Member Info for Alas_Smith

Will…. You have neither disclosed your attitude to risk, timescale, geographic preference, sector weighting or a host of other information that a professional wealth manager would need. Fortunately, I am not a wealth manager, have no authority to give financial advice and, for the ourpose of answering, will only look at companies quoted on the UK exchanges.

The sectors that I believe are likely to do well are IT, healthcare, renewables and discretionary consumer. I’ll put together a few ideas later today for you, if that would help?

Crescendo, I too record portfolio performance and have done for more than 40 years. Since 2012, these have been recorded in electronic format on a spreadsheet, and prior to that in a ledger. Since my portfolio has completely changed in the last 10 years and bears little relationship to the formative years, paper ledgers have no benefit other than the statistical summary for each year.

What is much more useful is to use the information collected so that I have a pretty good idea of how my finances are expected to behave based on deeper analysis of monthly performance. The adage of “sell in May” no longer works following the ascendency of A dealing.

My base target is to beat the market. My secondary target is to achieve a minimum of 12.5% growth annually and further broken down so that there is weighting based on historic monthly movement consistent with broad patterns.

With linked spreadsheets I am able, not only to forecast portfolio growth to monitor results against forecast for many years ahead, but also future years use the historic data. I also know that on a rolling 6 year period my typical return will have 3 normal years, one terrible year and 2 great years.

2021 was forecast to be a great year (and is proving so), 2022 an average one and 2023 a poor year (5% growth including reinvested dividends).

Spreadsheets allow for marginal notes to be made…. I record world events that have dramatic effect (terrorism at World Trade Center, recent market collapse in Feb / March 2020, announcement of viable vaccine, election of Biden as President) as these either change market direction or investor sentiment.

Insofar as a database is concerned, I am not aware of one, but spreadsheets are designed for the manipulation of numbers. Databases would not necessarily provide any better, different or greater information, but in this instance, spreadsheets are more efficient and plenty of secondary information can be found in csv or xls format

Learn how to read a p/l account and a balance sheet. Concentrate on cash generation and debt. Technical analysis gives a visual guide to the past and IMO gives some guidence on when to sell rather than when to buy.

Most investors, whether they understand it or not like to see a visual confirmation of their decison.

The “bible” is by John Murphy, Technical Analysis of The Financial Markets. A heavy read which has to be taken with a pinch of salt as most examples seem to demonstrate that TA somehow is the dogs danglies.

Sorry if I appear to be ****ing on your enthusiasm, but the cost of executing a bargain under £1,000 is going to be expensive relative to the size of the bargain executed. FWIW, my own affairs are managed on a discretionary basis but I look after those for my children (and some minor accounts to keep my eye in). I therefore have some sympathy with the difficulty in building a portfolio without the benefit of capital and soley reliant on surplus income.

When I began investing in the late 1970's things were very different. We had newspapers that provided information and to execute a bargain simply walked into local bank, placed an order to "buy" or "sell" and for the domestic punter this was always "at best". Yer paid yer money and a few days later you received a certificate.

Nowadays, there is electronic dealing at very low cost and there are all sorts of instruments that van be used to build capital from income that include trackers and investment trusts. If you have just £50 month to invest, then this equates to £600 annually so you can probably afford to place 1 bargain every 18 months directly in an equity. There is greater probabilty in having a positive return from a tracker than there is in an individual holding where the amount invested is under £1,000 (IMO).

So as investing is not a race it is a marathon, understand the reason why you are investing. For me it was for a comfortable retirement (and I am now just a few years away from that). Next listen to the long term advice - that the longer the period of investment the greater the risk that can be taken. Now, this is not an excuse for recklessness, but the general feeling is that higher risk results in higher rewards or higher losses.

And once I retire, then how long will I live after that? 5 years, 10... 30. And of course, I don't know. Where life expectancy IS known than appropriate risk can be made. If diagnosed with a terminal illness aged say 50 with a life expectancy of 5 years, then a low risk is likely to be better. If aged say 50 and no underlying illness, fit, active, no health issues and parent alive in their 90's, then there is a better than even chance that you too will live for another 40 + years. A high risk portfolio is just the ticket, surely?

