My Portfolio: Dividends and Diversification


#1

Here’s a list of the investments I’ve made so far:

So far I’ve put £6045 in to the app but I’m down to £5837. As I said in a post a few days ago, I’m not happy at all with my diversification. I’ve got money in two different UK Dividend funds, plus VMID which is a third. In an attempt to fix this I’m going to purchase 100x shares of VHYL, 100x shares of HMCH since the Chinese stock market has absolutely tanked, and bring my total number of IDVY shares to 100x. Buying these three particular stocks should give me a lot more diversification in the short-term and value in the long-term. As a new investor, and this being my first ever activity in the Stock Market, I’m just looking to set up a solid foundation to build on.

I was going to buy NEX as I’ve read nothing but good things about this company. The dividend return is good and rising, profits are up, they look solid going forward, but I hesitate to invest in another UK company until my portfolio is more diversified. Plus, ETFs offer instant diversification and NEX is an individual company so that’s in my thoughts as well. In the absence of a watchlist I’ve been picking up a few shares just to keep an eye on them so that’s why those are sitting there.

I’ve got Christmas to pay for now so this will be the last of my activity for 2018. At the start of next year I’ll look to further diversify my portfolio by purchasing IUSA and MSCI World. I’d hope the price comes up on the UK Dividend funds as I may get out of one, or even both, and just stick with VMID for the long term.

In the long term I think I’ll try and get 10 stocks, buy 100x shares of each, and once happy with their diversification just increase my holdings over time. As I continue to put money in I hope dividend payouts start to kick in and I can really get that compound interest going.


#2

Giving advice is alway risky, but I would advise not to focus on which companies to buy but rather what your strategy is and then pick companies/etf/etc that match that strategy.

If your goal is simply to accumulate a global portfolio over the years then 1 or 2 etf may be all you need, if your strategy is to mix bonds and equities then again companies/etf and so on that meet that - I persoanally think once you become fixated on a company it can lead you down the wrong path (but that is just my opinion).


(Vladislav Kozub) #3

May I ask what the rationale behind considering stocks in number of shares is? Did you not contemplate about allocating a certain percentage of the entire portfolio to stocks and then a certain percentage of that proportion to each of the ten companies or just 1/10 to each?

Seems like if you were to go for Barclays and British American Tobacco, one of the latter would cost as much as twenty of the former, this causing a huge proportionate disparity. But if you ever consider BRK.A, I’d be rather happy for you :grin:


#4

I want a diverse portfolio that pays of a good dividends. You’re right, in that it probably could’ve been achieved with one or two good ETFs. But, once the 100x VHYL is there the bulk of the cash (about £8k) will be in VHYL, VMID, and STHS which I’m happy with. I certainly need to rethink the rest of it and rebalance. The two UK Dividend ETFs need to go, forget about NEX, but I’d like to finish IDVY as that’s a solid dividend performer. Maybe I’ll go with 100x shares of those 4 ETFs for now and have a think before pressing ahead.


#5

Having exactly 100 shares caters to my OCD. One of the first things I requested on this forum was the ability to buy an exact number of shares as opposed to a £ amount for this very reason. I totally understand the point about allocating a percentage of cash as opposed to buying quantities of shares but for my own sanity I’m sticking with the later. When fractional shares are introduced I’ll probably go in to meltdown.


#6

So thought I would update this thread after some change this week:

At this point I’ve put in £10,145. My portfolio has a value of £10,074. I have £6 reserved for a share in IWDG that will be picked up tomorrow. I also have just over £20 left in my account to spend moving forward.

The price of IUKD bounced back up to what I originally paid for it so I took that opportunity to sell. I also sold off the few shares in NEX that I had.

I purchased 100x shared of VHYL. I also tried to buy 100x shares in IWDG but one didn’t go through so I’ll pick that up tomorrow. I think this rebalancing has given my portfolio a lot more diversification and I should get a good dividend return from it.

I have some IDVY right now and I’m going to take that up to 100x shares in the next few weeks. I’m also going to buy some HMCH because there’s huge scope for growth there.

So overall much happier now than when I made my original post.