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Diary of a Dumb Investor: my 7% return in 7 months

It may not have been the toughest market environment, but for a beginner I reckon I've done okay.

Diary of a Dumb Investor: my 7% return in 7 months

‘You had to try hard to lose a lot of money in 2012,’ said a smug-sounding senior City figure last week.

Barring some commodities and individual basket cases like the share markets of mainland China and Spain, practically everything has gone up over the past 11.5 months.

Me, I’ve made 7% on my investments, but that’s only in the space of the seven months since I took over this portfolio from Dumb Investor Mark 1 back in May.

Dead chuffed.

My portfolio 7 months on: Click to enlarge

You might uncharitably say I’ve merely ridden a wave, as Ben Bernanke and Mario Draghi, the generous chiefs of the US and European central banks, have propped up markets.

But I did make one shrewd move into Standard Chartered (STAN.L) back in August, buying when they sold off sharply.

And more fundamentally, even as a meek investment greenhorn I at least didn’t make the same mistake as the managers of investment trust RIT , one of the losing holdings in my portfolio (and part of my inheritance from the first Dumb Investor, who thoroughly lived up to his name, losing just shy of 10% of the original £10,000 before bowing out disgracefully in May).

The managers of RIT, which is chaired by Lord Rothschild, were just too cautious. Not so many months ago, in the depths of the eurozone’s existential crisis, such investors chose safer stuff to invest in. 

They’re now promising riled investors remedial ‘steps’. But RIT’s performance this year shows how avoiding risk is in itself a risky business; you risk not making as much money as you could have otherwise done. RIT remains on the ‘naughty step’, as Citywire reader sgjhaghsdg put it.

But if RIT was a slippery banana left for me by my predecessor on the portfolio, then BP (BP.L) was a vicious punji trap.

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9 comments so far. Why not have your say?


Dec 17, 2012 at 16:58

I guess this will start off a thread of 'Whose done best' but I can report that I've made a 34% increase in 5 months, having invested in SPARK VCT. In addition, a further 22% will be realised in January/February when SPARK return 2.5p per share to shareholders. In the next 15 months they should return a further 13.5p to shareholders.

I'm not recommeding (dyor) but, If you haven't seen this VCT before have a look.

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Dec 17, 2012 at 21:31

you may need to hand your tips to the dumb guy...the FTSE is up over 12% since 1 June (7 months?); he is actually losing relative money on the way up just like the other joker lost relative and actual money on the way down.

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Anonymous 1 needed this 'off the record'

Dec 17, 2012 at 21:53

Guess you can all retire now then ?

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Dec 17, 2012 at 21:56

The FTSE100 rise is one yardstick and the available deposit interest rate is another. You have done okay.

One danger when you have a better spell is to start imagining you knew and know more than you really do - so do not drop your guard.

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Tennis Junkie....

Dec 18, 2012 at 15:14

Thanks SJB for Spark VCT (Now managed by Albion Ventures)


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Dec 18, 2012 at 15:57

The big problem now is finding anything that's actually cheap. (Well, other than RIT!)

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Dec 22, 2012 at 11:46

Hi i bought pace at 80p, about 5 months ago, now it at £1.85, still think much further to go, also bought royal bank at 29p, before consolidation, not done too brill, but at last not loosing

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Dec 22, 2012 at 15:33

sgjhaghsdg - When shares are cheap, they are usually cheap for a reason.

An inability to find cheap shares may be an indication of general market confidence.

Using relative cheapness as a criterion means you are always having to assume that the market will start to recognise the share's true value. In my experience the market is not much good at doing that.

Buying "cheap" shares that then continue to drop in value is the easiest way to tie your money up and lose money at the same time.

I'll carry on momentum-investing, thanks.

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Dec 22, 2012 at 17:17

Hettie, Pace has been something of a moving 'feast', and volatile.

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