #25 said “20% cash is a bit high, how about amending the label to cash/bonds?”. And having thought about that, yes. Fixed income rather than cash allows for sideways movement into bonds and possibly other things, should it seem right in the future. And in post #27 he (or she?) pointed out that commodity ETFs bring unpredictable tracking errors. This rang true. Linton in post #26 said “your commodity investments are all in ETFs, you would do better to invest in mining companies…” and gave some compelling reasons.

    Last year commodities dropped yet more, so to rebalance up to 20% I decided to buy Blackrock’s World Mining Trust, rather than another commodity ETF. Blackrock World Mining Trust invests mainly in mining companies. I hope there should be very little downside now. If and when they rise, I may start to move away from commodities - but not from speculating, with this 20% of my portfolio. Blackrock World Mining Trust will probably be first to go as it has a management charge of 1.4%.

    Also this quarter topped up index trackers VWRL and VUKE. That makes three trades this quarter- on target.

    My portfolio now looks like this:

    Equities (60.6%)
    VWRL Vanguard FTSE All World ETF, 31.2%
    TESCO PLC, 5.8%
    ISHARES FTSE BRIC 50, 4.3%
    SAINSBURY(J), 4.1%
    SSGA SPDR MSCI EMERGING MARKETS SMALL CAP ETF, 3.1%
    GLOBAL X FUNDS FTSE GREECE 20 ETF, 3.1%
    ZOOPLA PRPRT.WI, 2.1%
    VUKE Vanguard FTSE100 UCITS ETF, 2.0%
    EDF, 1.8%
    ROYAL DUTCH SHELL PLC 'B', 1.7%
    CIRCLE HOLDINGS ORD 2P, 1.0%

    Fixed Income (19.4%)
    Cash ISA, 17.4%
    VANGUARD FUNDS PLC UK GOVERNMENT BOND ETF GBP, 2.0%

    Commodities/ speculation (20.0%)
    Lyxor ETF Commodities TR/Jeffries CRB C GBP, 7.8%
    ETFS - DOW JONES-UBS ALUMINUM SUBINDEX, 6.9%
    ETFS - Brent Oil 1 month USD, 2.7%
    Blackrock World Mining Trust, 2.5%

    And that’s it. This portfolio is now worth 29% of my mortgage.

    Thanks TheTracker for explaining Excel’s XIRR function in post #36. I'm now able to accurately measure internal rate of return.

    Elsewhere someone pointed out this course which I have enrolled on.

    I’m grateful generally to everyone reading and commenting on this thread. If you know of anyone else sharing the granular detail of their investing like this, please post a link, I would be really interested.

    Until June…

    RB
  • Update # 6: Quarter 2, 2016

    I got a bit kinky logging into my portfolio several times per day last week, around the EU referendum. It was fascinating to see UK banks and builders get clobbered, while commodities and US shares stood up against the falling pound. Just beginning to appreciate the value of being diversified in geographies and currencies through VWRL etc.

    But there is no need to get kinky- I’m a buy and hold investor, not a day trader as someone helpfully pointed out. Healthy to back off a bit now.

    Did three things this quarter:
    1. Topped up FTSE 100 tracker VUKE
    2. Bought shares in Tesla. Hope I have bought into one of the future's great companies. Maybe have paid too much though.
    3. Post Brexit vote, bought shares in Lloyds Banking Group, which I have fancied for a while.

    My holdings are:

    World Equity Tracker 30.4%
    • VWRL Vanguard FTSE All World ETF 30.4%
    Equity Funds 15%
    • VUKE Vanguard FTSE100 UCITS ETF 5.1%
    • ISHARES FTSE BRIC 50 4.4%
    • SPDR MSCI EMERGING MARKETS SMALL CAP ETF 3.0%
    • GLOBAL X FUNDS FTSE GREECE 20 ETF 2.5%
    Equities 16%
    • TESCO PLC 4.8%
    • SAINSBURY(J) 3.1%
    • ZOOPLA PRPRT.WI 2.0%
    • EDF 1.9%
    • LLOYDS BANKING GROUP 1.7%
    • TESLA MOTORS IINC 1.6%
    • CIRCLE HOLDINGS ORD 2P 0.9%
    Fixed Income 14.8%
    • Cash 13.0%
    • VANGUARD FUNDS PLC UK GOVERNMENT BOND ETF GBP 1.9%
    Commodities 23.8%
    • Lyxor ETF Commodities TR/Jeffries CRB C GBP 8.6%
    • ETFS COMMODITY SECURITIES LTD ETC - DOW JONES-UBS ALUMINUM SUBINDEX 7.3%
    • ETFS - Brent Oil 1 month USD 3.1%
    • Blackrock World Mining Trust 2.8%
    • ROYAL DUTCH SHELL PLC 'B' 1.9%

    I’m still unsure about commodities. It is difficult to establish quite how much the value is being eroded by the regular rolling of futures contracts within ETFs. I'm keeping a close eye and have an exit strategy, and am considering other options to commodity ETFs in future. They have however been the stars of the show this quarter, up around 20%, Blackrock World Mining Trust is actually up 61% since I bought it.

