Member Info for Alas_Smith

Well… last year was grim. My portfolio contracted by around 22%, or in cash terms, 10 years average salary. I made NO changes, instead simply continued to do what I have always done and add cash each month to balance holdings at a max of 1.25% for each.

Sometimes there is a runaway success. For me, it is NVDA quoted on Nasdaq. I bought well and although want to add, feel it better to add to other winners such as adobe, microsoft, descartes and others.

Chucking cash at PROBABLE winners such ss RFX makes sense (to me) rather than trying to reduce losses.

FWIW, I wish to congratulate you in making your first tentative steps in building a portfolio. At your disposal are many more tools that I had when I started mine in 1979 - sheesh, is that really almost half a century ago? - when, in those days private clients with investment capital under £50,000 were despised and only considered viable with cash exceeding £200,000.

If it is of any consolation, I have not quite made £500k on my own account from investing small amounts regularly, but, following a recent inheritance my exposure to equities is a whisker under £1m but my assets now are close to £3m from house and art price inflation.

In the old days we had newspapers and for the wealthy the FT (sporting pink) provided information for the runners and riders participating. Nowadays, information is as good as instant so all you need to do is to find a company having consistent growth led by OLD managers (Halma is a great company for that) and find out as much as you can about the middle managers in the tiers immediately below director level in the company and those that they acquire and follow their careers.

This is, if you like, the "old boy" network information that was denied to me. It is from a system in which I was educated and hated.

Second, in the old days dealing charges were far higher than they are today and the minimum investment in 1979 was, to all intents and purposes was £1,000. Actually £1,500 is probably the realistic amount these days to invest in a single equity with dealing costs of a score (tenner to buy and a tenner to sell). Stamp duty is negligible.

This gives you an interesting conundrum - I don't really care where you invest geographically, politically, sector or any other reason simply that you understand the business in which you are investing. If you really understand bitcoin, and can explain why a solution to solve a mathematical problem that has no relevance to anything capable of production has a value other than passion, then you will make a fortune from luck.

If, on the other hand, you can see how a business generates growing turnover through organic and acquisitive growth and can plot the path of the managers appointed in such growth, then perhaps Darwin was correct. It is the same "old boy network", only this time there is no need to have the stigma of a 3rd rate school, a 2nd class degree and a 1st class brain to work the odds to your favour.

Best of luck
Angus

May for me has got a whole heap worse. Following a massive stroke my father has died and there is the matter of his estate to wrap up. Fortunately I am not an executor (that is the perogative of my younger siblings), but there have been express wishes for neither funeral nor memorial. So this makes mourning all the more difficult as a date for cremation has only finally been confirmed for next month.

I believe we are now in the early stage of a bear market, one that will last 18 months or so, so my decision to sit on cash for the time being is probably sensible. However, what is not known is where the opportunities will arise to begin to re-invest.

I am in no hurry at the moment to sell anything let alone add to holdings (except with my monthly drip).... and I am adding to RIO, NWG and EZJ if that is of any consequence.

And now, as we close April, my portfolio remains down, though the losses are down to 5 figures from 6. Still an awful lot of "money", but it is simply a change in wealth as determined on a piece of paper. Of course, it is not as attractive as being up on the year, but these things need to be put into perspective.

For a start, over the last 50 years the average gain has risen from 12.5% to 13.6% with a few years where gains exceeded 20%. And, 2022 might just be a year that produces negative returns. These, I have to be honest are rare, but not unkonwn. Usually there is good reason for such a fall. Sometimes it is simply picking the wrong equities but for 2022, there is a combination of multiple factors. Inflation, Russia:Ukraine war, political upheaval (election in France, local elections in UK, mid-term elections in US) and the need to revive welfare following a pandemic that, although off the radar, remains present.

I forecast a period that economists like to label as a recession. For me, I consider is breathing space.

So..... what to do and how to play things?

Well, in the past, dividends accumulated over 2 months would make a difference, but nowadays to have the same effect 20 months worth are needed. Perhaps this is due to my exposure to US growth stocks from my choice of high risk weighting.

I will review in a couple of months time.

In common with many, February saw further falls through the buildup of tensions in the Balkans. Things worsened with the invasion of Russia into Ukraine but, I believe that the worst is now over for investors, though grim for decades for both Ukrainians and Russians.

