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Diary of a Dumb Investor: time to tear up my portfolio

As my investments continue to haemorrhage money, it's time to face the facts: my portfolio isn't very good.

 

by Dumb Investor on Feb 03, 2016 at 16:09

Diary of a Dumb Investor: time to tear up my portfolio

It’s time for an overhaul of my portfolio. I’ve already seen most of my gains whittled away as I wait in vain for ill-fated stock bets to come good, and some drastic action is needed.

The sell-off in markets since the beginning of the year has left my already weak portfolio looking even more sickly. There’s scant consolation in the fact that some of my worst performers haven’t actually fallen much further: the portfolio needed work before the New Year falls, and it definitely does now.

It’s time to take my head out of the sand. The disastrous nature of some of my investments has left me locked in inertia for too long. With so many things going wrong, where do you begin putting things right? Not knowing where to start, I have been wishing the problem away, losing ever more money in the process.

It’s a small miracle that I have somehow managed to hold onto some gains since taking over the portfolio from my brother nearly four years ago. But a 19% return over four years isn’t great.

Start from scratch

I want to start again from scratch. What’s stopping me from selling everything and starting again? Desperately hoping that my bad bets would come good has acted as a barrier, but so too has anxiety over my excessive trading costs. It would cost me around £240 in commission to Hargreaves Lansdown to sell all of my investments. But then there is the cost of reinvesting on top of that: I’m not considering piling into cash and sitting there in anticipation of a market meltdown, I just want a better portfolio.

For all your criticism hurts, it is right: my portfolio isn’t a proper one, just a stamp collection of stocks. I’ve been desperately hoping to impose some sort of asset allocation over the last year, but kept coming up against the same fears: don’t sell at the bottom of the market, and don’t trade too much.

But that has left me helpless as the market has gone from bad to worse. The best investors, I’m told, are able to ride out these periods of panic, safe in the knowledge of the underlying soundness of the businesses they invest in, or the balance of their portfolio. I have none of this comfort to draw upon.

While I haven’t lost money over the four years I’ve been in charge of the portfolio, this has largely been down to a few spectacular successes outweighing multiple failures. I guess this is what James Anderson, manager of the top-performing Scottish Mortgage Trust (SMT ), is talking about when he refers to ‘asymmetry of returns’: even an investor like me can’t lose more than 100% on an investment, while the investments that do spectacularly well, like Hutchison China Meditech (HCM) or to a lesser extent, Xeros (XSG) can deliver much more than that in growth.

But this is not a sustainable investment strategy. I’d love to say that I’d anticipated the explosive gains in Hutchison’s shares, but the truth is it was more a mildly educated guess that went very well. It’s certainly not something I can rely upon replicating.

And while it’s great to see a share like Hutchison rocketing, it’s not much use if my many failures whittle away at the gains I make on it. An annualised return of 5% is nothing to write home about.

Portfolio needs backbone

I don’t want to throw in the towel entirely with shares investing, but my portfolio needs a bit of backbone to do a better job of withstanding the sort of markets we’ve seen recently.

That’s not to say I’ve had unbridled success when I’ve invested in funds. But those that have gone wrong have largely been down to the same mistakes I’ve made when investing in shares. Witness JPMorgan Russian Securities (JRS ), bought in the hope of a quick recovery as the country was in the midst of the Ukraine crisis. While that political tension did subside, the plunging oil price then took its toll. It was a bet, not an investment.

So too Woodford Patient Capital (WPCT ). While the early stage and biotech companies Woodford is buying may seem exciting, placing 15% of my portfolio in a fund investing in these sorts of stocks does not make much asset allocation sense.

While I’ve been wasting energy on trying to spot the next big win in markets, whether through a fund targeting a niche market like Russia or biotech, or a share that looks cheap but could well be cheap for a region, I’ve been foregoing the less exciting, less volatile growth that comes from a diversified portfolio.

A few good global funds would do this for me in one fell swoop. I would allow myself to play around the edges, buying the odd share or riskier fund as I go along (I’ve got to have something to write about, after all) but with a core to the portfolio that would give me more of a chance in these choppy markets.

What’s more, it would not be too costly. While I’d be doling out another £240 to Hargreaves to get rid of everything in my portfolio, I wouldn’t be paying trading costs to invest in funds, unless they were investment trusts. And £240 seems like small fry when set against the sort of losses I’ve been making in recent weeks.

