The Embryonic Portfolio…

The Beginning

I know all the general rules about a diversified portfolio but working with a relatively small sum of capital to begin with, I took the position that I would prefer not to spread myself thin over a dozen shares. I felt that the prices of the four individual shares (at the time), their characteristics and future prospects, all lent themselves favourably to focusing my embryonic portfolio on this core group. This idea of “concentration” might turn out to be an error but I still have the chance to bank some profit on any of the two bigger holdings (if there is a large downswing) and then diversify to potential targets amongst my watchlist. In effect I have done this by having a stop-loss for each of these (except Ruspetro) which I have move upward periodically as they have increased gain to insure against a major erosion of capital. In the case of Legal and General this concentration of my portfolio (34%) worked heavily in my favour with a 96% increase in value since purchase and a few rounds of dividends.

Incidentally I have represented each share as a purchase price, and a % change; nothing specific with numbers as I want to share my journey, not share my financial situation.

Positions held on April 15th 2014;  All shares purchased between May 2011 – Apr 2014

Share Current Price Purchase Price % Change
    Average Price Paid (pence)  
Booker 145.80 67.49 +116.18
Legal and General Sold 236.43 (2014) 93.30 +153.40
Barclays Sold 272.13 (2014) 184.99 +47.10
Tesco Sold 330.89 (2014) 312.36 +5.93
Ruspetro* 17.91 96.11 -81.36
Beazley 251.70  239.39  +5.14
Monitise 57.31 37.15 +54.27
Lloyds 70.96 83.37 -14.88
Actual Holdings £ Percentage Gain

(calculated using costs, dividends etc.)

  April 2012   +21.45%
April 2013   +26.10%
April 2014   +32.41%

*speculative share purchase (see blog post on stop-loss)

2012-13 commentary. As mentioned elsewhere Ruspetro was a speculative purchase in my view, and I have averaged down (perhaps stupidly) to a paper loss of 34% at time of writing.  I know I probably should cut my losses here; but I am loath to take that loss at the moment as it represents only a small percentage of my capital deployed in the portfolio, and I still hold (albeit little) hope of clawing back more of my initial capital.

2014 commentary. After having started the year with the intention of adding to the portfolio rapidly, I added Beazley (BEZ:LN) and Monitise (MON:LN) however since then I have had to sell a percentage of the portfolio for home improvements. So out have gone Legal & General (LGEN:LN) Barclays (BARC:LN) and Tesco (TSCO:LN). With the prospect of having to purchase a new car this year as well. My stock market ambitions are likely to be limited to one or two further additions this year maximum.

Author can be contacted:

Please read the blog Legal Disclaimer.


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