At the time of my last update in March I offered some thoughts on my income investment strategy and came to a decision that my individual shares portfolio was probably the weakest link. I decided therefore to reduce my reliance on this sector and I have started to sell down some of my shares portfolio. As I get older I appear to be losing a little of my appetite for all the work involved, all the time and effort it takes to research shares and run the portfolio is just not worth it.
Five shares were sold and the proceeds of £8,875 reinvested in Vanguard UK Income fund. In April, I disposed of Diageo and Charles Stanley and acquired City Merchants Trust.
As I said in my previous post, I did/do not intend to sell off the entire holding of shares - just start to remove some of the more volatile performers and try to improve my overall income by switching out of some of the lower yielding shares. However, as someone pointed out in a recent comment, as the shares portfolio is reduced in number, it increases the exposure/risk/volatility of the remaining shares - something of a dilema to ponder.
One reason for the change of strategy was the share price volatility but another, perhaps more significant aspect of the review has been a shift from an assumption that the focus needed to be on natural yield to embracing a low-cost total return focus with the option to siphon off growth and/or income via a sale of part of my investment. This has opened up many more opportunities.
For example, I have been taking a closer look at the Vanguard LifeStrategy funds and decided these would make an excellent addition to my portfolio under the revised regime. In May, I sold off a further 3 shares and reinvested the proceeds into Vanguard LifeStratrategy 60.
More recently I have disposed of AIM-listed Plastics Capital which breached my stop-loss limit and IG Group which has had a good run returning ~30% since purchasing just 8 months previously, but which I have found very volatile in the past.
|(click to enlarge)|
|untinkered portfolio from 2013|