Tuesday 1 September 2015

Shares Portfolio - Sales & New Purchase

In March I started to put into place my revised strategy in relation to my individual shares portfolio.

Having come to the conclusion that my individual shares have been the weakest link of my income strategy to-date, I have been in the process of gradually winding down the shares portfolio and redirecting investment proceeds towards my investment trusts, ETFs and also to embrace the possibility of more low cost globally diversified index funds such as Vanguard LifeStrategy.

So far this year I have sold the following shares - Imperial Tobacco, Hargreaves Lansdown, DS Smith, Sage Group, Diageo, Nicholls, Charles Stanley, Centrica, Reckitt & Benckiser, Sainsbury, Plastic Capital and IG Group.

Many were sold at the high point of the market earlier in the year and, with the exception of Plastic Capital, all had made significant gains both year to-date and also in relation to cost of purchase.

Recent Sales

Earlier in August - luckily just before the market downturn, I took the opportunity to sell three further holdings.

First of all GlaxoSmithKline - the company recently announced they intend to hold the dividend at 80p for the coming 3 years. The capital value is just about the same as in 2012. I decided I had a sufficient holding in my UK-focussed investment trusts such as Edinburgh, City of London etc - sale price 1420p.

Secondly my holding in easyJet was sold @ 1730p - the share price has been a tad too volatile for my liking.

Finally, after a decent run in recent months, I decided to take profits in Booker Group having received the final dividend and also a further return of capital. The sale price was 178p.


The net proceeds of £5,260 have been transferred to my new ISA account with Halifax Share Dealing. Fortunately the market ‘correction’ came whilst the funds were in transit between accounts. The proceeds have now been reinvested in a further 40.43 units in Vanguard LS60 which takes the total holding to 96.13 units.

These are accumulation units and therefore no income is distributed. My plan is to sell off some of the units each year to provide ‘income’.

The shares portfolio is now looking quite different to the one at the start of 2015. The remaining shares consist of BHP Billiton, Next, Unilever, Tesco, Sky, IMI, Amec Foster, Legal & General and Berkeley Group.

I am thinking that, as and when there are further disposals, it will not really be a shares portfolio any longer. Therefore, from the start of 2016 I will possibly amalgamate this portfolio with my collectives portfolio. There is already some overlap with the Vanguard Equity Income funds and LifeStrategy funds.

Good Enough

I have held my individual shares portfolio for many years - I think a part of me wanted to play the fund manager thinking I could generate a better return than the professionals. I am happy to conclude that Mr Market is too efficient for my efforts to bear fruit.

I am slowly learning to be comfortable with ‘good enough’. I’m now more globally diversified - not perfect but for now - good enough. I am edging slowly away from the rollercoaster of individual shares and entering the relative calm waters of the 60/40 Lifestrategy option. Over the coming decade, I am thinking of a steady 5% or 6% return on average (after inflation) - that will do for me.

When people ask how my portfolio is doing… you know the answer!!

Take it easy.


  1. I like that slow and steady approach. I have a really similar way with my SIPP... But I do still love individual stocks, so am continuing to buy shares on a monthly basis in my NISA.


    1. M,

      Good to hear from you - how are those shares in Sainsbury doing?

      I have held shares for quite some time..well 1989 when I acquired some Abbey national shares following the demutualisation. They are a very cost effective way of running a portfolio and obviously you are comfortable with their price volatility.

      Good luck with your SIPP building and here's to the slow & steady approach!

  2. While I'm slowing buying up individual shares, I find it interesting to read about you shedding your shares and putting them into a Vanguard Lifestrategy fund. At some point, I feel that I will do the same as you but perhaps towards the end of my FI journey. I added to my BLT shares last month to take advantage of a low (but not lowest) price. Good to see that Berkley Group are now in the FTSE 100 - wonder what sort of difference (if any) that will make!

    Interesting to see that one of the

    1. weenie,

      Yes, I imagine we are at different stages of the investing journey - you are accumulating whilst I am consolidating and preserving. I am also taking steps to simplify my portfolio and it seems to me one of the easiest ways to achieve this would be to exchange 25 individual shares for just a single, low cost diversified fund - hence the LifeStrategy option.

      Have Berkeley been promoted - I had not heard the news? If so it should boost the share price as it will need to be purchased for all the FTSE 100 index trackers.

      I hope you are enjoying your cider - always reminds me of the 70s song by the Worzels..ooh arrr!

  3. Interesting that you are moving away from individual stocks towards collective investments, ETFs and such-like. As you mention, there is a temptation to believe that one can play at being a fund manager, but unless one has the resources to research companies as intensively as they do, it would seem to me that one would have to be at a disadvantage.

    By using investment funds, you are taking a judgement on the ability of a fund manager, of course (and they get it wrong at times, of course). So using ETFs to track an index may be the 'purest' approach. You will automatically gain diversification if the ETF tracks some market index, which would help neutralise stock-specific risk as well, so the variability of your returns should be less.

    If concentrating on ETFs that follow market indices, your effort could then be focussed on market timing or macro economic issues. So you could (for example) decide that one sector is over-valued and other cheap etc. You can also extend this to questions about different countries stock markets, or whether the stock-market is over-valued as a whole. Although the market can take a long time to correct.

    You mention the performance of your portfolio. How are you assessing that? Here I am thinking that it is not just about return, but also about the risk you take. For example with a small number of stocks, you could do really well, but could also make big losses, and you might find high variability. By using ETFs for example, you presumably have your money well spread among many stocks. This should help limit the size of losses (although also potentially limiting gains), so you could argue that it helps reduce your risk.