Your thoughts below would be welcome. Should I get rid of everything? And if not, what should I keep? It strikes me that RIT Capital Partners (RCP ) does this job of steady returns and diversification pretty well, and should survive. Taylor Wimpey (TW), I think, should have a good year: if nothing else, the much-vaunted UK interest rate keeps getting pushed back, which should help.

Stocks that definitely need to go are Rolls-Royce (RR), Centrica (CNA) and Pearson (PSON). It looks from what I read that Pearson’s dividend could come under threat, and I think it’s time to draw a line under my substantial losses on the first two. I’m also unnerved that Neil Woodford has sold both of them. If he thinks there is something wrong with the businesses, I think it’s unlikely that I’m about to prove him wrong.

I’m off to do a bit more research into my portfolio overhaul. I think you’ll agree it’s been a long time coming. Take one last look at this grim collection of stocks, it won’t be around for much longer.

Stock Units held Price (pence) Value (£) Cost (£) Gain/loss (£) Gain/loss (%)
Centrica plc  528 196 1034.88 1498.11 -463.23 -30.92
Hutchison China Meditech  75 2370 1777.5 349.33 1428.17 408.83
Imagination Technologies Group plc  537 135 724.95 1015.92 -290.97 -28.64
JPMorgan Russian Securities   235 282.25 663.29 996.78 -333.49 -33.46
Legal & General European Index   693.963 288.6 2002.78 2000 2.78 0.14
Legal & General Group plc  499 220.9 1102.29 998.39 103.9 10.41
Pearson plc  87 756.5 658.15 998.1 -339.95 -34.06
RIT Capital Partners plc   85 1580 1343 990.64 352.36 35.57
Rolls Royce Holdings Plc  98 512 501.76 967.31 -465.55 -48.13
Scottish Oriental Smaller Cos Trust   172 702 1207.44 996.91 210.53 21.12
Taylor Wimpey plc  928 191.9 1780.83 999.99 780.84 78.08
Woodford Patient Capital Trust PLC   2910 88 2560.8 2910 -349.2 -12

Any opinions expressed by Citywire or its staff do not constitute a personal recommendation to you to buy, sell, underwrite or subscribe for any particular investment and should not be relied upon when making (or refraining from making) any investment decisions. In particular, the information and opinions provided by Citywire do not take into account your personal circumstances, objectives and attitude towards risk.

76 comments so far. Why not have your say?

Craig Ross

Feb 03, 2016 at 16:59

Small investors shouldn't own individual stocks.

Simples.

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Lilly

Feb 03, 2016 at 17:01

Don't beat yourself up! you haven't done too badly!

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Michael Peters Fenwicks

Feb 03, 2016 at 17:03

Di,

You have a habit of over thinking strategies while hence the grievance along contradiction.

Should you sell the lot and my advise comes with a question while what have you learnt let alone repeat the same mistakes hear say. Therefore common sense says that perhaps just restructure along carefully aligning your overall positions by taking small baby steps.

If you restructure and carefully adjust you will learn a lot along establish a collection of principles that not only lead you to better meaningful strategic thinking from the overall challenge. Remember you're not alone while many of our friends in the hedge fund business closed their doors last year.

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Chris Clark

Feb 03, 2016 at 17:04

@Craig Ross - Why?

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Jeremy Stewart

Feb 03, 2016 at 17:05

I agree with Lilly. You could have done much worse - as I'm sure some have.

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North Star

Feb 03, 2016 at 17:11

I have one worse than that Aberdeen Asset Management down 30% or so.

Like a good sailor I'm riding this out rather than selling up. The market is in a daft spell at the moment. Reduced oil prices could be the best thing to help the world economy. Apart from the oil states and pension funds most of us, including most companies, will benefit from lower oil pricing. Lower oil prices must be saving airlines a fortune and not to mention other high energy users such as the chemical industry.

Time for a cool head I think.

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JEL G

Feb 03, 2016 at 17:14

At least make sure that you do not sell your winners......... only your losers, otherwise you WILL be "The Loser".!!

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alangb

Feb 03, 2016 at 17:16

You are still showing a profit of £636.19. Stay pat.

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sloccy123

Feb 03, 2016 at 17:33

Run your profits(with a trailing stop loss) & set a stop loss of say 20% & consider selling any shares/funds that have hit your stop loss target or worse!

