Stockbroker's delight

[andyalan10]

In last year's portfolio (viewtopic.php?f=56&t=9414&p=108670#p108670) I wrote:-

"OK so this is going to be something of a stream of consciousness post as we are already a week into the new year, and I feel that market moves and the passage of time make my thoughts on 2017 less accurate/relevant so here goes."

Change 2017 to 2018 and that much hasn't changed at all.

The situation has changed, I am currently not working, with a new venture planned for the spring that will provide around a third of income needs, so going into partial drawdown.

My Portfolio - Two thirds in company DC pensions, one third self managed in a HYPish manner in SIPP and ISAs. Although there is also a small dormant DB pension and a mortgage free house as well.

This year I have made significant changes to the DC pension holdings, which have been neglected for far too long. I'd left them alone as the previous combination felt reasonably diverse. However I have now consolidated down from 7 company pensions to 3 and revisited the funds. In doing so I've lowered some of the fees charged, and explicitly selected 5 funds, equally weighted, They are US, Europe, UK smaller companies, Pacific and Property. That turned out to be well timed as my total US exposure went from around 40% to 20% just before the recent sell off.

Some people commented, probably with justification, on my high turnover last year. Well it went up, not down. In fact in preparing this review I discovered it doubled, hence the thread title.

31 holdings, 33 trades in 2018, 14 sales, 19 purchases. Why? Most of the cash pile at the start of the year has been spent. One of three brokerage accounts has been closed, some shares it contained have been sold and not replaced, some sold and re-bought elsewhere.

Against the FTSE-100 my capital value has underperformed by about 4%, worse than last year, and a source of some disappointment.

I like to write a "what went well and what went badly" in my portfolio review. I started by writing "Sainsbury's disposed of in two tranches on positive reactions to news, the second tranche at 340 on the ASDA story". Then wondered what I did with the cash? I put it into Superdry, then off 40% YTD when Sainsbury were +40%. From there to year end SDRY lost another 59% to be my stand out worst performer. I also sold Drax, bought back in 18% lower and resold on a gain of 34%. "What brilliance" I hear you say. They went on to end the year another 14% higher. "What brilliance?" I reply.

So in fact I think my two best achievements were to simply hold GSK, +13% on the year, and to buy Micro Focus (MCRO). Another purchase on a special situation/negative reaction to news flow, so sometimes it works.

My biggest failing - still holding Soco (SIA), although oil has turned in the right direction again, maybe 2019 is the year.

My historical yield at year end was around 6.4%.

I have increased the historical dividends on the portfolio by about 19%, through a mixture of running down a cash pile (maybe accounts for 40% of the rise), re-investing dividends (30%), generous dividend rises from RIO and IMB particularly (10%), and by top slicing or selling low yielders and purchasing/topping up high yielding shares (20%).

The percentages above are guesstimates

Looking forwards there are pre-announced large dividend rises from BARC, EZJ and IMB, which will hopefully balance the cut from Stobart, and the danger of cuts from Vodafone and the utilities.

For 2019 I have a lot of restructuring still to do. I will likely become non-UK resident some time this year. So I want to take the 25% lump sum from the SIPP and the DC pension schemes, some to re-invest and some to live on. The sell decisions will be a chance to reshape the portfolio rather than top slice everything.

Thank you if you've read this far. As ever I find writing down what I've done and why is a revealing exercise. Also thanks to those others who have given us an insight into their 2018 performance.

Andy

I'll follow this with a portfolio breakdown, probably tomorrow.

Andy