Trackers have (based on the performance of the major indices (DOW, London Stock Exchange etc)) grown at a solid 7% annually. That will double your capital every 14 years. Fees will erode this with frequent trading. FWIW, with the exception of regular buy orders for monthly savings, I place roughly 10 sale order and 12 buy orders each year. Average wealth invested per holding is £!7,000 and have between 65 and 75 holdings in portfolio including cash. My target is simply to beat the index.
So fees can be reduced by looking

Hi MrTibs - the original FTSE 100 also included companies that have either been absorbed into others or have gone bust. Marconi is a good example. Next, I am making a wild guess and that you are a young person (50 years or younger) and find yourself the recipient of a windfall.
I
I'll let you into a secret, investments throwing off dividends and by definition are those that you are considering as the reason for investment are last century companies and very mature. They are unlikely to fail, immediately but they are unlikely to grow your capital and will need to evolve just to stay still. Rather than look to the last, perhaps take a moment to talk to a top notch wealth management company if the amount you are looking to invest is at (or above) that worth investing.

Look, I know this sounds trite and perhaps condescending, but the ordinary herbert is likely to be able to get around 8% per year as a return from their capital each year as an average over a 20 year period. A Wealth Manager should be able to earn 13-14% annually for you and they will charge 2% of capital invested. If you are only interested in dividends, then you should be prepared to write off any capital augmentation in favour of static dividend payments.

If you only target growth, then any dividend income is a bonus. My suggestion therefore is to establish what you actually want to achieve and be honest about the risk you are prepared to take. FWIW, I am aged 63 and I have increased the risk I have with my portfolio from Medium High to HIGH. My portfolio is structured to capital growth. It throws off about 1% as dividend income from 75 holdings but has doubled every 5 year 9 months under professional management but had, prior to that doubled every 7.3 years under my management.

The doubled capital is more than enough for the difference from the loss of dividends. When I began investing, I drew my stock picks from the larger companies, this extended to the wild times of the 1980's to 2000's and was restructured in the 2010's. Of course, it is not perfect and believe me I have picked many lemons. Growth this year was targetted to better 15.3% and I am on target for 16.1%. It has not been easy, but capital growth is not usually expected from the constituent companies in the FTSE - from the FTSE-350, certainly. Good luck.

Sorry to witter on - all the best.

Topdog21, it is a sort of tracker but actually is the index. The defining quality that it is,not just an Investment Trust but also the index . It is a closed scheme in that it has a finite number of shares. It has just 65 holdings that mirror in weighting the principle contributors to the S&P index but also invested in those same holdings.

In short it provides direct exposure to US investments, direct investment in the leading US companies and single US exposure in a single US Sector - in this case US Financials.

I hope this helps, but usual caveats apply concerning research and decisions - I can provide many examples where I have made a total hash of my investing decisions going back decades - if you like what you see, then you decide whether to buy - I cannot make that decision for you. If you decide to buy, then you must decide on the extent of your investment. I do not like to have more than 3% wealth exposed to a single holding but my portfolio has been constructed over many decades and is very different from when I started. It has an appreciation of risk rather than whim and reward rather than hope.

It may interest you to note that I am not averse to buying shares in the heavyweights. I prefer doing so through an Investment Trust approach these days rather than with the individual shares. I've taken a very decent profit and disposed of my holdings in Baillie Gifford Japanese Smaller Companies this week and have invested in UIFS.

Time will of course determine the wisdom or folly of my decision. I have reduced my holding in Shell again and will continue to sell into strength.

I mentioned that it is important to draw on the information that analysts provide in the public domain. This was published today - I commend it to you:
https://www.morganstanley.com/ideas/royal-dutch-shell-ceo-future-of-energy-exceptional-leaders-exceptional-ideas-video?subscribed=true&dis=em_2021414_wm_5ideasarticle&et_mid=235682&et_mkid=

FWIW, CSDI, I am not averse to big caps that pay dividends. I have bunged some money into RIO today. From a technical perspective, the SP has moved through its 50 day moving average; both that moving average and the 200 day one are northbound, industry is beginnning to return to work and miners are back in fashion as mined resources are the foundation stone for manufacturing.