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Pensioner

Feb 03, 2016 at 17:37

Dumb Investor. Tip: See my comment on the forum under "Fundsmith". You will save precious time and money away from individual shares. Research and invest in good Funds and Investment Trusts. Invest in good managers. Be proactive not patient. If a fund is struggling switch to a winner. I rest my case.

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Law Man

Feb 03, 2016 at 17:37

"19% over 4 years is not great". Nearly 5% p.a. is not bad.

I criticise the Russian IT as gambling, but otherwise you have had some bad luck: you would think Pearson and RR would be OK.

As Craig Ross queries, should you be buying shares for such small amounts; but if you do it for fun, fine.

I would sell JP Russia, Centrica and Pearson, but not everything.

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Michael H via mobile

Feb 03, 2016 at 17:39

At least your up! Would you want to own any these shares further down the line?

Pearson ...hmm lot of negativity on that stock...

Would you sell some losers hold the cash and what would you buy if the market drops some more...not for a quick buck but a long term hold, something that pays a divi...always a blessing when the markets tumble..

I prefer funds in whatever guise they come in, most shares I regard as too much of a risk ....but i like the odd punt on BP.

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DKC

Feb 03, 2016 at 17:40

Suggest you think long and hard regarding an underlying strategy for your investing process. I was where you were about 5 years ago and realised that I am not clever enough to shoot the lights out. Recognising that what should I do to remedy it.

As suggested above I generally use collective investments (ITs, ETFs, OEIC) (with a few individual shares for some fun) and put money, pound cost averaging, across a number of unrelated sectors on a monthly basis. The counter intuitive part is to put additional monies in currently out of favour sectors to bring back towards my intended asset allocation (across the sectors

As long as my personal investments continue to beat my pension (all in low cost trackers) in terms of annual return I am reasonably happy. Appreciate it is always possible to do better.

Interestingly I am down about 4% since 1 Jan 2016 overall, but currently up by 3% on my "Permanent Portfolio" trial over the same time frame.

Interesting times.

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David Lines

Feb 03, 2016 at 17:43

Your fears are those shared by everybody else and there have been enough people who have decided to bail out and create the share price avalanche we've just witnessed. The moment to bailout is therefore passed, you've missed that boat! That may prove to be a good thing, it doesn't take much good news to quickly push the FTSE 100 over 6000. Having said that I agree with Craig, I'd stick with funds not individual shares and I'd go for Trusts which make it easier to deliver a balanced portfolio.

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sloccy123

Feb 03, 2016 at 17:44

I agree with readers view that perhaps Unit Trusts/Investment Trusts would be a safer bet rather than individual shares. I would suggest selling some of the losers & re-invest in Fundsmith(as mentioned by Pensioner) or or ConBrio UK Buffetology funds etc

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horshamtim

Feb 03, 2016 at 17:53

I tend to agree with Lawman, Pensioner and Craig Ross - with such a small portfolio owning individual shares means you won't be able to get much diversification and will have proportionately higher transaction costs eating into the gains! However if the portfolio is for fun rather than a key part of your investments, what the hell.

For a similar size portfolio I manage for my partner, I use two ITs and one fund.

Its also fair to say that if you started in 2012, much of the gain during the recent bull market was already in the price, so the ability to make great returns was more limited.

RIT is certainly one to hold on to for the long term in the current conditions, and Taylor Wimpey should have another year of good returns.

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Mike Edwards

Feb 03, 2016 at 17:58

price paid and date of purchase would be helpful although the first can be calculated and the second more or less guessed. It seems you have held onto losers during months or years of decline. Selling as soon as the uptrend is clearly broken, ie., RR at 965p, would have saved a big loss and PSON at around 1000p . A bit of simple chart watching would be worthwhile.

even so, 2015 was not easy.

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Robert Goddard

Feb 03, 2016 at 18:26

As a pensioner. My investment capital may have suffered, but the divide des keep rolling in. I stick...

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mike88

Feb 03, 2016 at 18:47

If it's any consolation my portfolio consisting of ITs and UTs is also rubbish. I also fell for the Woodford hype even though my head told me to avoid investing in companies with which the manager had relatively little experience.

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Chris Clark

Feb 03, 2016 at 19:09

Well DI I've got 26 share investments and they're down 12% since January, but they got 8% growth last year when the indexes showed losses. So as it is a bonkers market I'm holding. Think you are right about RR though, my equivalent looks to be Sierra Wireless.