    Bottom of the class are Sainsbury (-16%) and yet again Greece (-10%)

    Always grateful for comments and advice & will have a pop at answering any questions. You may have noticed, I had to tweak my username due to a forgotten password and an inactive recovery email account. Actually wish I had chosen Blu Ray Singh, too late now.

    Cheers RB
  • Startup1985
    Startup1985 Posts: 107 Forumite
    Update # 6: Quarter 2, 2016

    I got a bit kinky logging into my portfolio several times per day last week, around the EU referendum. It was fascinating to see UK banks and builders get clobbered, while commodities and US shares stood up against the falling pound. Just beginning to appreciate the value of being diversified in geographies and currencies through VWRL etc.

    But there is no need to get kinky- I’m a buy and hold investor, not a day trader as someone helpfully pointed out. Healthy to back off a bit now.

    Did three things this quarter:
    1. Topped up FTSE 100 tracker VUKE
    2. Bought shares in Tesla. Hope I have bought into one of the future's great companies. Maybe have paid too much though.
    3. Post Brexit vote, bought shares in Lloyds Banking Group, which I have fancied for a while.

    My holdings are:

    World Equity Tracker 30.4%
    • VWRL Vanguard FTSE All World ETF 30.4%
    Equity Funds 15%
    • VUKE Vanguard FTSE100 UCITS ETF 5.1%
    • ISHARES FTSE BRIC 50 4.4%
    • SPDR MSCI EMERGING MARKETS SMALL CAP ETF 3.0%
    • GLOBAL X FUNDS FTSE GREECE 20 ETF 2.5%
    Equities 16%
    • TESCO PLC 4.8%
    • SAINSBURY(J) 3.1%
    • ZOOPLA PRPRT.WI 2.0%
    • EDF 1.9%
    • LLOYDS BANKING GROUP 1.7%
    • TESLA MOTORS IINC 1.6%
    • CIRCLE HOLDINGS ORD 2P 0.9%
    Fixed Income 14.8%
    • Cash 13.0%
    • VANGUARD FUNDS PLC UK GOVERNMENT BOND ETF GBP 1.9%
    Commodities 23.8%
    • Lyxor ETF Commodities TR/Jeffries CRB C GBP 8.6%
    • ETFS COMMODITY SECURITIES LTD ETC - DOW JONES-UBS ALUMINUM SUBINDEX 7.3%
    • ETFS - Brent Oil 1 month USD 3.1%
    • Blackrock World Mining Trust 2.8%
    • ROYAL DUTCH SHELL PLC 'B' 1.9%

    I’m still unsure about commodities. It is difficult to establish quite how much the value is being eroded by the regular rolling of futures contracts within ETFs. I'm keeping a close eye and have an exit strategy, and am considering other options to commodity ETFs in future. They have however been the stars of the show this quarter, up around 20%, Blackrock World Mining Trust is actually up 61% since I bought it.

    Bottom of the class are Sainsbury (-16%) and yet again Greece (-10%)

    Always grateful for comments and advice & will have a pop at answering any questions. You may have noticed, I had to tweak my username due to a forgotten password and an inactive recovery email account. Actually wish I had chosen Blu Ray Singh, too late now.

    Cheers RB

    I would be interested to here how much you gained/lost through the whole Brexit thing so far. Have you taken a hit or come out on top ?
  • I would be interested to here how much you gained/lost through the whole Brexit thing so far. Have you taken a hit or come out on top ?

    VWRL +9%
    other funds +4%
    other equities -1%
    commodities +10%
    overall +6%

    I think this is mainly currency movement
  • TheTracker
    TheTracker Posts: 1,223
    Combo Breaker First Post
    Forumite
    VWRL +9%
    other funds +4%
    other equities -1%
    commodities +10%
    overall +6%

    I think this is mainly currency movement

    Yes, VTSMX and VGTSX are basically unchanged since the 22nd, with a weeklong dip.

    It's our purchasing power that's dropped. For those that are more than 50% on the way to filling their retirement pot not too bad, for others not so good, despite the apparent rise.
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