I cannot pretend that this year has been easy to get things right all the time, but I am pretty convinced that the catalyst has been from successful and organised vaccination program that nations are adopting, albeit at differing rates. I forecasted a 16% uplift for my portfolio this year and am a little ahead of target (despite being behind between mid Feb and March). If growth continues as per forecast, I might (again) exceed 20% growth. Dividends that are generated although nice are not a core element in my investment strategy, but I hink I have made that pretty clear.

All the best

Information is critical for decisions to be made - whether it is driving a car on public roads or managing money - I hope we can agree on this, CSDI. Where we differ, is in our attitude to risk and our strategy to use risk to advantage. The most influential markets for investors are US followed by London, Tokyo, Shanghai and Frankfurt.

With that in mind, the professional press that follow these markets very closely include Reuters, Bloomberg but it is the amateur press that tend to flesh things out - they have a far broader readership and potentially more influential - CNBC is one and Al-Jazeera another.

There are 2 stories on CNBC that caught my eye a few moments ago - the first that more money has flowed into markets in the last 5 months than in the last 12 years and second that the economy (in US) is on the cusp of a boom and set to last.

My best years have been from 2016 when my portfolio rose 29.30% and was followed by a rise in 2017 of 29.66%, 2018, 24.84%, 2019 was 30.26% and 13.39% for 2020. Dividends accounted for 2.76% of the growth in 2016 and had fallen to 1.51% in 2020.

I do accept that 2016 onwards have been exceptional years, but possibly the year that was much more important was 2018 as I sold off most of my holding in Shell built up over 40 years to have just 2,000 shares (now down to fewer than 500). So, with CNBC suggesting record growth and the flow of money according to Bank of America at record levels, dividends although important are likely to be outstripped by share price growth. Growth is growth, but persuing a policy that has worked in the past does not necessarily mean that it will continue to work in the future.

Oh, and I have started to buy shares in Shell again, not for the dividend, but as ballast and thus defensive. The shares are in very gradual rising range 1275 to 1550.

As Spring has arrived, the first quarter becomes history. Markets are forward looking and, dare I suggest it, there is more than a whiff of optimism in the air. I know you have a penchant to chase dividends, but I believe this to be folly and based on a failure to adapt and evolve.

Dividends from FTSE companies in 2018 were 4.68%. In 2019 this had risen to over 5% and in 2020 the bubble burst. The current yield is 3.07%. Therefore to chase your "goal" for yield the sacrifice will be capital growth, perhaps even, capital loss.

The rule of thumb is that the indices for markets, have, for many decades, risen at an average of 7% annually. Indices do not generate dividends so I contend that your target of 5% dividend will see average growth of 2% annually, precisely the result you seem to be achieving.

Spin things around and seek growth that is BETTER than the indices will target 7% growth in capital BUT has the advantage that some holdings will generate dividends - and that is the bonus. If you ONLY invest in FTSE companies and do as well as the index, then you will achieve 7% average capital growth PLUS 3.05% dividend income.

FWIW, I am now back on track (actually, slightly ahead) to reach my target to achieve 18% growth on my portfolio this year.

It is, though, reasonably substantial, invested in equities quoted on markets all over the world and with small exposure to gilts. My reading of the direction that major institutions are taking is that the UK has potential for rapid recovery after turgid performance since 2016 (Brexit) and that although I remain very bullish to emerging market of South America, there is little prospect of growth until Covid 19 is under control.

Again, I hope this is beneficial - it seems I am critical of your decisions - it is not deliberate. It would be idiotic of you to cash everything in and persue a different course from that which you have chosen on the ramblings of this idiot, but I do hope that as you realise investments you will consider a variant course, which, if it is successful, might invigorate lacklustre returns of the past.

It is pretty difficult to answer that question, but I will have a stab at it so that you can make decisions for yourself. The "rules" that I set for myself have changed in the last 40+ years. Allow me to share my mistakes. In the early years, I was content with a gain of 10%, sold everything and stuck the proceeds onto the next stock pick. Once this has been done a few times, there was often enough to be able to pick two holdings. (In those days, information was found in newspapers!).

Eventually I found that I was too concerned with chasing a profit that the losers were not disposed of (that took me 25 years on an ALL or NOTHING sort of investment pick) to discover. Then I began to run my profits, taking out a little here and there, but not with any structure or any reason other than I had found the "latest and next best thing". That wasn't very satisfactory either, more because there was no structure to y portfolio, just an awful lot of short term mistakes, some of which I fell in love with and kept averaging down (IGE) before eventually when things began to turn, I sold the lot to probably break even.

