Monday, 28 April 2014

Spring Cleaning: The Trilogy (Portfolio Sales)

After the original Spring Cleaning and the follow-up, Spring Cleaning Part Deux, the DIY Income Investor portfolio started to look more like a more effectively managed operation. Removing the bulk of 'legacy' losses dating from the time of the financial crisis in 2007/08 has refreshed the 'feel' of the portfolio - and by a quirk the overall net profit/loss position was reset to zero.

Although it seemed like a big step at the time - taking long-standing losses on the chin - it did not, in fact, change anything much. Since those 'spring cleaning' sales, the portfolio has hit new all-time highs in terms of both capital value and level of income generated. The net profit/loss in the few days since the sales is currently over 3% - although this clearly has little to do with the sales, which made up a small proportion of the total.

But it was not yet time to put away the yellow rubber gloves...

Tuesday, 22 April 2014

It Was The Best of Times...(Portfolio Sale)

Another one for the chop...
Source was the worst of times. (Dickens - A Tale of Two Cities).

Sometimes we end up doing the right thing for the wrong reason - and sometimes we do the wrong thing for the right reason.

When it works you need to acknowledge that you have been lucky; when it doesn't - just put it down to experience and try to learn from it.

Saturday, 19 April 2014

The Tao of Income Investing (Portfolio Buy)

A different perspective
The concept of 'Tao' (or 'Dao', as it is more commonly represented nowadays) is metaphysical: it is roughly translatable as 'way' or 'path' and hence, the method or doctrine one adopts to achieve something. Tao can be roughly thought of as the flow of the universe, or as some essence or pattern behind the natural world that keeps the universe balanced and ordered.

What I want to explore here is not so much the deeper meaning of life (and how it should be lived) but rather the concept of investing as part of a difficult life journey. There is no easy route - and each of us must find our own approach.

Thursday, 10 April 2014

Spring Cleaning, Part Deux (Portfolio Sale)

If you missed Part One - I am doing some major tidying-up on the DIY Income Investor portfolio by clearing out some investment 'dead wood'.

But the funny thing is: it's only 'major' in my head - the sales don't change anything in the portfolio, they just accept the paper losses incurred by bad decisions in the past.

Wednesday, 9 April 2014

Spring Cleaning (Portfolio Sale)

It's that time of year: the sun is shining, the daffodils are flowering and we feel that, finally, the winter is over. Coming out of the dark, cold (and wet!) months gives us renewed energy to tackle those jobs that we have, perhaps, put off for too long.

Like cleaning up the dead undergrowth of the DIY Income Investor portfolio.

New Year's Resolution! (Portfolio Buy)

Keep Your New Year's Resolutions All Year
A new Financial Year - a good time to make new resolutions to improve my investing style. But this is one that is a bit different - it's a new purchase, in fact. Actually, it's a re-purchase of an old favourite that has come back onto the high-yield radar.

Friday, 4 April 2014

Anchors Aweigh!

Gene: You gotta deal with those anchors!
Frank: Yeah...
In the swirling blizzard of numbers that is the stock market it is often difficult to know which numbers are important.
Our ancient monkey brains deal with this by grabbing something that is thought to be known - and extrapolating from there: a bias called 'anchoring'. The problem is that there is often little connection between 'what we think we know' and the rapidly changing real world.

Thursday, 3 April 2014

It's All About the Yield (Portfolio Sale)

The runt of the litter?
The DIY Income Investor portfolio is based - for better or worse - on yield; the ratio of the historic and forecast annual income that the security will produce relative to the purchase price. The underlying assumption is that higher yields indicate that the Market is wary of the securities for some reason: they are out-of-favour and potentially high risk.

Usually these companies survive, the Market upgrades their future potential and the value of the holding increases. Sometime the recovery does not happen and the holding joins the 'dog' pen.

Wednesday, 2 April 2014

Release the Dogs! (Portfolio Sale)

I'm sure he'll be OK out there...
On an otherwise drab market morning one little ray of sunshine: one of my 'dogs' staggers to its legs and shows some sign of life.

Who am I to stop you - off you go, back to that big dog pound that is the LSE.

Buying a puppy is not just for Christmas! You're telling me. For nearly four years I've been giving this sad canine a home - but now it's time to show it the door.

2013/14 Performance - Review of Benchmarks

Times change - and so do markets. What worked as an investment strategy last year may not be so effective in the coming year.

One way of keeping up with the evolution of financial markets is to look at the pattern of benchmark performance. However, driving by looking at your rear-view mirror is not a recipe for success...

Tuesday, 1 April 2014

20% Gain = Happy Disposition?

The results are in: the total return on the DIY Income Investor portfolio for the 'financial' year 2013/14 (I measure it as 1 April 2013/1 April 2014) is a sliver under one-fifth (19.5% to be precise). Not too shabby - but less than the near-30% in the previous year.

Still, it seems that I could have done better...