To begin this blog I thought it appropriate to talk about where we stand, with regard both to the market overall as well as the performance of the portfolio to date.
As a largely UK-invested portfolio my obvious focus is on the current state of the UK economy and the stock market overall. On June 23rd of this year the UK overall voted to leave the EU, causing short-term chaos in both the FTSE 100 and FTSE 250 markets, as well as a host of markets around the world. It took just a week for the FTSE 100 to recover, and a little longer for the FTSE 250 (August 5th) reflecting the realisation that Brexit will not happen overnight. The damage to the portfolio was painful, largely due to exposure to house-builders (Persimmon & Berkeley) who were hit hard.
So lesson #1: If you can’t stand to see a company in your portfolio drop 20% plus in one day, you’re probably not suited to individual stock investing!
Recovery in the portfolio progresses at a suitable rate and still remains approximately 11% up since inception in August 2015, equal to the FTSE 100 and ahead of both the FTSE 250 and FTSE All-Share. Given the smaller nature of the portfolio I consider it appropriate to judge my portfolio against the All-Share.
A pretty choppy performance rescued at the last minute by a late surge in August! My over-exposure to small and mid-cap stocks fared badly in the days after Brexit however I’m fully prepared for increased volatility for what will hopefully be increased gains.
I have made some changes to the constituents in the portfolio recently, reflecting my changing opinions on the potential of certain companies and the identification of others I believe have greater potential to provide greater returns. Recent additions include the following:
Gilead Sciences (GILD)
AB Dynamics (ABDP)
Dialog Semiconductor (DLG)
Astute readers will identify that three of those four are in fact not UK based, reflecting opportunities in other markets I believe will produce acceptable returns in the long-term. I will discuss in coming weeks the relative valuation of markets around the world at this point in time.
Disclosure: Apple (AAPL), Gilead Sciences (GILD), AB Dynamics (ABDP) and Dialog Semiconductor (DLG) are constituents in the portfolio.