My portfolio is split 3 ways - ISA for self, ISA for wife and a joint dealing account. Each portfolio is considered on its own merit but all three considered as a whole. Therefore overlaps in holdings are avoided but the goals for each are the same.
This means that although each is pretty chunky in terms of capital invested, there is latitude when considering the aggregated value. Thus there are about 70 holdings and, at the point of purchase, no single holding should exceed 3% aggregated portfolio but might represent a larger percentage in the individual "wrapper". Sometimes a sector becomes a little frothy and that is the point where I would top slice - most recently (January) it was ATT that had served me very well and I disposed of MOST, but not all of my holding. It remains prominent in my portfolio. The proceeds permitted the purchase of two other holdings at MY normal investment amount (£10,000) left me with 500 shares in ATT and a little cash for investment at a later date.

So, for me ATT had been a 4 bagger. There is no reason to doubt that ATT will not continue to reward shareholders for many years to come, but at the time that the decision to sell was executed, I saw better opportunity.

Shell had been in my main portfolio from 1979 continuously until 2018 when I sold the bulk of them. I now have under 500 shares in Shell and only because I forgot that there were some in certificate form. Oil was a cornerstone in building my portfolio but now that it is being prepared for retirement it needs to last the next 40 years. Therefore I have increased my portfolio appetite to risk and invest in sectors such as renewables which are going to take over.

Don't forget that the stone age did not end for the want of stone.

What goal do you have? Once it is achieved, what next?

Thank you for that hahahehehoho. I think I can now add you to those that I have filtered. What a total tool you are. Your contribution is an EXCELLENT example of "noise" - the loudest of which is from an empty vessel.

So, Kinmitali22, you have a brilliant insight of the "bloke in the pub"/"You'll thank me for this"/"mate of mine mentioned"/"probably be shot for publishing this" sort of comment. A joke name "hahahehehoho" has provided a direct "TIP" to prop the price up.... classic pump and dump. More likely scenario is that the company will go bust (relatively speaking).

Use information that is verifiable from multiple and CREDIBLE sources for broad direction - we know that energy is transitioning from BIG OIL to renewables but we don't know whether solar, wind, hydrogen, wave or any other will be the dominant. We do know that batteries are important.... hence the rise of Tesla, Varta, VW etc. We know that Covid 19 is the CURRENT problem and that vaccine in various guises is being rolled out. What we don't know is how variants or any virus whether known or unknown will determine our health and response. Testing therefore is priority and a share in which I do have pecuniary interest TTG is involved. And while one boat might have left the dock some time ago, it does not mean that other (particularly in cutting edge technology) boats are under construction.

Be honest with yourself and understand that YOU have the advantage of time and far greater research than I had in the 1970's through to the 21st Century. Think about how the WORLD is changing, what is needed for the betterment of lives in general and what will maintain political stability and peace to be in that future world. Religious nutters (all faiths, IMO) have zealots and some resort to very violent measures in their attempt to stamp the theological from a perverted perspective. The investor will benefit from enhanced security, whether electronic, guns or boots on the street, from media as they give oxygen to sensation consequential from nonsense. And so it goes on. Use logic to determine the direction that will benefit your portfolio and how your choice will be both enhanced and disrupted. Time spent in thought to determine individual elements is not wasted because investing is not a race or a game. The worst players are those who have worked within the rules, have made lots of immaterial mistakes and are frightened to make mistakes as they have poor understanding of risk.

Your goal is not to eliminate risk but to use risk to your advantage. It starts at the point when you are frightened when measuring your capital that is exposed to equities and the size of bargain needed to be executed. For me, the point came when I needed to rationalise the holdings 10 fold. I was very happy dealing in £1,000 here and, quite inadvertently became my own tracker. Bit of focus needed with £10k transactions. Bit more with £50k ones. Same see-saw, different effect on c

Kinmitali22, I would be very interested to hear how you are getting on. Don't forget that while there are many thousands of excellent quoted equities from which you can choose buying is the easy bit. The difficulty is always with a selling strategy as, unless you sell you never actually make any money (unless you choose to receive dividends, as cash, of course).

