Rate my portfolio?

Hello all, can you just tell me how diversified my portfolio is and how good you think it is. I’ve tried to build a long term stable money getter. Percentage is the percentage of my portfolio that stock makes up.
23rd June 10:30AM
£60 Invested
ITV = £18.27 (17 Shares) 30.4%
MUFC = £13.86 (1 Share) 23.1%
RBS = £10.77 (5 Shares) 17.9%
3i infrastructure = £5.82 (2 Shares) 9.7%
Sirius minerals = £5.03 (36 Shares) 8.4%
RI = £3.81 (3 Shares) 6.4%
AO = £0.82 (1 Share) 1.4%
NSF = £0.37 (1 Share) 0.6%
Cash = £1.34 2.2%
Value of holdings = £60.08 (+0.08p)

3 Likes

You’re heavily weighted in UK equities, so not much diversification. This is also know has Home Country Bias - we tend to purchase stocks of companies we know and purchase their products. So if the UK were to go into a recession due to economic uncertainties, you would be fully exposed to this.

You may want to include some exposure to US and Emerging Markets equities and possibly Money Market Funds to reduce this risk and increase diversification.

2 Likes

Can you give me some examples of money market funds and explain what they are?

Diversity by company is good. However, I wouldn’t put more than 10% into a single company, this is probably quite hard to do with a small portfolio but I would have between 10-30 different companies, so try to build up to that. Also consider ETFs for mass diversification and definitely look at investing some into bonds via Freetrade’s bond ETFs for long term stability even though yields are low.

I would also diversify geographically, you are heavy on UK stocks (100% actually). Consider the impact of UK recession, no deal Brexit, etc…

Finally, you need to diversify by market cap. I think the largest company in your portfolio is RBS ($33b). You have waaaaay too many stocks under $5b market cap which are not considered blue chip stocks. Larger companies are safer long term investments.

1 Like

Why are you buying these rather than a wide ranging ETF like VWRL? Especially if you seem not confident in your selection

I wonder if there’s a psychological consideration with buying index trackers (I mean generally for investors, not for @Theopaphitis specifically): maybe at some level you don’t feel like you’re doing “proper” investing.

2 Likes

Absolutely yes, which is why most people don’t do it. It’s also the reason I like Jim Cramer’s idea of 'mad money’s - 10% of your portfolio in individual companies, 90% in trackers

4 Likes

Short-term (less than 1yr) Treasury Bills, e.g. VMMXX - Vanguard Prime MMF

Is there any money mutual funds on freetrade?

Yeah I’m 95% trackers, 4% stock picking, 1% risky business. And I tell myself that the 5% makes it easier to be disciplined about the 95%, though I suspect it’s the opposite.

If you’re after a “long term stable money getter”, forget picking individual stocks. Here, you’ve invested in 8 companies. If you put your money in an index tracker such as £VWRL, you’d be invested into over 3,200 companies around the world.

Admittedly, 1 share of VWRL is currently ~£68, but you could also look at MSCI World (it has a slightly higher OCF though).

As @RebelAllocator has said, too much UK. Also, due to the portfolio size, you are involuntarily weighted to three shares. When fractional shares come along, you can avoid this.

And I suspect your MANU share was not chosen by analysing their financial performance.

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Hello, I chose MAN u because it’s a US stock and I think the dollar will go up. And because they seem to always earn a lot of revenue because of the Glazers ownership and running of the club, And also the fact the terrible Europe league performance this year which I believe they will be able to improve on some point in the future. I’m an arsenal fan BTW.

1 Like

Here we go, please feel free to rate as negatively as you wish:

SSE
BP
Shell
Glencore
AT&T
Severn Trent
GSK
Man Group
Rio Tinto
HSBC

All at 10%

This portfolio designed to maximise compounding dividend return plus hopefully capital growth.

I would add small and mid caps or if you’re into dividend growth investing, find companies that are consistently increasing their dividends every year. Then figure out its worth to avoid overpaying for it.

Here is a great site to find dividend champions.

http://dividendchampions.uk/

Example 1: Reckitt Benckiser

Example 2: Diageo

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Thanks, and looks a great site :slight_smile:

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AT&T looks great value. Elliott Managment have snatched up 5% here is a letter to management at AT&T.

Edit: Only criticisms is you’re quite heavy in energy/oil and the UK geographically. Not a hippy on the oil bit just mean for diversification purposes

Any thoughts welcomed on my side portfolio which is more, shall we say, speculative:

Slack
Legal & General
Persimmon
Direct Line
Barclays
Lloyds
Match
Starbucks
Disney
United Utilities
Kaz Minerals
Bunzl
WPP
Wier
WPP
Vodafone
BAT
Telecom plus
BT
Hammerson
LandSec
Jupiter
City of London IT
Diageo
Pennon
Standard Life
ABF

All equal at 3.7%

Is there a ‘reasoning’ behind your portfolio? As in high dividend return or high capital growth?

Apart from Abbvie it looks like a solid grower and almost a who’s who of huge companies. Genuinely surprised to not see Apple and Amazon on there to be fair Jamie.