A simple approach to successful personal investing with the goal of generating a growing income from a portfolio including cash savings, shares, corporate bonds and government-backed investments, using online savings and brokerage accounts and shielding your investments from tax wherever possible.
Making money since 2011
Sometimes I do try to be a bit analytical about markets. For example, at the end of 2011, given the Government's desire to stimulate the economy and the low rate of construction of new houses, I thought that there might be a bit of a boom in this sector, particularly in the social housing side.
To continue my previous 'investment-as-gardening' theme; I have been doing some more pruning of the portfolio. In fact, the start of this autumn has been far busier than I was expecting both in the garden and here in cyberspace. Normally, watching the DIY Income Investor portfolio is a bit like watching grass grow - boring. It usually ticks over quietly with some of the constituents blooming while others fade away (hopefully to recover later).
This September has been quite remarkable, with the portfolio growing by 4% in the first three weeks - leading to some digging up of old favourites and a search for replacements.
I have been thinking about the similarities between DIY Income Investing and gardening. Not that I am a particularly good gardener - in fact my gardening also reflects my investing style: both are based on minimising effort!
Both investing and gardening require a lot of patience, some research and require occasional decisions - a visit to the garden centre, cutting the lawn, hacking back the brambles.
I have also taken the secateurs to the portfolio...
I am constantly looking for high yields from my new investments but always with the proviso that I don't want to throw my money away on something that is likely to go belly-up in a few months.
Risk and reward are inseparable - however, I try to remember to find out what it is about the company the market does not like, so I can make my own assessment. So I take my time - a bit like a mouse sniffing around a mousetrap...
As private investors we all rely on a couple of favourite financial websites to keep us updated on prices and developments in the markets. And, of course, we like to get this information for-free.
In particular, I previously used Yahoo Finance to 'scrape' share prices, to keep my portfolio spreadsheet up-to-date, at the click of a laptop button.
That has worked fine for a few years but, all of a sudden, in September (2013), it all seemed to go pear-shaped. Perhaps another indication that all is not peachy at Yahoo - hot on the heels of the bungled Yahoo Mail update.
Investing in the stock market is a bit like 'Who Wants to be a Millionaire: the same excitement of possibly getting rich very quickly and a range of tricky questions to answer (usually 'should I buy this?' or 'should I sell that?).
OK, there's no Chris Tarrent to cajole us along the way, to question our decisions or to write the cheques, but it comes down to the same dilemma: when the question gets too hard - and you've phoned a friend, gone 50/50 and asked the audience - do you walk away and keep the money or risk a guess?
The decline of PIBS continues. Many of you who hold Nationwide Building Society PIBS (Permanent Interest-Bearing Shares) will have been informed of the buyback tender recently launched. The buyback basically means: forget the prospectus and what was promised then (in terms of maturity/call date and rate of return) - just take the money and go away!
Unfortunately, this is not the first time that Nationwide has done this - and where the nation's largest building society goes, others will no doubt follow.