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colin fellowes

Feb 03, 2016 at 19:29

As has been said on many, many occasions -- it's time in the market not timing. Give it 12 / 24 months and things may be rosier. To sell now merely crystallises your paper losses.

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AlJolson

Feb 03, 2016 at 19:36

You have not done too bad, remember the saying a profit is a profit.

I notice that "Pensioner" mentions Fundsmith and probably selling out your current investments and buying into Fundsmith could ease your frustrations with managing your own portfolio.

I'm sure Terry Smith will do a better job for you, here is a person with some nous.

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J Thomas

Feb 03, 2016 at 20:30

To give yourself a benchmark you should have included a five year cash bond. Four years ago you could have achieved 4.25% pa, which would now have given you an 18% cumulative interest yield.

Too late now. However when you rebalance I would buy a £1000 bond maturing in five years time, you will then have your benchmark against cash.

And you could also buy four gold Sovereigns which will cost you about £900 at low margins. You will then have an investment you can track with the gold spot price on a daily basis. Diversification is the key.

Congratulations with Hutchison however, I wish I had invested a few years ago.

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Lee Whitehead via mobile

Feb 03, 2016 at 20:51

I wish my portfolio had done as bad as yours instead of being smashed recently. I sold my only winners recently thinking they were overvalued, in BAEs case I stand by that, but NG has risen again, everything else has been affected by oil fear, bank fear, biotech fear, China fear, Brexit fear... But I'm still holding, time will tell if it's a terrible mistake, I think the companies are good though. I don't need the money yet so...

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S_M

Feb 03, 2016 at 21:03

At all levels this portfolio has no balance or apparent strategy. To have over 15% of your portfolio invested in emerging markets some of which no doubt is in china is asking for trouble. Here is what I would do

Sell every share/fund. Put it all into cash and segment into £1k chunks, then:

Allocate 80% of the cash to actively managed funds. Focus on the following:

1) Make sure you have a good geographic spread with most of the money allocated towards the developed world (UK, Europe, North America). Make sure you have a good split between large, mid cap and smaller company funds.

2) Look at alternative asset classes eg commercial property funds or REITs

3) Research each fund and the fund manager before you invest. Check their longevity and track record. You can get this information from Bestinvest's website for free through their investment selector.

4) If you have to invest in individual stocks in this market, go for a solid companies that are making profits, have a solid balance sheet and giving a decent dividend yield.I guess there are a couple of companies that you have bought into that you could hold onto.

Good luck!

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Pensioner

Feb 03, 2016 at 23:17

Sloccy123: Has pinpointed a good fund. Conbrio UK Buffetolgy. A good manager a fan of Warren Buffet of course. Small number of holdings about 29.

Nimble and price about 191.37 . Up 16% to Jan 2016. Maintain that and double £1000 in 5 to 7yrs easily. But of course watch progress.

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Pensioner

Feb 03, 2016 at 23:17

Sloccy123: Has pinpointed a good fund. Conbrio UK Buffetolgy. A good manager a fan of Warren Buffet of course. Small number of holdings about 29.

Nimble and price about 191.37 . Up 16% to Jan 2016. Maintain that and double £1000 in 5 to 7yrs easily. But of course watch progress.

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Ladysaver

Feb 04, 2016 at 02:04

Oh, for goodness sake. What panic.

IIMHO you have not made the most basic step in investing. Ask yourself, are you in for growth, or for dividends? Or a bit of both? And do you understand your timeframe?

First, know for how long you're investing. If it's the long haul, WTF if markets fluctuate in the short term? Pick things that you believe can deliver over a 10 year timeframe. Watch them after maybe one year, but more importantly after 3 years and 5 years, and look at Total Shareholder Returns (TSR), namely divs PLUS growth. Dump them only if they fail the TSR test after a decent timeframe. And be patient.

Also, be clear whether you want income or growth. If you need/want income, pay less attention to short-term price fluctuaton, Look at divs. A good divi payer can compensate in divs for price fluctuations. Much b….sh.t is talked about price, ignoring the value of divs. Have you picked div payers, and tracked dividends, and looked at TSR?

Anyone one who plays in the stock market has to be either in for the long haul or the short game, and needs to know which. And needs to look at divs (before investing) and needs to understand why they're vital to actual returns.

Your despair now suggests you haven't considered either.

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Craig Ross

Feb 04, 2016 at 07:27

I think a low-cost ETF or investment trust is obviously the solution.

