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.
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.
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.