Having suffered a 20%+ fall in paper wealth, I took a little time once I returned from 3 weeks skiing with my family (that is quite a shock to the wallet these days) to look at where the gaps, strengths and weaknesses are in my portfolio and am happy that there is no structural change that is needed. I have a little cash that can be put to play, but not really enough to put into play at the moment. My average "unit" is to deal in £15,000 amounts and at the moment I don't have quite enough cash from dividends to make a new investment. I can therefore either strengthen, average or dispose of holdings before my next bargain is executed.
Despite my general bullish nature, I am going to wait. Probably a more difficult decision than filling in the gaps/adding to strengths or shoring up weaknesses.

For many, January was a shocker and for me it was no exception. Perhaps I am exceptional, but my portfolio is not limited to shares executed on the London Stock Exchange. The bulk of wealth consequent on the holdings owned are executed on foreign exchanges.

My risk is set to HIGH (which is perhaps more or less cautious than you might have for your wealth) and I expect average movement of at least 1% daily. In a bear market there will be more down days than up with the reverse true for bull markets.

So...... what sort of market are we in? My reading of the tea leaves is that there has been a battle going on between growth and value for the last year with an oscillation between the two. 2022, I believe will weigh more on the value side for growth and punctuated with the betrayal of strength from time to time from growth equities.

I am approaching the point where value holdings are not sufficient on their own account to support myself and wife through dividend income alone and it will be at least 8 years for that to trigger based on current and forecast yield. I am thus reliant to continue to align my portfolio for growth.

Doubtless you will have worked out my strategy - but for those that have not, I seek capital growth where, from time to time proceeds from disposals are apportioned between growth and value to cement a core that is aligned to provide for day to day needs and anything thrown off from growth holdings broadens exposure to value holdings as I advance in years and diminish in responsibility

Nick-Bris, putting things in perspective, thus far 2022 has got off to a poor start. If "wealth" were simply a note in an accountant ledger then I am slightly over £104,000 down this month from the point when I started this year.

The reality is that I have increased my exposure to 4 equities (already held) with dividends received and new cash introduced and will be adding more cash to holdings to take advantage of lower priced goods that are (as far as I am concerned) should be considered as part of my "weekly shop".

That "markets" have been spooked with the prospect of rising interest rates and a war, is part and parcel of the "rules" for investors. We all know that the past has repeated itself but that this time might be "different" and that the behavior is to do exactly the same as on previous occasions.

FWIW, I try to narrow my greatest exposure to those companies that have the greatest likelihood to prosper. And sometimes weight is added to a minnow and on others to the goliath. I've added to RIO, AFC, THRG . RDSB, MTU and IGC and have sold shares in AXI.

Paper losses are meaningless until crystalised. The culprits for colossal falls are from holdings quoted on NASDAQ such as NVDA, ASML, ADBE, MA. No biggie..... it will all come back in time. I console myself that falls are usually swift but gains are slow and sustained

Nck-Bris, certainly I sell holdings from time to time. These either are to remove my original capital and allow profits to run or if my attitude to risk changes.

For instance in 2017 I reduced my attitude to risk from HIGH to MEDIUM HIGH because of the beligerant stable genius and his international “policy” with China. It was perhaps a little early, but served me well as I sold up many of my holdings with earnings centered on China such as HSBC.

In mid 2019, my attitude to risk changed in anticipation of a change in politics in USA. I sold all of my real estate holdings, LAND, VIstry, Brit Land, Persimmon and bought shares in Nvidia, Adobe, AFC, Varta and Deutsche Bourse.

Deutsche Bourse was sold in 2020 in favour of CME and a reduction in ATT was made to buy shares in Thermo Fischer and ASML. Despite an eye watering daily capital fall in the crazy month (late Feb to late March) my portfolio recovered and put on 16.71% growth over the remander of the year.

This year had started so promisingly, but promptly fell (for me) to be 4% or so down. Not fussed and added to my holdings in RDSB, RIO and EZJ yesterday

Game developers are a difficult one - I do own shares in Microsoft which is one of the major games players - but it is not a sector that I either understand or am very interested in. Perhaps I should pay more attention.

SadAct, I have reviewed the year that has just passed. After commission, spreads and duties, ISA's put on 16.4%. My SIPP (and that for my wife) managed 15.2% and my dealing account managed 11.7%. ISA's represent 90% wealth and dealing account was raided to buy a new car so capital was withdrawn. The starting date values were deducted from the end date values and a simple result translated into a percentage. All dividends were re-invested. Capital was added to fully fund ISA and 2021/22 was the final tax year for such event without an inheritance.

