Take a peek at my hand?

racing_blue

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Hello.

I'm an amateur investor with a stocks and shares ISA account since 2006. This is a diary type thread to share my thoughts and to chart the ups and downs.

The diary started on 31st December 2014, and I update it at the end of each quarter. I am particularly grateful for advice from other investors & take it on board.

Thankyou for reading.

RB, June 2016

Original post follows:



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These were my investments at the close of play on 31st December 2014:

Cash, 28.2%
Tesco, 15.5%
UK all share ETF, 11.8%
Aluminum ETF, 10.1%
BRIC 50 ETF, 5.3%
Oil ETF, 5.2%
Electricitie De France, 5.0%
Sainsbury (J), 4.2%
Gamesa, 3.5%
Emerging Markets Small Cap ETF, 3.5%

There are a few smaller ones too, but they only form 8% of the portfolio in total.

While the current portfolio is not necessarily one I would choose from scratch today, it is what it is after a few years of watering and pruning. I’m looking for 60% equities with a mainly buy and hold intention. On 31/12/14 was roughly on track with 57% equities.

To minimise the chance of making bad decisions… I don’t make many decisions. I chew them over good and proper and allow no more than three trades per quarter.

So far in 2015 I have done nothing, but am steering towards:
1. Selling some Tesco which is too prominent & needs trimming;
2. Buying a Nasdaq tracker to get some exposure to US tech companies in the long term
3. Buying a Greece index tracker (GREK) for a bit of white water… the Greek index is languishing at around 20% of where it was 4 years ago.

Should I reveal the value of the portfolio? It is not really important in performance terms. But just for perspective, it was worth £85,726 on New Years Eve 2014. I expect to some this will seem like a lot and to others it will seem like small change.

So there you have it, hope that is of passing interest to someone, will update from time to time, grateful for any comments of course- “you are no Warren Buffet”, “that lot’s going to Hell in a handcart”- and the like. Please feel free to slap me with a wet fish for buying £10,000 of aluminium, I still cannot recall exactly why but it seemed like a good idea at the time.

Regards RB

InvestInPoker

Ballsy

....

mark13

Good on you, thanks for sharing. Interesting mix. I have Tesco, that ships gonna turn round.

Ryan_Futuristics

I'd say your investment strategy seems a little confused ... Buying Greece now (when things could still get much worse), and buying the Nasdaq (when things are extremely expensive)

And then supermarkets and commodities? Not set for the greatest year, I suspect

I posted these earlier - how you can combine value and momentum, to help you avoid buying cheap when things are still likely to nose-dive, and help you buy more often on the turn

http://www.starcapital.de/files/publikationen/2014-09_Value_and_Momentum.pdf
http://www.millennialinvest.com/blog/2014/12/9/value-momentum-the-tortoise-and-the-hare

Otherwise I'd be inclined to build a bit more of a balanced portfolio

TheTracker

Ryan_Futuristics wrote: »

I'd say your investment strategy seems a little confused ... Buying Greece now (when things could still get much worse)

20 days ago ...

Ryan_Futuristics wrote: »

the fact Russia and Greece are getting cheaper - about as cheap as markets get - is a huge opportunity

Yet somehow, in RFs head, I expect these are perfectly sane statements to make together. Maybe there is a chart to come...

racing_blue

I accept RFs points & do not pretend to be anything other than confused a lot of the time.

However to mitigate this I have settled on a few rules. For example the 60:40 asset allocation rule, and the low trading frequency rule. And that about half my equity holdings should be in broad index ETFs. These rules trump everything else and limit the number of opportunities I have to balls thing up.

I just took the plunge with the Global X Funds FTSE Greece 20 ETF. Bought 600 units at £8.35 so it is now around 5% of my portfolio. The Greek index is 10% of its 10 year high. I don't know if it will get worse, but I don't think the index will vanish and so I'll probably sit on this for about 5 years then have a look.

So that's one decision made.

Still mulling over the Nasdaq... I'm driven by the idea of owning shiny stocks like Google, Microsoft, Tesla, Amazon in the same irrational way that as a boy I used to lust after Star Wars and then Dungeons and Dragons figures. It pains me that I have seen them rise in value year after year and never found an entry point. Yes they are expensive but this is where I'm considering calling on efficient market theory to justify my lust for shiny things. I appreciate that this is a double standard which I have not applied to the Greek ETF but hey, that's embracing the confused bit. The lightly hedged decision might be to set up a monthly purchase of say £500 over the next 2 years rather than to jump in. Still pondering this one.

Hope all this doesn't sound too self indulgent. This is very real to me and I value your opinions but also feel that others might gain something from diary posts like this... even if just "don't do it like that, son"...

bowlhead99

Great minds and all that - I bought some GREK not too long ago for below £8 which I'm hoping will have turned out to be a great example of 'calling the bottom' as it has been up at closer to £9 in the last couple of days.

