Portfolio gain of 20% in 9 months
I initiated a small-scale portfolio in early March - just 8 stocks, £2k each.
As my confidence in the portfolio has grown (performance has been decent whilst perceived risk has been low), I’ve gradually increased the amount invested in each stock whilst also increasing the breadth of stocks. The portfolio is now at £110k across 25 stocks, and is currently up 20%.
Investing rules
StockRank > 80, with a bias towards > 90 and especially > 98
Growth, Quality & Momentum Ranks all > 30, preferably all > 60
Market cap > £30m
PE < 20x
I aim for a balance across sectors but have nonetheless been strongly weighted towards consumer cyclicals, industrials and financials. The portfolio is also strongly weighted towards dividend-payers, and away from companies with high gearing vs profits. The portfolio is dominated by UK companies, with a few European companies thrown in.
Performance
20% gain since inception in early March, including dividends, charges and spreads.
Compares to:
FTSE 100: minus 6%
FTSE 250: +4%
FTSE SmallCap: +4%
Woodford Fund: +7%
(The index benchmarks include an assumed 3.5% dividend yield, I realise this isn’t accurate but it’s close enough for my purposes)
I ignore performance vs the FTSE100 at present as it’s dominated by the rout in oil / resources. I’m more focused on outperforming 2 potential alternative investments, (1) a FTSE250 tracker, and (2) Chris Woodford’s bestselling fund.
Performance breakdown
My investment strategy is buy and hold. That’s what I keep telling myself anyway, but I never fail to sell far too early. I don’t hold any shares that have increased >30%, they’ve been sold and the proceeds recycled.
Top 5 shares sold far too early:
Redde - gain if held 89%
JD Sports - gain if held 69%
Finsbury Food - gain if held 60%
Empresaria - gain if held 59%
Rank - gain if held 50%
The largest gain I realised from any of the above was 24% on Redde - which I think demonstrates (a) how poorly I’m executing buy and hold, and (b) the potential for further improving performance.
Rather than achieving growth through high-performing shares, I’ve banked smaller gains and recycled into new investments - around two-thirds of gains to date are from shares that have been sold. So far I’ve avoided too many losers - the worst to date has been Creston (down 18%), though if I still held Game Digital then this would…
