The Long Road To ISA Millionaires

Honest reporting on shorter-term trading activity and ideas
will89
Posts: 22
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » January 6th, 2017, 11:23 am

Just as a quick 2016 summary, the unit value of our investments was 9.94 at the end of 2015, and 11.40 at the end of 2016, so an improvement of around 14.5%, which I'm very happy with. We hit a useful milestone in December, which was a live value of £10k overall profit including dividends, which was nice.

Capital value over the year rose by 105% due to the unit value growth and substantial top-ups. Unit value as as of today stands at 11.75.

I keep a master spreadsheet with all of the data, and one of the tabs I maintain shows snapshots at the end of each quarter. Reassuringly, our portfolio has beaten the market in 9 of the last 10 quarters, some being close, but the only 'loser' being the Brexit quarter of April-June 16.

The three 'areas' of our portfolio are now roughly aligned how I want them to be. Value/Small Cap accounts for 30%, HYP/Income accounts for 39%, and Investment Trusts account for 30%. Plans for this year include adding a couple of new HYP shares, continuing to monitor for value opportunities, and topping up ITs where appropriate.
I very much get the feeling that the first two years of investing have been about learning the fundamentals (first investment was 02/15), but I now feel comfortable and settled with a strategy and portfolio setup that works well for us personally, so can now focus on returns and maximising opportunities rather than refining and tweaking strategy.

will89
Posts: 22
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » January 6th, 2017, 12:26 pm

Following on from the post above, our current holdings are shown below. Apologies as I managed to cut off the column headers but they are EPIC, Name, Running P/L% inc. Divis, % of total portfolio.

You will note that I am overweight in a couple of Small Caps, but I'm comfortable with that for now as they're my highest conviction picks and over time they can be top-sliced or, with new money being added making up a relatively high % of the total portfolio value, their weighting will naturally come down. Any comments are very welcome.

Image

will89
Posts: 22
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » January 6th, 2017, 1:01 pm

Image

Apologies, as I was adding this chart I noticed one of my comments above is incorrect. We have in fact beaten the FT100 in 8 of the 10 previous quarters, not 9 as mentioned above, the 2 losses were Oct-Dec15 (-3.5%) and Apr-Jun16 (ouch -7.7%).

I know the results aren't world-beating, but for a first couple of years investing I feel content that I have been able to learn and mould my own strategy (and risk/diversification appetite) into something that works well for me and will hopefully now start to show good results, which is a nice feeling to have. 2017 here I come!

will89
Posts: 22
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » January 6th, 2017, 3:15 pm

Just as a quick addition, I received a PM from a reader regarding benchmarking, and the fact the FT100/350etc perhaps aren't the best for my portfolio, which I agree wholeheartedly with. My reply is below:

I really feel like I need to compare to some other benchmarks, as you said an equal-weighted FTSE would be a good start, I think I would also like to use a world tracker too, but I just haven't had the time to go back and unitise them yet to match up with the portfolio.
Until recently I ran the tracking of the 2 portfolios separately, with the HYP element being stored in a separate spreadsheet, which is why the benchmarks were FTSE-related. In December I decided to migrate everything into one single tracking spreadsheet, I just haven't adjusted the benchmarks to match the newly blended portfolio, thanks for the tip.

will89
Posts: 22
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » January 16th, 2017, 9:40 am

Topped up some Somero last week after seeing the trading update.

Shelford
Posts: 6
Joined: November 4th, 2016, 11:43 am

Re: The Long Road To ISA Millionaires

Postby Shelford » January 17th, 2017, 10:05 am

Good question about benchmark.

What is an appropriate stick to beat ourselves with?

For my HYP, I compare annual performance with FTSE all share (on basis that if I'm not beating that, it's time to pack my bags and put everything into trackers...) and also IUKD, which is an ETF that tries to emulate HYP strategy with about 50 or so higher yielding UK shares. See https://www.ishares.com/uk/individual/e ... -ucits-etf.

Again, if you can't beat that on a regular basis (with presumably lower ongoing charges etc as you hold your shares direct) with your HYP, it begs questions about the point of doing the exercise ourselves.

PrincessB
Posts: 46
Joined: November 10th, 2016, 3:26 pm

Re: The Long Road To ISA Millionaires

Postby PrincessB » January 17th, 2017, 3:05 pm

Good question about benchmark.

What is an appropriate stick to beat ourselves with?


I feel there is a lot of answer from the simple question.

From memory HYP#1 has returned about 11% per year since inception - Whether some of the other HYP portfolios have returned a similar level and whether the completely out of balance HYP#1 should have some remedial tinkering are questions for the HYP board.

My mindset is that you should be able to return around 10% over a reasonable timescale while doing practically no research, trading or worrying about swings in the markets.

I also understand that some well known fund type managers, Warren Buffet or Woodford have managed somewhere close to 20% per year. The difference being that they do this full time and get to meet people and have staff and researchers and the like.

I know we can find examples of folk who have used high gearing to generate spectacular returns but my view is that all the work one does, all of the reading, pouring over company reports and spreadsheets and charts and tipsheets is likely to improve your returns by up to 10% over the baseline HYP.

I for one would love to be a HYPer - Part of my strategy is to gently steer in that direction and I for one would love to have a £1 million valued HYP, unfortunately there is no conceivable way a 10% return is going to get me to that point in an acceptable timespan so higher returns are required and that means work.

In many respects, ones early days of working out how the stock market works with a minimally sized portfolio have a lot in common with an internship. You do a mountain of work and even with a spectacular return rate you're barely rewarded for your effort. That does change over time, but I can understand the temptation in the early days to go for that high risk/high reward stuff - Usually a mistake as those I've known who tried this have gotten wiped out and vow never to return. A shame really but a clear case of running before you can walk.

As I've mentioned before, I've given up on tracking returns by percentage, I calculate total portfolio value once, on New Years Day and in the meantime I buy stuff I like and sell stuff which looks a bit toppy and if I can't find anything that grows, I'll buy yield.

I can recommend this strategy as it certainly stops me from worrying whether I'm making the grade and if I'm not reaching target getting silly and going beyond my own comfortable risk profile. I can buy enough silly stuff without the extra incentive of trying to meet a target.

Regards,

B.

StepOne
Posts: 49
Joined: November 4th, 2016, 9:17 am

Re: The Long Road To ISA Millionaires

Postby StepOne » January 17th, 2017, 3:32 pm

PrincessB wrote:
I for one would love to be a HYPer - Part of my strategy is to gently steer in that direction and I for one would love to have a £1 million valued HYP, unfortunately there is no conceivable way a 10% return is going to get me to that point in an acceptable timespan so higher returns are required and that means work.


Similar thinking to me, except that I've discovered that all the extra work I put in did not result in improved returns, so I have scrapped any thoughts of getting to 1 million pounds, and just decided to build my hyp.

StepOne

moorfield
Lemon Pip
Posts: 62
Joined: November 7th, 2016, 1:56 pm

Re: The Long Road To ISA Millionaires

Postby moorfield » January 17th, 2017, 3:52 pm

PrincessB wrote: so I have scrapped any thoughts of getting to 1 million pounds, and just decided to build my hyp.


Indeed 1 million pounds might not be quite what we expected when we all eventually get there ...

https://www.youtube.com/watch?v=jTmXHvGZiSY

:lol:


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