My target is to seek overall growth in 2022 of 18% to include re-invested dividends. That works out to seek 1.5% growth compound on capital and 0.9% monthly dividend contribution. Dividends allow me to add either 1 new holding each year or, through top slicing /selling and existing holding buy at least 2 new holdings.

FWIW, I have started to reduce my exposure to Tech stocks by increasing my exposure to value ones.

Today is the same date that I have used since 1979 to re-set the starting point and both contributions added during the year along with any withdrawls are deemed to have been executed on 1 January. My average compound growth is 13.54% and there have been years when I have been down - the worst of which was a SIPP that lost 71% through the disastrous backing of a cousin in his launch of TUNG. Brilliant in buying companies, but useless in managing them, I've had many other lemons, of course.

Hi Topdog21, I have a small holding in IGC and will be increasing my exposure as funds permit. I am certainly not averse to EFT's though I prefer Investment Trusts so I will have a look at those two that you mentioned. It is much appreciated. Thank you.

Let me make it clear that I am neither a trader nor an advisor and that this (drivel) is simply the thoughts which I have for the year ahead. First off, it starts that my ONLY intention is to have my portfolio beat the market. If the market falls, then I expect not to fall as much, but if the market rises, I expect to do better. It has been so since I started to build my portfolio in 1979.

And, despite those that for whatever reason have yet to receive vaccine (and anyone over 40 as far as I am concerned is labelled a vaccination denier), the mortality from SARS CoV-2 is reducing but the morbidity appears to be increasing. This suggests to me that through a combination of vaccine and mutation we are approaching the point where we can begin cope with the effects and start to return to "normal". 2022 should be a year when nations can aggressively deal with the aftermath of a pandemic and re-build.

And, for me that provides opportunity. But, in terms of investments do I look to the "old" with value stocks or the "new" with the holdings that will be our future. And in truth, I don't really know for certain so I have to rely on good old fashioned common sense. BOTH, though with the bias on those companies at the cutting edge. So it is to increase my investment in AI, machine learning and technology as well as strengthening the value investments in mining and energy for infrastructure is always required.

I'm reducing my exposure to South America but increasing my exposure to India. The former because vaccine rollout is poorly documented and the latter as it is ready to take on China as the manufacturing powerhouse for the world and with that their workforce want some of the "action" enjoyed by their oriental counterpart. Again, this returns to "value" that should prosper but not innovation.

Any thoughts from others - either in criticism of my strategy or elements I have failed to consider. (Ignore geo-politics, please)

qamara, I know that a little time has passed since you posted, but I have only just seen it and am trying to put a few words down in reply. What I am conscious of, is that first you understand that I (and for that matter any other person that replies) is not qualified to give investment advice. In mitigation, I have been building my portfolio since the late 1970's and there is not much I have not seen. Sure, I've picked plenty of losers and made many mistakes, but I console myself that I have picked more winners in this time and my average growth for my portfolio is increasing. Since 1979, my average return has been 13.54%.

You wish to be like Warren Buffet (WB) eh? Well he has gone through the same process that you are going through and it started small but has grown. He started by picking companies that were off the radar - the "organic" sort of company that in the 1950's was a family affair. Everything that the company did was paid for with a mix of turnover and profit. This allowed the company to gain a larger footprint in a niche environment that was all done without fuss. And the company paid out dividends to the owners as it had done in the years before where Mum and Dad, plus children were the major shareholders but from time to time raised capital through floating off shares or the issue of new capital with a change in asset allocation.

And then, having cut his teeth to be a 3% shareholder in dozens of small "mom and pop" companies, he was able with the dividends to actually buy companies. These are household names these days.

So, your first question refers to how to become wealth by investment. Well, use the principal that you refer to - buy companies that are family owned and do not attract the attention of large investors. Nowadays this is probably those listed on AIM. And if you wish to emulate WB, then eliminate every company that does not generate a dividend.

That you live within your means is fantastic - stay like that - but you ask about taking profits. Well WB tends to hold companies for ever. But, for the ordinary punter (and like you I fall into that category,), you will not get rich unless you take your profits.

Can I suggest though, that rather than sell your profitable holdings sell those that are not making a meaningful contribution to your wealth?

Actually, why not read that paragraph again?

Sell loser early on. Re-invest the proceeds in businesses that will recover your cash. Hang onto the companies in which you do have holdings and add to your holding when you can. ALWAYS be on the prowl to re-invest the dividends received in companies that generate the returns that you want.

