Talking of which, I've been putting some more available cash to work with something a bit counter-intuitive.
It is unusual that you are able to 'stress-test' your own portfolio. But the currency and market fluctuations of the past month or so have been so extreme that it should be possible to make some conclusions about the stability of your portfolio.
My own 'baptism of fire' came in 2007/08, when the global financial system nearly melted down. The value of my then portfolio - which was mainly invested in high-yield UK dividend shares - plummeted by a total of around 50%. I held on, grimly, to most of the portfolio, fearing that I had wasted the money that I had carefully saved over many years - but also aware that selling off at that time would just make the loss 'real'. However, fortunately, the portfolio recovered, initially by over 50% in 2009 ( that sounds good but - because of simple arithmetic - it was not until a few years later that the portfolio, more or less unchanged, fully recovered its earlier value.)
That shock led me to be more cautious and to diversify some of the risk I was taking with high-yield dividends by buying more fixed-interest securities like UK government debt, corporate bonds, preference shares and building society PIBS.
At some stage - and this time without any traumatic experiences - I decided to diversify my currency risk as well as to simplify the investment approach (primarily for the pension-oriented SIPPs that would carry on - eventually - without my input) by buying Exchange Traded Funds specialised in dividend shares or fixed-income securities around the world. That decision had mixed success - and I discovered that ETFs didn't behave in the way that single securities do (surprise, surprise).
But they ended up doing what they were supposed to do - perhaps too well, as it turned out.
The negative impact of the Brexit vote in the UK has produced the latest stress test - this time with a surprising result. The value of Sterling fell by 15% - the value of the portfolio soared, particularly the foreign ETFs. Then when the Pound strengthens - the portfolio falls.
As it turns out - and most investors were aware of this already - the London Stock Exchange is pretty international (at least the largest 100 companies quoted in London, the FTSE 100). Conclusion: by adding foreign ETFs I might have just over-egged the cake.
Finally, what could be more disruptive than an unexpected result to the US Presidential election?
As it happens the portfolio was down yesterday (the day the result was announced) but firmly up today, as international markets apparently decided things might turn out to be OK.
So, my current strategy modification is to go a little more UK-centric and to focus on direct investment in single securities but to keep the international ETFs for the pensions.
The latest purchase (last week) is Countrywide (LSE:CWD) - the UK's largest estate agent, with a range of add-on property services. Because of the general sense of unease around the UK property sector, and expected poor second half results, the price has fallen - resulting in an attractive forward yield of over 7% coupled reasonable dividend cover and a diversified business model. The 2016 Interim Report looks OK to me.
The key to its value is whether the UK property market will really continue to lock up - I'm guessing not. And it seems like the market might be agreeing with me as the price is up since I purchased - testing the £2 level today.
[Purchase price: £1.873]
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.