Review my stocks and shares ISA

sixpence.

Hi everyone

Here is a breakdown of my current stocks and shares ISA. What do people think? What would you change?

Now I am looking to invest in some funds that focus on the rising asian market, Japan and UK bonds.

Btw I am 28 years old. Thanks

Anpario Plc 12%
Aviva Plc 14%
Bank of Ireland 12%
Centrica 21%
National grid 28%
SSE 13%

System

What an odd collection of shares! More than 50% seems to be invested in the UK energy market. I would sell them all and buy a global investment trust or ETF.

sixpence.

Yeah to be honest, I started investing quite young and I wasn't really sure what I was doing. The shares all yield a pretty high dividend (average dividend for the portfolio as a whole is about 6.5%).

Right now I'm looking into the following funds for diversification:

Marlborough Multi Cap Income Class P - Accumulation
Jupiter Asian Income
Royal London Sterling Extra Yield Bond Class Y - Income
iShares Corporate Bond Index Class H - Accumulation (GBP)

Any other thoughts regarding these would be really appreciated!

Ray_Singh-Blue

I'm probably going to buck the MSE trend and say I quite like what you have there. It is clearly not a portfolio for widows or orphans, and I wouldn't like to retire on in. But you are 28 years old & can afford to take risks.

You have there a selection of solid domestic blue chip companies. The banks offer potential for growth in the right economic circumstances, and the utilities may provide some stability in an economic downturn.

If I was in your shoes I would probably hold on to what I had, and slowly add more diverse & international investments going forward. Which is basically what you are suggesting. There's no need to be too conservative - you have plenty of time to earn it back if you lose it - and there is a chance you may do really well. Who knows whether Japan will rise or tank? Either way, you will learn about your investing personality and preferences.

The main thing I personally would do (and have done) differently, is to put a global stock index tracker at the heart of my portfolio. It allows you to share in the fruits of global productive activity; acts as a kind of yardstick; and keeps you afloat if for some reason your individual investments turn out bad.

Anyway that's just my view, people skin the cat in different ways. The main thing is to skin a cat. Good luck & please keep us posted.

Thrugelmir

Why did you buy Centrica? Was it the yield.

What's the attraction of UK bonds at the current time?

economic

I am 34 and i started investing back in 2012 in an ISA so i was roughly the same age as the OP.

I also had a eerily similar portfolio to the OP - all high div stocks in energy and supermarkets.

Of course that did not work out so well a few years later with oil crashing and supermarkets getting hurt badly by competition.

Over the last 2 years i have, i would say, increased my knowledge about investing considerably. Losing money can really be a great learning experience. As long as you don't lose to much its fine to lose money but the key is to learn from the mistakes. If you are a beginner and do not have any help whatsoever from friends or family (i never got any help whatsoever) then you will make mistakes when starting out.

I now have a well balanced portfolio in my ISA, my pension and normal trading accounts with the following:

- half index trackers (half of which is global rest US so i am overweight US).
- single stocks in US banks, tech and some income stocks (tobacco and energy).
- trusts in tech and biotech

I have grown my total accounts from less then 100k back in 2012 to now approaching 400k (some from income from employment and rest capital gains/dividends).

I managed to benefit quite a bit from the rise over the last 2 years we have seen. And all because i learnt from my mistakes and re-positioned myself in time.

Investing is a continuous learning experience and you NEVER stop learning. You can take a more active approach like i have, or a more passive approach that is common on here.

I would say from your portfolio you need to understand about risk and diversification. Not sure how big your balance is but if you plan to maintain that stock composition i would be very careful as it looks very risky to me.

I would stick to a global fund and add some trusts in certain sectors like tech and biotech and maybe a few income stocks. then as you learn more you can add different trusts/stocks/funds or if you want to stick to passive then just stick to index trackers and trusts and add as you earn.

Ray_Singh-Blue

Great post by Economic sharing what he/she has learned through experience.

I entirely agree, but would make one balancing point:

The benefits of diversification are often stated here. Yet concentration, the opposite of diversification, is often the strategy that was chosen by abnormally successful investors. Over recent years, the people who made 1000%+ from Apple shares, gold, and bitcoin did so not by diversifying, but by holding and holding these investments as they broke through the stratosphere.

economic

Ray_Singh-Blue wrote: »

Great post by Economic sharing what he/she has learned through experience.

I entirely agree, but would make one balancing point:

The benefits of diversification are often stated here. Yet concentration, the opposite of diversification, is often the strategy that was chosen by abnormally successful investors. Over recent years, the people who made 1000%+ from Apple shares, gold, and bitcoin did so not by diversifying, but by holding and holding these investments as they broke through the stratosphere.

Agree and it goes back to the saying: "no risk, no reward". But from the OP's current portfolio, he/she stands pretty much 0 chance in obtaining 100% over the next 5 years let alone 1000%.

The more you learn the less diversified you can be so you can have 100 stocks only (and still be diversified) rather then the 1000s from a tracker.

But even if you think you are an expert at investing, having only 10 stocks is just crazy and i would not recommend it. Professional fund managers do this and there are very few who are consistently outperforming.

economic

there are also many benefits to trackers as if you have a large balance and only want to manage say half actively then you stick to a tracker for the other half. A tracker will auto re balance so you are always invested in the stocks that matter and included in an index on a market weight basis. you will never outperform or under perform the market though.

you could also add managed funds but this is very subjective on who you think would be good and fund managers do get things wrong and of course they eventually retire/die.

economic

Basically there is no one size fits all and everything has pros and cons. Be mindful of this.

bostonerimus

Ray_Singh-Blue wrote: »

Great post by Economic sharing what he/she has learned through experience.

I entirely agree, but would make one balancing point:

The benefits of diversification are often stated here. Yet concentration, the opposite of diversification, is often the strategy that was chosen by abnormally successful investors. Over recent years, the people who made 1000%+ from Apple shares, gold, and bitcoin did so not by diversifying, but by holding and holding these investments as they broke through the stratosphere.

Also the biggest losers have the same investing strategy. You can be sensible and maximize the probability you'll reach a sensible investing goal like having enough to retire by diversifying or you can maximize the potential gain and also greatly increase the probability of failure buy using a focused strategy.

The OP is very focused and does not seem to have a good strategy at all. I would advise they do some reading and come up with a diversified inexpensive portfolio of growth funds. At 28 why are income funds in the mix?