Also, you don't have any money when you buy shares, any more than you have money when you buy a car. You have the shares. You handed over the money in return for the future stream of earnings. If I told you what I'd "lost" in the last few weeks you'd be very surprised, but the "loss" is the present price someone will quote to take the lot off my hands this second. It isn't relevant.

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S_M

Feb 04, 2016 at 08:06

Not a fan of ETF's, if you track some of the major indices eg the FTSE 100/Nikkei amongst others you are not doing particularly well over the last decade or so. The more racy ETFs also can have tracking errors due to liquidity issues in volatile markets.

A good fund manager will outperform his/her benchmark consistently and its not hard to identify them these days with a little bit of research. Marlborough Special Situations has had the same fund manager for decades, it's returned in excess of 200% over the last 10 years and over 2000% in the last 20!

The only reason I would consider purchasing an ETF is to hedge gold against falling equity prices, thats it.

ETFs no thankyou DYOR.

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Micawber

Feb 04, 2016 at 08:35

I'm with Ladysaver. It has been hard to view this portfolio as anything other than a vehicle for journalism. You need to define your aims, your period for results, your strategic conclusions. Only then consider what changes to make to the Pf so that it matches them.

If that doesn't suit your journalistic aims, then the hell with it - go for a trading portfolio with a short term view based on speculation, momentum, stop-losses etc. and we can all have monthly fun

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mike88

Feb 04, 2016 at 08:54

If Dumb Investor sold his entire portfolio and invested the lot in ETFs that would make for an extremely boring series of articles. Diary of an ETF investor doesn't interest me.

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gggggg hjhjkl;'

Feb 04, 2016 at 16:11

I agree with Ladysaver and Micawber, your so called portfolio appears to have been nothing more than a 4 year journalistic exercise.

There is a need to define a clear objective i.e momentum, value, yield, recovery etc and then to stick to it. If not then as suggested go for a trading portfolio.

I myself started some 16 years ago with a momentum portfolio which was extremely successful for a couple of years , but then turned sour. After much thought I turned to a yield portfolio, which in the intervening years grew far to big.

I have reduced this to half its original size ( through all the intervening downturns). I am now happy in general to sit and watch the current volatility, whilst feeding funds into my ISA, SIPP and VCT packages, as and when I deem appropriate, having a need to keep my taxable dividends under strict control.

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Anthony Tinslay

Feb 04, 2016 at 18:34

And I thought that dear DI had either emigrated or passed on. Now that he has come out of hiding and suggesting to sell everything I feel that the market must have bottomed out and will slowly but surely go some way up again. Why does he expect things to all go up all the time when inflation is flat at zero? His methodology is to keep Harbreaves in business as wll as pay more stamp duty on future replacement purchases. Clearly DI is not suited tio investing in a selection iof shares. he should either get out altogether and stay out or place his funds in no more than three solid Investment trusts selected to match his desire for spread of risk in areas he is comfortable with. That would of course end this dialogue!!

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Danny Lovey

Feb 04, 2016 at 19:17

The problem always is, when the market looks good you feel comfortable. When the market is the way it is then you get the jitters and think that you have got so many things wrong. But who ever thought we would see the Oil price down where it is or commodities so low. If we are all honest I don't think any of us saw such dramatic falls coming.

Have some I am worried about as well, but take the view that those in the main I will hold for recovery

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sgjhaghsdg

Feb 05, 2016 at 08:20

I can see no signs of an asset allocation strategy, geographic breakdown, nor sector and market cap breakdown.

It all smells of "it seemed like a good idea at the time".

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mike88

Feb 05, 2016 at 08:27

There is geographical spread of sorts including Russia and the Far East with companies such as Rolls Royce whose earnings are mainly internationally based. The strategy would be greatly improved had DI had a stop/loss system. Racking up losses of 40% on individual stocks is inexcusable.

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Pensioner

Feb 05, 2016 at 16:11

no more comment to me on this topic please citywire.

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Colin Cottell

Feb 05, 2016 at 21:54

You say your selection of Hutchinson China Meditech was" a vaguely educated guess", but that is a bit harsh. If you were in Mark Slater's shoes, (it's his biggest holding I believe) people would be calling you a genius.

No point selling everything unless you have a better plan as to what to do with the money.

I bought into a miners' fund which was 45% up but is now is 59% down, so I am just going with the flow. There is absolutely no point in selling now.

