Portfolio Sale: BT Group (LSE:BT.A)

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‘Buy and Hold’ is a fundamental part of my DIY Income Investor approach. The problem is that ‘Buy and Hold’ is indicative of psychological biases at work. The received wisdom is to ‘hold your winners and sell your losers’ - but I’m just not built to do that. But it has to be said that ‘Buy and Hold’ can sometimes feel like ‘Buy and Watch Your Money Disappear’.

A good example of 'Buy and Hold' gone bad is my holding in BT: bought in April 2007 and sold today, six years later, for pretty much what I paid for it.

Portfolio Buy: Centaur Media (LSE:CAU)

 

Ah...impulse buys - don't you love them!

In my pre-DIY Income Investor days, before I found my own way through the investment maze, I used to buy on recommendations from investing magazines.  'DYOR' (Do Your Own Research) needs to be burnt into your investing psyche.

Now I DMOR - but I still have the occasional impulse buy, of which this is one: so do not look on this purchase as a recommendation.

Portfolio Buy: Huntsworth (LSE:HNT)

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Investment life for the DIY Income Investor is a hunt for sustainable high yield. By 'sustainable', I mean likely to last for the foreseeable future, without any nasty surprises. So I look for dividend cover, debt levels, cash flow, p/e and general all-round corporate health. Plus this year I am trying to diversify away from the UK and over-reliance on Sterling.

For a (very) part-time investor, this is quite time-consuming - but the time to do your homework is at the beginning. Once you have made your purchase, it is too late.

So, let's see what today's hunt's worth. (Couldn't resist it!)

The Wealth Inflexion Point

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Our attitude to money is shaped by many factors, the most significant being perhaps our upbringing - the role models provided by our parents. We certainly try to teach our kids 'the value of money'.
But there also seems to be point in our lives when our relationship with money - our 'money paradigm', if you like - changes significantly.  We see money in a new way - a bit like looking through a telescope the 'wrong' way, and then the 'proper' way.

I like to think of this point as a Wealth Inflexion Point - a point beyond which the old 'paradigm' of your relationship with money changes. From that point wealth creation can truly begin. And probably not before.

Portfolio Sale: Standard Chartered 8.103% Step-up Perpetual Preferred Security (LSE:ESC6)

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What's this? An income investor selling something that yields over 7%. Has he lost the plot?

Well, maybe - but there is a thread of logic to this. And maybe a note of caution about the potential complexity of fixed-income investment.

Portfolio Buy: Braemar Shipping Service (LSE:BMS)

Changing course?
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2013 is turning out to be an exceptionally busy time for the DIY Income Investor portfolio - which is quite out of character for this investing style. But there is spare cash sitting in the various investment accounts, which should be working hard.

This new purchase may represent a move in a new direction in the portfolio strategy - towards Small Caps (i.e. companies with relatively small share capitalisations) traded on the London Stock Exchange. This part of the market has some interesting high-yield dividend companies that I will be looking at over the coming months.

Kairos and a Penny Found

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Opportunity knocks! But sometimes only quietly.

Beliefs shape us and as an active investor you must believe that your investment choices are better than just buying a market index ETF or (horror!) a fund managed by a man in a suit who claims to foretell the future.

My own (unprovable) belief is that there are opportunities every day for an investor willing to put some original thought into the effort. The key, I believe, is just to be looking.

Maybe that's why I regularly find money on the street.

Portfolio Sale: Persimmon (LSE:PSN)

Persimmon - the horse
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Like the racehorse it is named after, house-builder Persimmon saw the finish line and raced for it.

I put my money on it - and I have now been to the bookie's window to receive my winnings.

Although this is a dividend share, I was looking this time for a quick profit (to cover some previous losses) - unlike my other purchases, which I normally buy and hold.

So, what is different?

Portfolio Buy: African Barrick Gold (LSE:ABG)

Gold Finger?
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Gold is in the news currently, following a sharp drop in the gold price that surprised the market.

As a DIY Income Investor, holding gold does not appeal as I expect my investments to 'pay for their keep' by returning an income. Gold just sits there, looking shiny but incurring holding costs - but there's no doubt that it has been a stand-out speculation investment over the past few years.

So, I have been on the look-out for a gold mining share that pays a good dividend; the problem is - most don't. Until now...

Portfolio Buy: Homeserve (LSE:HSV)

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Having just dealt with a leaking shower, I know first-hand the stress and disruption that these domestic emergencies produce. If I didn't know a friendly plumber, I would be having to find one in the Yellow Pages - and how much would that cost?

One attractive option for many people - although not me, it has to be said - is to take out a home maintenance policy.

And perhaps one of the companies that offers this kind of service might be a useful additional to the DIY Income Investor portfolio.