So... there are no tricks. A gain, however mediocre is a gain, but you will neither become poor nor rich until you dispose of your holding.

If you are after tips - think strategically - there is a shortage of computer chips, so buy ASML for instance. with flooding buy carpet makers etc

Camkite, your post is more or less complete tripe. There is healthcare in USA, the difference is that it has minimal public funding, and for the most part is provided through insurance. Governments govern, through the provision of laws and liberties and, from time to time with subsidy to those who, for whatever reason are in genuine need.

Next, Governments dishing out contracts to mates - there is anecdotal evidence for this when dealing with the most extraordinary 2020 and 2021, but, for the most part there are plenty of hurdles that those wishing to be considered for a UK Government contract. The median age from Covid might by 83, but from a medical perspective, my younger son began his medical career as a junior hospital doctor in Scotland. His 5 months on the Covid Wards and ICU were grim. Each shift he had to break the news of death to grieving families, the worst was to write out an AVERAGE of 5 death certificates each shift for 10 days. Doctors and nurses don't care about the age of a patient, they care about the health of a patient and the treatment that is needed.

There are plenty of zombie companies and, sadly some that have not been able to save any money at all to live from day to day sometimes. It really is not necessary to be disparaging. The UK economy has been hammered so that the overwhelming numbers of people that might otherwise have been laid off have retained jobs. The economy is returning, but it will be a different economy from before the pandemic. We will ALL have to pay for this over a decade or more. Governments are very good at raising money at good rates of interest. It is this that has provided the cash for MILLIONS to survive and lead a pretty good life despite the imposition of repeated lockdowns.

There is no substantial evidence to state origin from a laboratory discovered by the WHO. There is considerable evidence to confirm that it originated in a market. The produce being sold in the market are very different from those that we would expect in London, Milan, Madrid or New York. All those cities and their immediate vicinity had high incidence for morbidity.

I have no idea who David thingummyjog is and to what you refer.

I agree that the next 10 years will be a challenge, for some, perhaps many, but the last 10 years were a challenge, and each 10 year period as far as I remember. "Bad times" tend to be of short duration (18 months) but good times are only really viewed in hindsight.

I have no intention whatsoever in referencing your video to which you have directed attention. I suppose it is more tripe, punctuated through contempt and probably with both an agenda and a sinister undertone.

I am neither an accountant nor lawyer, but insolvency laws differ from country to country. Company structure might mean that a company files for bankruptcy protection in one country but does not affect its operations in another. Bankruptcy differs from insolvency. Insofar as UK is concerned, there is potential for severe penalty if a director knows that the company is trading while insolvent. This might include personal liability for debts incurred.

Do your research thoroughly before investing. Loss making company may be a better investment than one using sharp accounting practice to give the illusion of solvency.

You have not been singled out. Nothing for me either, but there are alerts to let me know that RNS has been issued so I am able to find the information from other sources.

Once you have established why you are making an investment in a company you should have a clear idea of the outcome that you are expecting to achieve. Although I am interested in ALL the equities and IT that comprise my portfolio, I tend only to pay close heed to those that present the greatest worry or potential.

My single biggest holding is currently MTU, a deliberate choice. My target is to ensure that no single componant has more than 3% weighting, EXCEPT where there are special circumstances. And in this case, MTU has been weighted to 8%, the increase made from the disposal of my housebuilder stocks and the reduction in my holding of Nvidia.

Provided that the UK continues to recover, the greatest growth should be with smaller companies. And this brings us to the point of a stop loss. A stop loss is there so that should your research be insufficient and you begin by losing money, you take your loss on the chin early and put money to work elsewhere.

What you are perhaps describing is the timing to take profits and ensure that your money continues to work effectively. So, evaluate your portfolio as a whole and review it every time information is released. Information might be political, economic or geographic.

Flooding for instance may affect insurers and farmers, but is good news for carpet makers. Cancelled elective operations through wards coping with Covid 19 has meant a huge backlog, but will be great for syringe makers, sterile swab makers and bacteria treatment companies when the back log is addressed.

Run your profits and keep your eyes peeled for different opportunities that start to unfold. Sell poor performers and strengthen better ones

Last year was unusual. If you had started your portfolio in late March you should have been up rather more than you were - I suggest you are taking your profits too early. If you are looking to concentrate your wealth into pooled resources, then that is not a bad idea, but you seem to only have focus on UK.

