Tuesday, 20 August 2013

Batten Down the Hatches: Portfolio ETF Top-Ups


Not my boat...but I know what it feels like!
Source
There are storm clouds on the horizon. The global economic situation is now beginning to look more and more difficult and I am gradually becoming more pessimistic.

I am hoping that the way I have restructured the DIY Income Investor portfolio will help me to weather the threatening coming storm.

My current strategy is to try to safeguard the great profits made from UK fixed-income securities by re-investing the sale proceeds in a more internationally-oriented range of investments, particularly income-generating ETFs.

The last of the current round of purchases was completed with top-ups of a further two of my Magnificent Seven international ETFs:

ETFs - both international and UK-based - now account for nearly one-quarter of the portfolio. Individual dividend shares still account for half the portfolio, and I will be taking profits when the opportunities arise (using my 5-years'-income signal, plus current yield, as a guide). Individual fixed-income securities now make up less than a quarter of the portfolio - down from making up half the portfolio a year or so ago.

Being almost fully invested also means that my portfolio income has reached a new high, with the overall current yield at 5.9%.

Hopefully the DIY Income Investor portfolio as now structured will be reasonably sea-worthy for the the coming headwinds.


[Purchase prices: IAPD £20.827;  EMDD £57.49]



I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

5 comments:

  1. What portents do you see of a looming tempest? I'm a congenital worrier so have been beset by gloom ever since I started investing a decade or so ago. But, so far, things have come good in the end. Fortunately, my natural pessimism is offset by a high level of inertia (aka laziness) so I tend to stay pretty fully invested.

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    Replies
    1. Good question! For me the most worrying sign is the sideways movement of the markets since the big run-up in July: that usually signals a further 'correction'. Add to that the coming unravelling of government stimulation packages which will throw bond yields and valuations into disarray. Interesting times...

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  2. Sis,

    I'm with you on this. I ditched a number of fixed interest investments earlier n the month. Sold all my pibs and all my insurance FIs. I smell too much government interference coming.

    ReplyDelete
  3. Sisyphus,
    Different websites seem to give difference performance figures.
    For EMDD
    Fund Performance
    SPDR website:
    1 Month -3.18%, 3 Month -6.34%, YTD -9.07%, 1 Year -3.09%
    Bloomberg website:
    1 Month +4.8%, 3 Month +1.45%, YTD -5.14%, 1 Year -1.54%
    Any comment about this?

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    Replies
    1. That's quite a difference! I guess it is explained by the different currencies used: Euros and Dollars. And I'm investing in Sterling...

      For me, the yield is key - take your pick: 4.88% and 5.12%

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