Page 8 - DIY Magazine June 2018

SPRING HAS SPRUNG AND WHEELIE DEALER’S PORTFOLIO HAS STARTED TO BLOSSOM
DIY Investor Pete aka the ‘Wheelie Dealer’ has realised that the less he tinkers with his portfolios, the better they perform; he’s going to enjoy some ‘me’ time and let the high quality stocks he has selected do the heavy lifting.
After a really difficult start to 2018 with pretty much the first 3 months being a steady slide, it is really nice to have a huge about turn and April has been much more pleasant for me and from a negative situation for 2018 so far of perhaps as much as 4% down at the worst point, at the time of typing this on Friday 17th May my portfolio is now up 3% and things just feel a whole lot nicer!
One rather strange aspect to this year for me has been the performance of my ‘do nothing’ Income Portfolio which is up a pretty amazing 8% since the start of the year and as I just implied, I have done almost nothing to it in the last 4 months apart from selling out of my Sainsburys (SBRY) position because I have never really been happy with the Argos deal and the latest efforts to buy Asda tipped me over the edge to dumping it.
If you check out my website you should find a page dedicated to my portfolios and the Income Portfolio appears right at the top. For ages it has had just 12 Holdings but I intend to perhaps nudge this up to 15
as a maximum but I am in no great panic to do this. Having sold SBRY I am currently down to 11 but I have some candidates in my mind to replace it and add to the diversification.
I do find it remarkable (and more than a little ironic!) that the portfolio which I completely ignore is up 8% whereas the ‘normal’ portfolio I have where I am always up to something or other is only up 3% - it really does make me wonder why I bother sometimes! Of course in reality this is a bit of a fluke and the Income Portfolio has been helped by holding a few stocks which have done really well as the markets overall have been soggy.
THE PORTFOLIO WHICH I COMPLETELY IGNORE IS UP 8%.... WHEREAS THE ‘NORMAL’ PORTFOLIO IS ONLY UP 3%
Particular winners have been Royal Dutch Shell (RDSB) which has made new all time highs even today and stocks like Astrazeneca (AZN) and Royal Mail (RMG) (had results today and got spanked after a really strong run up) have been very strong in 2018.
ALL THE TINKERING AND MUCKING ABOUT MANY OF US DO IS REALLY JUST A WASTE OF EFFORT
The real philosophy behind the Income Portfolio is that it is about capturing a chunky and rising dividend which is blended across the portfolio at about 5% and then with a couple of percent of capital gain and it should deliver 7% or so per year on average with minimal maintenance and lower risk than my ‘normal’ investing activities.
I have been running it for about 4 years now and so far it has certainly lived up to my expectations and if 2018 carries on in this vein then it will be well in excess of what I am after this year.
Having sold SBRY this gives me a bit of a ‘problem’ though - my Income Portfolio is probably about 16% in cash now and I really need to deploy that into another stock and get the dosh working for me.
I am extremely selective when it comes to any of my holdings but for the Income Portfolio I need something that should be low maintenance, give a dividend of perhaps 4% as a minimum and be something where the dividend is likely to steadily grow over time with me not having to worry about it and with perhaps the odd chance to buy more now and again.
Of course, as well as these factors it must also ‘fit’ in with the rest of the portfolio so that is an important consideration.
DIY Investor Magazine | Jun 2018 8