Investment Trusts are fabulous instruments. THRG has been in my portfolio since 2012 and I have recently placed a decent chunk in UIFS. CGI, AAIF, AUGM, HRI, ATT, APF, FSV, MTU, MTE, MINI, TEM and UEM also feature in my portfolio. there are others which are not easily traded such as Aubrey and a couple of the Polar Capital funds (IT and Insurance feature for me)..... so those are a few more ideas to consider.

I am not a fan of banks, am reducing my oil shares and increasing my exposure to IT, healthcare and consumer discretionary. The most recent changes (for me) have been to reduce my holding in Nvidia, sell all housebuilders and increase my holdings in TSTL and MTU and add a new holding, ASML (semi conductor maker). I have also strengthened my holding in RFX, a pawnbroker.

I do wish you great success with your investments - cut losses early, run profits and understand what the business does and how it makes money - listen to those that have taken a short position and ask for their explanation. They could just be correct. Most are not. Put all "traders" into a filter as most lose everything within a few transactions and are simply a distraction. Their opinion is usually received and probably wrong. Just look at the disclaimer for IG and all the other sites offering CFD's as to how many people actually lose money.

The first investment might be to buy "The Intelligent Investor" written by Benjamin Graham. Yes, I know it is dated, yes, I know it focusses on USA and everything is $ based, but it is the principles that need to be understood. Benjamin Graham was the mentor for Warren Buffet.

Once you have read the book and understand how to read a balance sheet discovered what "intrinsic value" actually means, then you are probably far wiser than 90% of the contributors to this site. From a different perspective, understand what you want to achieve define your goals to achieve it and be prepared for the unforeseen circumstances. Of course, the extent to which they are unforeseen is dependent on the circumstance and the extent to which they were unforeseen.

Good luck. I've been at this for over 40 years and although my average return is a compound 13.5%, I don't think I have got it perfectly right with every share that I have bought. I hasten to add that nowadays I am cutting my losers earlier than in the past and running my winners longer. It is improving my overall return over the last 6 years to 18% annual compound growth. I've still got some holdings that are in the starting blocks and at least 3 that should be moved to life support!

Talk to Charles Stanley on 020 7739 8200 as you are just inside their minimum level for discretionary management. The switchboard will be able to transfer you to the appropriate wealth manager. They do have offices throughout the UK, if that is easier for you. They look after my accounts since 2012 and, in time, will look after my childrens investment. Since 2012, my investments have risen 7 fold.

I do not begrudge a single penny of their eye watering fees with that sort of return!

Sectors where I expect growth:

IT
Healthcare
Consumer discretionary
Renewables

With the above in mind, consider Allianz Technology Trust and ISPY. The former gives international exposure to the IT sector and has rewarded shareholders many times over for the last decade. Whether we like it or not, spending on IT is going to increase as hardware becomes obsolete or unable to cope with the changing pace that technology brings. They also have exposure to AI with the likes of NVDA as holdings. ISPY is concerned only with cyber technology. Again, a growth area in focus at the moment. Neither pay a dividend. I am not a great fan of banks, but Financial Technology is in the ascendency - consider Augmentum as a holding.

For Healthcare you could do worse than look as Tristel. Share price has been hammered today, but a good entry point. They are in the business of antiseptic wipes and cleaning products to ensure patient safety. The sp will recover once elective surgery resumes. That will be on the cessation of the 3rd wave that has begun and probably consultant led initiative to clear the backlog. Another share to consider is HEAL.

For the consumer discretionary side of things, this is actually quite tricky. The growth in this sector has been led by the West and now these persons are middle aged and have large mortgages and big debts. Todays 22yr old wanting to spend money is riddled with student debt, therefore you really need to look outside the UK for growth - the countries that want this are South America, Africa, India etc. the company that specialise in such things are highly focussed - Aubrey, though trying to get shares is very difficult indeed.

While house building is going to be cyclical, consider Ibstock. After all, every house needs bricks!

For the renewables, Hydrogen is in vogue and AFC energy might be worth considering.

Don't dismiss the investment trusts that provide ballast - UEM, CGI and APF for instance. Exposure to international markets healthy dividends etc.

Recovery stocks can also provide important short term growth - I like travel, cardboard and to an extent oil - EZJ, SAGA, SMDS and RDSB are worth looking at from a recovery, growth and dividend perspective. If inflation is a worry, consider long term index linked gilts such as T44

Hope this starts to help. Let us know how you are getting on and if these ideas are of appeal.