I agree the index won't vanish but 10% of its 10-year high doesn't mean it is going up 10x any time soon. Still, when we lose 50% of it we can look forward to it going up 20x instead. Almost a tenth of the index is in National Bank of Greece which is below 1% of its 2007 share price, but a complete reversal seems rather far fetched unfortunately

It's quite a mixed bag with banks to telecoms to cement to jewellery to toyshops to coke bottling in the top 6 or 7 holdings, and only 20 stocks total. Whether we see a consumer or construction or banking revolution of fortunes in the next couple of years, and in which direction, might be fun to watch although I don't really take these narrow indexes too seriously, and am only investing fun money.

Thrugelmir

racing_blue wrote: »

Cash, 28.2%
Tesco, 15.5%
UK all share ETF, 11.8%
Aluminum ETF, 10.1%
BRIC 50 ETF, 5.3%
Oil ETF, 5.2%
Electricitie De France, 5.0%
Sainsbury (J), 4.2%
Gamesa, 3.5%
Emerging Markets Small Cap ETF, 3.5%

In a word "muddled".

Looks like a number of individual punts rather than a cohesive plan to build a portfolio to achieve a particularly objective.

Adding cash and food retailers together you've more or less 50% of your portfolio which is going to struggle to show any growth.

Tesco's is the new Lloyds, i.e. going to recover tomorrow. However tomorrow is years away. Tesco's has deep rooted problems that will be resolved in time. There's going to be some trimming of the business in the process. With cash conservation being key.

Linton

racing_blue wrote: »

....... it seemed like a good idea at the time.

I am afraid that is exactly your problem. Your portfolio reads exactly like that.

Suggest you consider a more controlled approach....

1) What do you want from the portfolio in what time frame? Steady growth? A quadruple or bust fling? 5 years? 30 years?

2) Therefore what % in equity or less volatile investments.

3) For the equity at a high level where am I going to invest? Geographies? Sectors? Company sizes? etc In what %s.

4) What funds or individual investments will meet this strategy in what %s.

Then you never need make a decision again, just put new money in or rebalance to keep the %s constant. OK perhaps once a year review the situation and check whether anything significant has changed in your requirements.

coyrls

racing_blue wrote: »

However to mitigate this I have settled on a few rules. For example the 60:40 asset allocation rule, and the low trading frequency rule. And that about half my equity holdings should be in broad index ETFs. These rules trump everything else and limit the number of opportunities I have to balls thing up.

Are there parts of your portfolio not listed? If not, you're not doing very well on your rules. 60:40 asset allocation usually refers to shares:bonds. I don't see any bonds in your portfolio; 28.2% is in cash but that is not 40% nor bonds. On your second rule, the only holding that could be described as a "broad index" is UK all share at 11.8%. I wouldn't really describe BRIC 50 or Emerging Markets Small Cap as broad indexes but even if you do, your broad index holdings would only amount to 20.6% not 50%.

bowlhead99

In the OP he mentioned he was 57% equities at year end - I took it to mean the 'not equities' being his 43% cash and aluminium and oil (presuming the latter is oil the commodity not oil companies), and the other 8% of stuff that he didn't bother to list for us was equities (small allocations to historic failed individual equity punts?).

He gave the impression he knew the high allocation to aluminium was crazy too.

Also on the ETFs he was saying half the equity component should be in broad index ETFs, not half the whole lot. The 20.6% is only 36% of the 57% equities but presumably that ratio will be creeping up towards half the equities when he gets round to adding in the Greek ETF and the Nasdaq ETF.

IMHO, a philosophy of 60% equity (half in broad ETFs) and 40% in a range of cash, bonds, commodities, real estate and other strategies etc etc etc, and letting that 60:40 split and the broad index coverage trump everything, is not fundamentally flawed. The implementation here is though.

The ETFs being used are not particularly broad (UK largecap, BRIC largecap, EM smallcap, Greece and NASDAQ tech are all quite specialist indexes and a huge swathe of the world's marketcap of investible equities is missing).

The 40% is currently just high conviction between cash and a couple of specific commodities. It's true that cash and aluminium do not move hand in hand with equities: however, cash does not really move at all ; while aluminium is an industrial metal and so is unlikely to be powering up in price if the world faces a recessionary demand slump and reduction of QE. I wouldn't say the 40% is doing a great job of being the counterpoint to equities.

So, if we are looking at a man trying to clear up his 'before' picture from 31 Dec, how many more moves until we see the 'after' when he has gone completely over to a balanced 60:40 including broad indexes for the equity core? Quite a lot, I would suggest.