Good Portfolio Result for 2021!

Despite the dislocations of Covid, 2021 has been a good year for the DIY Income Investor portfolio, which has registered a 16% increase in total value (i.e. market value + retained income). 

I hope your own efforts were well rewarded.

This past year has been one of isolation and inaction - maybe not much fun, but perhaps ideal for the DIY Income Investor:after all, there was more time for that all-important essential research.

It has been a good year for many markets:

• FTSE 100 up 14.3% 
• FTSE 250 up 14.6%
• Dow up 18.9% 
• S&P 500 up 27.2% 
• Nasdaq up 22.1% 
• Stoxx 600 (the pan-European benchmark) up 22%
• France’s CAC index up almost 29%
• Germany’s DAX up nearly 16%

One of the features of the DIY Income Investor approach is that, once you have made the initial investment decision, you just sit back and (hopefully) watch the income roll in. The main effort is then to re-invest the income. Occasionally you might have to cash in a particular investment that has jumped in value. Alternatively you might sell something that is not performing as expected.

As it happens, my market activity has been fairly minimal in 2021. I don't recall any sales due to a jump in value (I usually sell if the increase in capital value is more than 5 times the annual income). 

One holding was bought back by the issuer (after a long period in the doldrums), returning 2/3rds of the face value and giving me a modest 19% capital gain:

• MSBR (Manchester Building Society pibs) 

I did junk a couple of 'disaster' shares, which I had held for much too long, losing some or nearly all of their initial value

• RDI (Redefine) - losing around half the initial investment
• CWD (Countrywide Estate Agents) - losing most of the initial investment

One security was modified due to a Corporate Action (a change in ownership):

• PMO1 (a fixed-income holding of Premier Oil), which was exchanged, partially, for shares in HBR, as well as cash (I have since sold HBR).

However, the income stream has maintained itself well (with no effort on my part, I should say). I have therefore made some new purchaseS to keep my cash working as hard as possible. Some of these were additions to existing holdings (e.g. MNG, APF, GSK, BSV, BP, CSN) based on a) yield and b) how small the holding was as a percentage of the portfolio.

There have been some novel investments, however including:

• CEY (Centamin) - a gold mine in Egypt, which has not done as well as I hoped
• FSFL (Foresight Solar Fund) - a fund specialising in sustainable energy projects
• SGLN - an iShares ETF based on physical gold (gold dropped 4% in 2021)

Of these, SGLN is perhaps the most noteworthy as it has no income. I view this as 'dipping my toe in the water' on the theory that - on the basis of seeking 'stability' - you should divide your portfolio into thirds: shares, bonds and gold. More on that later.

Here's looking forward to an interesting 2022!

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.