Thursday, 30 October 2014

Topping Up (Portfolio Buy)

car fuel guage
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Despite keeping away from the depressing market news over the last weeks, I did have some cash sitting doing nothing in the DIY Income Investor portfolio - a situation which always feels a little incomplete to me.

My first choice for investment is to top up one my existing investments - on the basis that 30-or-so different securities constitutes more than enough diversification. And I'm not even sure that I know what is going on with all of them.

So, top-up it is - the key question is: what?

Tuesday, 28 October 2014

Flying on Autopilot

Just who is flying the plane?
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Since the start of September 2014 the DIY Income Investor portfolio has been hammered by the world-wide downturn in financial markets. The corner turned in mid-October, with the portfolio's market value recovering to values seen at the middle of the year: it is currently showing a 7% rise in total value for 2014, a far less stellar performance than in recent years.

Hopefully the markets will recover further over the coming weeks. But I have tried not to get too emotional about it all - mainly by leaving the portfolio on autopilot and removing our greatest obstacle to logical decisions: our emotional reaction.

Tuesday, 7 October 2014

Market Stabilisation? (Portfolio Sale)

Image Stabilisation
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After a fairly horrible September for the DIY Income Investor portfolio (producing a 3.2% decline in value), October seems to be beginning as a month of stabilisation, which is a relief.
 
As usual, if the markets turn nasty, my usual reaction is to 'sit tight', leave the portfolio alone and spend more time on other things. Consequently there is little to report by way of action.

However, I have decided to sell something: can you guess what?

Friday, 19 September 2014

Safe as Houses? (Portfolio Buy)

Safe as houses, buy housing bonds - poster
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A perennial problem for a DIY Income Investor is where to reinvest cash - be it straight income or the proceeds of a sale.

The search for a good home for your investment cash can take a while - and can cover the globe (if you're into the more exotic Exchange Traded Funds). But sometimes ideas for reinvestment come from closer to home: from the portfolio itself.

Wednesday, 17 September 2014

The Art of Waiting, Volcanoes and Scotland

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September has been a disappointing month so far, with a modestly downward trend in the DIY Income Investor portfolio. Consequently, there is little to do, other than to wait for something to happen.

While sitting and waiting, it is always tempting to speculate about what drives the markets but I suspect this is akin to trying to forecast when an Icelandic volcano is likely to erupt.

Thursday, 11 September 2014

Whim versus Reason? (Portfolio Sale)

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When is it right to follow a 'whim' - a 'spur of the moment' decision - and when should you exercise self-restraint?

I don't think there is an easy answer as our minds are quite mysterious in operation. Subconsciously we make decisions based on a whole range of built-in biases that pop into our conscious minds seemingly fully formed. On the other hand, the subterranean depths of our brains is constantly churning away at problems and sometimes a useful solution pops out.

So it is a dilemma: the decision that pops into your mind might be a poorly-thought-out psychological knee-jerk reaction or, then again, it may be a spark of a good idea.

Wednesday, 3 September 2014

Speculator or Investor? (Portfolio Buy)

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It all depends how you look at it...
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If you call yourself an 'investor', this implies that you have a long-term perspective. By contrast, short-term dabbling in the stock market is usually labelled 'speculation'.

For whatever reason, the term 'speculation' usually comes with fairly negative connotations - and conjures up (at least for me) images of wide boys in suits with red braces. However, the objective is - one assumes - the same: to increase your overall net worth over time. It's just that the time-frame differs.

But, although I like to think of myself as an 'investor' - I have to face up to the fact that my investment style does incorporate an element of 'speculation': the bulk of the DIY Income Investor portfolio was bought in 2013 and 2014 - a speculator's time-frame.

Wednesday, 20 August 2014

Nothing Ventured...(Portfolio Buy)

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Venture Capital Trusts (VCTs) are fairly exotic investment vehicles that offer tax incentives to invest in start-ups and unlisted companies, with the proviso that your money stays put for at least five years. However, VCTs have not interested me in the past, as - thanks to ISAs, SIPPs and tax allowances - I don't pay any tax on my investments and savings.

But what I didn't realise until recently is that you can also buy and sell shares in VCT companies - and some of these have really attractive yields.

Tuesday, 19 August 2014

Develop Your Spidey-Sense

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My son has captured a huge spider in our bathroom and has adopted it as a pet (naming it Shelob). Although this behaviour is more than a little questionable, it did get me thinking...

Spiders have provided us with inspiration for thousands of years: there is something about their painstaking work building (and rebuilding) a web and their seeming unlimited patience waiting for a victim to get caught up in it. (Robert the Bruce is the most famous example). They lurk, unseen most of the time - that is until they are caught in the open, unexpectedly.

So, can spiders teach us anything about investing?

Friday, 15 August 2014

HALP Yourself with Horizontal Thinking

horizontal vertical 2
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You've no doubt heard of lateral thinking but I do some of my best (?) thinking horizontally, lying on my bed looking at my laptop. Not good for posture, I know - perhaps that's why my back hurts?

But back to horizontal thinking: it's not like sitting at a desk, with so many distractions but rather it is almost Zen-like, as I can look at the trees out of the window. Almost day-dreaming - but allowing the subconscious to surface.

So, what does horizontal thinking tell us about the price of bonds?