Monday 12 December 2016

Gone in November (Portfolio Sale)

November 2016 turned out to be a bad month for the DIY Income Investor portfolio with a fall in value of around 3%. December is more full of cheer, bringing the running total return for 2016 to around 28%, which is very satisfying.

Despite my best efforts to resist profit-taking I did make a large sale - and immediately regretted it as the price continued to rise.

The large recent gyrations in value of the DIY Income Investor portfolio have probably been due mainly to currency fluctuations as a result of Brexit. Rather that try to guess the direction that Sterling would go, I just stayed fully invested and was consequently bounced around. In Q3 the portfolio rose in value by 11% but has only managed 1% in Q4.

My sale was HSBC Holdings (LSE:HSBA) - as you can see from the price chart, it has shot up in price recently. On the basis that I didn't understand what was going on, and that I knew there was a large amount of money 'on the table', I grabbed an overall 26% profit on holdings from 2014 and 2016. As the price now looks like it is heading back down, I have also just sold my remaining small holding in HSBA dating from 2013 - but this time at a slight loss.

At least that tidies up the portfolio a little.

[Sale prices: £6.44 and £6.58]

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.


  1. Hi DIY,

    Interesting to see you have sold out of HSBC - I am still holding onto mine as I think there is further upside - the reason being that they are continuing to recover from the financial crisis. I'm hanging on for a bit longer, but lets see. The main thing to think is were you happy with the profit you sold out at? If so, no need for regret!

  2. I've also sold out of HSBC today. It'll probably keep rising, but I feel comfortable being out of it.

  3. I have mixed thoughts about HSBC:

    Price to book is still less than one, so there should still be some further upside. That said you can't judge investor sentiment with such precision...

    Morningstar still has the share as 'three star' despite the price rise over the past three months - it may drop to two stars (overpriced) in the near future if the upward trend continues, but bear in mind the investor sentiment comment above.

    I took some profit (much more modest than the 26% stated) by top slicing my holding. If the price rises further, I'll take more profit, however the yield of 5%+ is still attractive - and where else can you get anything comparable?

    Finally - any profit is nothing to be ashamed of, and a 26% profit is something I'd be truly proud of!


  4. Forgot to add that they are still working through their $2.5 billion share buy back programme (using part of the proceeds from the sale of their Brazilian operations). While this continues, the share price will have some upward momentum component.

    The programme has been running since 4th August, and I estimate that they have spent about $2 billion to date, so there is perhaps a further month of activity to go.

    Given the current price to book of 0.85, I'd expect the share price to get to at least £7/share by the end of Jan...

    We'll see - not long to wait!


  5. Well, how wrong can you be? HSBC finished the buy back two days after my previous post!

    Maybe £7 is optimistic for the end of Jan...

  6. Great portfolio you have, wish you luck in this year.

    ~Patric Caber