I don’t consider myself to be an active trader. In a normal year, I’ll reinvest some dividends every few months and add some fresh money to my ISA in April or May. That’s usually it.
If I am feeling particularly energetic, I might sell a holding that doesn’t seem to cut the mustard anymore and reinvest the money elsewhere. Then I might need to lie down for a few years to recover!
This year, by comparison, has been a hotbed of activity.
I’ve been reshaping my portfolio recently, trimming some larger positions that had become uncomfortably big and ditching a couple of laggards. In their place, I’ve been swapping in some investments with a more global outlook and others to produce a little more income.
However, when I listed everything I had bought and sold this year, I must admit I was a bit surprised quite how busy I’d been…
Here’s a full list of what I bought and sold during 2018:
As I am now unitising my portfolio to track its performance, I can see I added roughly 10% to my main portfolio and 5% to my pension over the course of the year.
In retrospect, my timing when it came to adding that new money later in the year looks horrible. But I usually invest fairly quickly once I have made an allocation decision, so that’s something I’ll just have to live with. And I have had plenty of practice over the years!
I continue to believe attempting to time the market is a fool’s errand though. All else being equal, I think the earlier you can put money to work the better.
There’s still some tinkering to do in 2019 I suspect, although I expect it will turn out to be a much quieter year in terms of overall activity.
I still have an oversized holding in Caledonia Investments that I’d like to trim and reinvest elsewhere. In addition, there’s a US stock that I may switch into investment trusts at some stage.
And I will probably add a little money to Baronsmead Venture Trust when its latest fundraising offer opens in the next week or so.
I’ll continue to reinvest dividends when I can, too.
Overall, I’d say I feel a little happier with how my portfolio looks now compared to the start of 2018.
For a while, I have tracked my main portfolio and pension separately. The latter has traditionally been the less active of the two when it came to investment decisions, so I wanted to see how they compared.
I've teamed up with Jonathan Davis, the editor of The Investment Trusts Handbook, at Money Makers where I am now writing regular articles on trusts and funds.
For more details of what you get by joining as a member please click here.
I’ve recreated some performance statistics going back as far as 2010, but they have been more crudely calculated than the unitised method I now use.
Year | Portfolio | Pension | FT A/S | MSCI ACWI |
---|---|---|---|---|
2010 | 49.1% | 14.5% | 13.4% | +16.2% |
2011 | -20.7% | -1.0% | -3.5% | -6.7% |
2012 | 11.6% | 12.5% | 12.3% | 11.0% |
2013 | -4.2% | 23.8% | 20.8% | 20.5% |
2014 | 11.8% | 6.4% | 1.2% | 10.6% |
2015 | 4.3% | 6.2% | 1.0% | 3.3% |
2016 | 26.3% | 8.9% | 16.8% | 28.7% |
2017 | 14.3% | 13.6% | 13.1% | 13.2% |
2018 | -2.1% | 6.3% | -9.5% | -4.7% |
My portfolio was very different in 2010. Back then I was mostly a share investor. I still held a few investment trusts but not as many as I did in the 1990s.
It was my performances in 2011 and 2013, plus the arrival of small children, that led me to decide to focus on investment trusts once again.
As well as being too time-consuming, I felt that I was taking too much risk with my investments. A younger me wouldn’t have minded that so much, but the older me has become much more interested in keeping what I’ve already got!
The shifting nature of my portfolio over the years makes judging its success fairly subjective when it comes to choosing exactly what to compare it against.
I’ve decided that I need to compare my performance to a global index as well as a UK one, given the current make-up of my investments.
I’d say 2014 was probably the first year my portfolio became ‘mostly global’ and started to resemble the way it looks today. Taking that as a starting point, I am up 65% for my main portfolio which compares to 22% for the UK market and 60% for world markets (as represented by the Vanguard All-World ETF).
My pension is up 49% since 2014, but it was mostly UK-focused up until early 2016, half-global for a couple of years and then wholly global from early 2018.
If I add in 2013, which was a stinker for me, then my main portfolio is still ahead of the UK market — 58% vs 48% — but it substantially trails the global market’s 94%. My pension returned 84% over the last six years.
Looking ahead, if I can beat global stock market returns by a total of, say, 10% over rolling five-year periods then I would be more than happy. That would represent an annual outperformance of 2%.
A number of my holdings helped my overall return this year – Fundsmith and Lindsell Train have both done well, as has Caledonia. The likes of Baronsmead and the infrastructure funds have also helped to steady the ship.
UK small-caps have been the main weak spot, but I’m still building this aspect of my portfolio up. I’m viewing it as an opportunity rather than a weakness that needs to be addressed.
I’m not one for making stock market forecasts, given they are utterly futile. That said, after the falls of recent months, valuations do seem to be fairly attractive.
The Bloomberg website has estimates for each main market index and currently shows the following:
Of course, events might get in the way, and the profits behind these estimates might not come to pass.
The UK’s low rating does look pretty tempting – I’ve added City of London Investment Trust to my list of top-up candidates for dividend reinvestments.
Certainly, on a multi-year view, there seems to be a decent chance of equities making respectable progress from here.
Thank you to everyone who has read this blog since I began some six months ago. It’s been a very useful exercise to write down my thoughts and see how they look in the cold light of day. I just wish I had started doing it sooner.
May 2019 be prosperous for you in every single way!
Here's my portfolio review for the first quarter of 2024. I was up 4.2% while…
The AIC has updated its annual list of ISA Millionaires, the number of trusts that…
Here's my portfolio review for 2023. I ended the year up 9%, global markets rose…
Today sees the publication of the seventh edition of The Investment Trusts Handbook, the essential…
Here's my portfolio review for the third quarter of 2023. I am up 2% year-to-date…
Here's my portfolio review for the first half of 2023. I was up 4% while…
This website uses cookies.
Read More