FWIW, this has been an extremely frustrating year so far. My holdings in USA have gone from strength to strength, but those quoted on the Hang Seng or investing in the Asian markets have been flat. UK, has been extremely mixed and very staccato with whopping rises or falls followed by a gradual reversal of whatever occurred.

Back in the 1970's there was on LBC a great presenter, Bob Beckman who gave a 2 minute precis of the major markets. His favourite phrase in those turbulent times mirrored today was "markets are behaving like an elevator..... with a lunatic at the controls". I started building my portfolio at that time with a modest £500 to which I added £15 monthly. It was all I could afford on my salary of £3,600. I have increased my monthly savings each month since then on an annual basis. This is augmented with dividends thrown off from time to time.

MRTV, liquidity and an orderly market exists as Market Makers (in the old days these were "jobbers") set out their stalls to both buy and to sell shares. The price that MM's sell at is the "offer" price and the price that they will buy shares is the "bid". There is a small difference in the 2 prices known as the "spread". In the old days this was the "jobbers turn".

Market makers therefore exist ONLY to make a market in the shares and they are ONLY obliged to deal at the Normal Market Size (the average qty of shares per bargain over 3 months). If the bargain exceeds the NMS by 3x or greater, the market can delay the publication of the bargain for 1 hour so as to not cause alarm.

If there is considerable pressure from buyers, the price will generally rise to encourage sellers to take their profits. The converse happens if there are lots of sellers. MM's are permitted to be long or short without disclosing their position to the market.

Generally where there is plenty of competition for business (ie lots of MM's pitching for turnover) then the spread will be tighter than a market where it is lightly traded.

At the beginning and end of each day there is an auction to establish the opening (or closing) price and the first half hour or so can be very volatile. I have usually found it unwise to deal in the first hour or so of the market being open. Think of it as a load of barrow boys setting out their respective stalls - sometimes it is raining and not many people about and other times too hot so there is the whiff of decay. First thing in the morning is the traditional time to release news and it might take a couple of hours for the implication to be understood by those that can and do move the market.

I hope that this provides a little flesh on the way that the market operates. The private punter will not usually drive share prices except by concerted effort - Gamestop is an example - private investors can benefit from being on the coat tails of the huge merchant banks, pension and global fund managers. If Goldman Sachs for instance issue a buy note for something, there is a better than even chance that they will have already told their clients a few days ago and some of the heavy lifting will have been done. Momentum will do the rest.

Remember, it is only when you sell that you make any profit (or loss). Take losses early, run profits and it is NEVER wrong to bank a profit. Leave something for the next guy.
Good fortune I hope entails for you.

Yo-homes makes very viable observation first in sheltering investment in ISA wrapper for gains (and dividends) and that some fun needs to be had while investing. Challenge yourself just to beat the market each year but go where the market is growing.

If growth is in Japan or Chile or mining or renewables or stem cell research or anything else, and you haven’t the least knowledge about either the geography, the subject or sectors, then that is where Investment Trusts are used. They give exposure to the most beneficial or likely holdings that will achieve gains.

Remember also that you do not need to knit muesli, support Greenpeace, play a tambourine or vote Corbyn/Biden/Macron, listen to Attenborough or even want to have anything to do with renewables to make money from the sector. The same applies to bombs, fags, chemicals, nuclear processing etc.

Getting rich slowly has worked for me. I’d have preferred it to be fast, but in hindsight slow was good. With flooded homes, the downsideis insurers but the upside means new carpets. Good fortune to all.

This time last year, markets were braced for a sharp drop with the DOW shedding 1,100 points. I don't know about you, but between 23 Feb and 23 March the "paper loss" that my portfolio showed was a fall of 35% (equivalent to 17 years salary) from the capital balance on 1 January. 2020 was extraordinary in seeing how disease affects markets and in just 20 days can wipe off all the accumulated "froth" that share prices value to show the raw worth in the chosen equity.

2021 has been particularly difficult but for different reasons - some of the economic recovery has already been priced in but different pressure are in tussle - bonds vs. equities

Long term each has a place but for different types of investor.

