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Diary of a Top Stocker: can I invest my way out of trouble?
I've identified 11 Top Stocks that could be good value after the recent falls. Have a look and help me prepare for a big roll of the dice.
It’s high time I updated everyone on what I have been doing – or rather not doing – with the Citywire Top Stocks® portfolio.
I’m afraid my performance has been poor, worse in fact than the Dumb Investor! However, I’m not giving up yet, as I think the recent market falls give me an opportunity to buy into some good stocks at a good price.
How I’ve lost 12%
Yes, I’m a shocking 12% down on my investments so far. I’ve spent just over £6,000 on six stocks, which are now worth a total of £5,281. That leaves me with just under £4,000 of Citywire’s money to invest. What will my boss say?
The performance looks bad against a FTSE 100 that has fallen 4.8% since the start of the year. It looks less bad, however, against the index's fall of 10.6% since 23 February, which was unfortunately when I started investing. Part of my problem is that I invested as the new year rally started to fade.
Two of the three stocks I chose to start off with have held up well. The £996 I spent on GlaxoSmithKline (GSK.L) is now £964, according to my account at Barclays Stockbrokers. The £999 in Vodafone (VOD.L) is £965.
However, Royal Dutch Shell (RDSb.L) has disappointed, turning £989 into £842 today as economic fears have sapped the oil price.
My next purchase was Weir (WEIR.L), the pump and valves manufacturer and favourite of fund manager Nigel Thomas. I took a punt on Thomas knowing more than the stock’s many short sellers, but this has so far proved fruitless as the company’s oil-related business has slowed down dramatically. Here £1,007 has become just £843.
I followed this up with BP (BP.L). This is the one I’m really embarrassed about. My decision to buy shares in the troubled oil giant before the market opened on 5 March was in response to an article saying BP was poised to finalise a compensation settlement over the Gulf of Mexico disaster. I hoped to capture a quick rally, which didn’t transpire. Since then my £1,011 has fallen to £773, easily my worst performer. Lesson learnt, I really didn’t need another oil giant.
All I can say is I’m not alone. I listened to Tom Dobell, manager of the M&G Recovery fund, criticise BP’s performance recently, and it made me think something will happen at some point at the company to improve returns. It just may not happen quick enough to erase my mistake.
I don’t feel so bad about my last purchase, Cookson (CKSN.L), the materials technology company, on 2 April. I bought £1,013 of shares as it became clear that the company was considering a demerger to increase shareholder value. That hasn’t happened yet, with my stake worth £891 today, but I’m pretty confident it will.
Why I’m not giving up
I may not be a great stock picker, but I’m giving this portfolio another big roll of the dice.
To be fair to myself, only four of the 42 current Top Stocks have risen in the past three months. Given when I started and that this is the pool of stocks I have to choose from, perhaps I shouldn’t feel too bad. To be in positive territory since I’d have had to hold house builder Galliford Try (GFRD.L), IT company Misys (MYS.L), National Grid (NG.L) and ITV (ITV.L).
My biggest problem has been that the Top Stocks are all good companies. They’ve generally sat in the portfolios of our fund manager panellists for some time, and as a result are generally well known and fully valued situations.
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Look up the funds
Look up the shares
- Galliford Try PLC (GFRD.L)
- Prudential PLC (PRU.L)
- Micro Focus International PLC (MCRO.L)
- ITV PLC (ITV.L)
- Bodycote PLC (BOY.L)
- Taylor Wimpey PLC (TW.L)
- BG Group PLC (BG.L)
- Smith & Nephew PLC (SN.L)
- Devro PLC (DVO.L)
- IMI PLC (IMI.L)
- Reed Elsevier PLC (REL.L)
- GlaxoSmithKline PLC (GSK.L)
- Vodafone Group PLC (VOD.L)
- Royal Dutch Shell PLC (RDSb.L)
- Weir Group PLC (WEIR.L)
- BP PLC (BP.L)
- Cookson Group PLC (CKSN.L)
- Galliford Try PLC (GFRD.L)
- Misys PLC (MSY.L)
- National Grid PLC (NG.L)
Look up the fund managers
More from us
- Buy low, sell high: we test the theory
- Diary of a Top Stocker: pouncing on battered Weir
- Diary of a Top Stocker: buying at the top of the market?
- Citywire Top Stocks
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