According to Lee Freeman-Shor's book The Art of Execution, the secret of successful investors is having a few big winners and lots of smaller losses, the difference is fund mangers don't publicise their losses like you.

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Lee Whitehead

Feb 06, 2016 at 17:56

All of my portfolio is in the red now, on china fears, oil fears, Brexit fears, us fears, emerging market fears, mining fears, too many fears!

When I can add to some and lower my price I will, because I believe in most of the companies there, granted there are a few that turned out to be dogs, but it is what it is, thankfully I don't need any of that money now, so it sits there for sunnier days with less fear, and there will be some, just may take longer than I originally expected

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Lilly

Feb 06, 2016 at 21:34

It's refreshing to hear someone tell it how it is.

Thanks

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Robert Goddard

Feb 06, 2016 at 22:38

I think that this one has gone on long enough. We have all had our say and repetition is boring.

Robert.

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colin mayne

Feb 07, 2016 at 09:54

santandre 1 2 3 account. 3% on 20k . no tax deducted from April. Always ready and available, plus you sleep at night !!!

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Ben Dover

Feb 07, 2016 at 09:56

19% over 4 years is actually beating the market. So well done.

I own some JRS (JPMorgam Russian Securities). Its CAPE is less than 5, the lowest around the globe. Valuations that cheap usually imply strong investment returns. And what is cheap can of course get cheaper. But that's the chance you take. Sometimes you need a little time for your idea to work.

"It was a bet, not an investment." What's the distinction?

I know Russia is a mess, but its misery won't likely last forever.

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backspace

Feb 07, 2016 at 10:00

You have read the future 50% of the time and are still in front good.dont sell anything till the companies announce what their profits are going to be then make your move with the wisdom of company knowledge . WAIT

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John Roycroft

Feb 07, 2016 at 10:15

If there are shares and trusts that are in negative territory, but the argument for investing in them is as strong as it was when you first bought them, then buy more of them. It's a cliche, but time in the market rather than timing the market is sound advice.

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Stephen B.

Feb 07, 2016 at 10:33

How about running two portfolios. One would be diversified, low-risk and infrequently traded, the other would be explicitly active with nothing held for more than a few months and with no attempt at balancing it. That would give something to write about (and for readers to take potshots at) and let us compare the results of the two strategies.

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Drake

Feb 07, 2016 at 10:35

I notice that the minimum amount you invested in any one share (but one) was around £1000. It's a good strategy to spread your bets evenly, as sod's law (the most reliable financial tool) predicts that the one you underinvest in will be the one that does best. Had you invested £1000 in Hutchison China Meditech I calculate your overall return would have been 18%. Even starting with a nervous £350, a momentum investor would have brought their investment up to at least £1000 as the shares rose. Momentum investing is underrated.

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Kenpen2

Feb 07, 2016 at 16:34

Lee Whitehead, well said - I'm down there with you.

Ben Dover - thanks for the reassurance re JRS.

DI - for me the standout omissions from your portfolio are Oils & Miners - why not go for one of each at their current bombed-out prices ? Not quite as bombed-out as they were when you wrote this article but still well below my average buy prices - and I still believe that long-term I've bought some bargains :-/

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Jeremy Stewart

Feb 07, 2016 at 16:54

Is the only way of stopping notifications to post a new message ?!

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David Lines

Feb 07, 2016 at 17:07

looks like it!

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backspace

Feb 07, 2016 at 17:38

Keep the ones with dividend payments and flog the rest.

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backspace

Feb 07, 2016 at 17:45

Sell rolls -royce straight away this one will fall more next week

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Jeremy Stewart

Feb 07, 2016 at 18:08

Well that hasn't worked.

Citywire, will you please eliminate my notifications on this post: I have removed the tick four times now and it returns each time. Alternatively please remove the entire post which has been overworked for comments anyway !

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Ben Dover

Feb 07, 2016 at 18:08

Remember Greece? If you had bought when they had their crisis, and everyone was saying what a basketcase the country was, then you would have done very well. Greece went on to be the best performing market for a year.

That's my logic for investing in Russia. There's so much doom and gloom, and the markets are so cheap that things only need to get less bad for the markets to recover.

That's the proverbial "in theory", anyway.

