Regular readers will recall that I have been 40% + in cash since shortly before the Brexit vote and subsequently stated that I would remain so until after the US election – this is very unusual for me because I am usually fully invested most of the time. As chance would have it, I was in the US for election week and boy, what a divided country that is at the moment but that’s a story for another day. As for the markets, we are not out of the woods yet and who knows what will happen once Trump takes over the presidency and the UK government trigger Article 50 but in the meantime, I was beginning to feel the pinch of losing out on dividend income by being so heavily weighted towards cash. Therefore, I have this week taken my cash off the sidelines and rebuilt my portfolio, hopefully positioned for the post Brexit and President Trump world we find ourselves entering.
Over the past five months I have been thinking very deeply about the macro situation and have had the luxury of being able to research a large number of shares without the bias of owning them. I have also been able to watch an incoming flow of interim results, trading updates and outlook statements, knowing that I have cash on the sidelines waiting to be invested. As a result, I now own shares in significantly more companies (40) than has ever been the case previously. Although I stated that my plan was to update my “current holdings” on a quarterly basis, the significant restructuring that has occurred this week has prompted me to make an interim update which is now live.
Below, I have provided a summary of my rationale and contextual thinking in relation to the macro environment. So, in no particular order…
Income Portfolio
When I originally set up my current portfolio structure; income, growth and special situations, I was never totally comfortable with my focused income portfolio and consequently, that segment of my portfolio had a much lower weighting than the other two segments. During the past five months I had one of those light bulb moments and realised that my approach to income was completely wrong and that is almost certainly why I had not been comfortable with my strategy. My conclusion is that if the primary reason for buying these shares is income, then being…