From 1979 when I began work, my goal was to create capital from income, thus a cautious approach was taken. I invested in what were considered to be "safe" stocks. Things like Shell and Prudential. Then I was sucked into the age of floatations and discovered the benefit of being a "stag". BT, Jaguar, British Gas etc. I began also to be a little more adventurous with Racal, some unit trusts and, having after 6 years of setting aside £15 per month, plus £500 from Christmas and birthdays found that I had accumulated wealth of £7,000.

It was not a case of putting it all on red, but buying a property and starting a small business. The business failed but the property had some house price inflation and after I had paid all my creditors I had enough to invest again (£2,000) and work this time for someone else. I did, had 3 jobs, one full and 2 part time - for a year by which time, I had enough capital (£10,000) to start a new business. That lasted 3 years but again failed, only this time I did not have the prudence to buy a house. Failure was not my fault - it was through the embezzlement by a rogue partner who was later jailed for 18 months.

I accept failure as I do success, temporary, but now, approaching my late 20's I was eager to fulfil my ambition, marry, have children and enjoy a lifestyle of privilege. 31 years of marriage later, my children are starting their careers with assured earning power, I have had a further 3 failed businesses and 2 successful ones. My regime of saving has continued, but the amounts from salary are exceeded from dividends by a large margin until that bubble popped in 2019.

So, rather than enjoy 3.8% as dividend income, divi's account for a little over 1.1%. Should I be concerned? Well, yes and no. Yes, if dividends were the sole purpose of investment and no because the valuation of a portfolio on arbitrary dates is measured on capital value not the level of income generated, Were the 2nd measure be taken, then I am worth much less today than I was 6 years ago despite a doubling of capital during that time.

So, CSDI, I suppose what I have been trying to articulate is that seeking income might be a poor decision if income is not needed. Capital growth & distribution of it mi

If you are considering something in the Fintech sector, there is a small trust called Augmentum that you might wish to consider. I should, at this point disclose that I do hold shares in it. The EPIC is AUGM and their portfolio can be discovered from this link : https://augmentum.vc/our-portfolio

Once markets settle down after the US (IMO, misplaced) fears for inflation, eases then I am sure that there will be a hefty rise in store for equities.

Your holding in SUPR appears to be an excellent choice. I sold all my investments in commercial property quoted holdings in 2019 and is a sector I no longer follow. As its niche model has not been impacted by retail closures and with an extension to business rates holiday the SP has been in a steadily rising trend. There is no reason that this will change so momentum should continue growth.

FWIW, I sold another tranche of shares in Shell today and have placed the proceeds in a hydrogen based energy company. Not a wise choice for widows and orphans.

Do not be dispirited. Volatility is all part and parcel of the game. Once you understand why you have bought investment "A" rather than investment "B", then back your decision with your ratio of allocation. Now search for investment "C". Once investment "A" no longer has allure, dispose of it. "B" might be more attractive, as might "C" or any other asset.

There was a great line from "Kellys Heroes" from the charactor portrayed by Donald Sutherland when describing the benefit of a modified tank with additional reverse gears. Along the sentiment....."want to get out of trouble faster than got into it".

The principle failing I have made, can be better compared with Cleopatra's nose - start too early and ended too late. In other words too keen in to invest and held for too long. Enough, I think on the past. Perhaps, rather than describe your current portfolio, maybe construct an imaginary portfolio that you might put in place if you found yourself with say, £50,000. Then do the same with £150,000 and again with £500,000, then £900,000 and lastly with £10,000. They will not be the same, but might have common holdings. It will help you to find the sum of money that you are comfortable as your capital at risk.

I suspect I have a greater exposure to risk than you as I was off 6% last week. A typical day will see 0.5% - 1% movement for my portfolio as a whole. But the construction of mine has very different timescales - SIPPs are purely for succession planning, dealing accounts simply so that advantage is taken to transfer cash into ISA accounts. These dealing accounts will run profits and ensure that losers convert to cash. They accept a regular monthly deposit that is invested in trackers. Any cash thrown off is accumulated. Thus far the aggregated dealing accounts keep within the limits of dividend income.

Gifts are also made from this "income" to the advantage of my children in building their capital and additional transfers made to a Discretionary Trust that we setup in 2015 - again as planning for succession, though we have yet to inherit on our own account.