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alangb

Feb 07, 2016 at 18:36

No more emails please

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alangb

Feb 07, 2016 at 18:36

No more

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backspace

Feb 07, 2016 at 21:10

We need the mid caps to fall a bit to 40 pence and 60 pence with a dividend payment more penny shares things have gone too dear

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alangb

Feb 07, 2016 at 23:01

xxxxx

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alangb

Feb 07, 2016 at 23:01

Drake

Feb 08, 2016 at 10:39

The uncheck box works perfectly well and I am about to prove it.

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alangb

Feb 08, 2016 at 11:08

It does not work for me. I have kept unchecking the box below with no success.

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Pensioner

Feb 08, 2016 at 11:12

It also fails to work for me.

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alangb

Feb 08, 2016 at 11:19

It still is not working.

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Drake

Feb 08, 2016 at 11:23

WHOOPS! YOU ARE RIGHT.

I'll try again.

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Stephen Lee

Feb 08, 2016 at 11:37

Many of us are, no doubt, in a similar situation - portfolio showing extensive losses. I keep my more serious money in unit trusts, all within ISAs; my investments in individual shares fall into two separate portfolios: one in ISAs and another as non-ISAs.

I continually review the individual shares and tend to do the unit trusts once a year. (Yes, I know it should be more frequent!)

With regard to the individual shares, like Dumb Investor, I decided to do a major clear out. My initial thought was to forget past performance, just look to the future. I list everything in the ft.com website and rely quite heavily on the "mean broker forecasts" that they publish.

That's a long pre-amble......but to say that I'm now in a bit of a dilemma as pretty well all my shares have very positive forecasts. Whilst that is good news, my proposed major clear out will probably not now happen - I just need to bite the bullet on the losses on a few that will need to go.

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AlJolson

Feb 08, 2016 at 11:54

The check box does not work for me either!

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alangb

Feb 08, 2016 at 12:31

Can you please make the check box work correctly?

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ben ski

Feb 08, 2016 at 14:25

I must say I'm surprised you've gone this far without calculating what a mild correction would look like ... It is easy to feel smart in a bull market

In a recent book on investor behaviour, the most successful tend to either cut losers early and run winners, or buy-and-hold and add to positions as they become cheap ... The panic selling of losers and rotation into yesterday's winners/defensives is where investors lose decisively

Buffett asks himself if he'd be willing to hold this investment for the next 30 years? Soros sells things that drop 5% and moves onto something else ... Rational/systematic approaches work – knee-jerk emotional ones create market inefficiencies ... I'd suggest the endowment model ... With valuations where they were I only had 30% long stocks going into mid-2015, the rest in hedge funds, property and loans ... Short-termism is a weakness, but if you're going to succumb to it, better look at valuations (Scottish Mortgage Trust certainly seemed expensive when you bought it)

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ben ski

Feb 08, 2016 at 14:27

PS - Russia is a gamble, but may be one of the only decent gambles out there at the moment ... It's decisively cheap

Long/short equity is my favourite asset class this year

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Craig Ross

Feb 08, 2016 at 15:12

If Dumb Investor is pursuing a strategy as an intellectual exercise he doesn't need real money. If he's using real money he has too little of it to do what he's doing: the costs will kill him.

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Drake

Feb 08, 2016 at 15:53

CITYWIRE - WILL YOU PLEASE SORT OUT THE CHECK BOX.

I have unchecked and hope not to see any more of this debate.

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alangb

Feb 08, 2016 at 15:55

Untick my checkbox please

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JEL G

Feb 08, 2016 at 17:38

Another bad day on the market today........... this will sort out the men from the boys!!

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ben ski

Feb 08, 2016 at 17:54

I'm still anticipating at least another 20% off markets – lots of earnings downgrades in the US ... Then maybe a Brexit? Could be a long while before things start looking cheap again

Shows the importance of diversification – it's good to have noncorrelated assets in these markets ... Takes the timing and panic out the equation – parts of your portfolio get cheaper: future returns get higher

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alexinexile

Feb 11, 2016 at 13:15

I agree, small time amateur investors shouldn't be in single company shares.

If you like Biotech then go for Axa Framlington Biotech, very volatile but a great long term bet. Try some absolute return like SLI Global absolute return and City Financials Absolute equity fund.

Fund smith global equity is also a top pick for global equities.

It sounds like you have finally wised up to the comlaint most of made. You are either a trader or an investor! But if you want to tinker around the edges then why not, as long as you lock down some solid growth through a core of funds that top their sectors and then mix them up in the right asset allocation.

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