Income Portfolio (Low Risk)
I run this Portfolio as a low effort, low risk, high dividend collection of stocks where the focus is on a Blended Dividend Yield of 5%. I hold this within an iWeb ISA and the intention is to add my Full ISA Allowance every year and spread across the holdings in an appropriate split. I am careful to diversify across Sectors and expect to rarely sell anything unless it gets very overvalued on a p/e basis or if the Company runs into Severe Difficulties. I look for companies that have a solid record of raising the Dividend Payment every year and where I expect this to continue. I intend to only hold 12 stocks in total, but might up this to 15 over the longer term (this would increase Diversification and hence lower Risk). At present I reinvest the Dividends received (I do not use an automatic or DRIP Reinvestment option - to my mind these are daft) and my plan is to grow the Portfolio so that in about 10 years time when I am well on the way to my State Retirement Age, I can draw on the Dividends as Cash to live on - things are just easier this way - at present I sometimes have to sell stocks to get cash so I can eat - this is not good as it means I could be a 'Forced Seller' and selling at a bad time.
Unit Trusts (Medium to High Risk - high Market Correlation)
I have a small collection of Unit Trusts which are really a Legacy from my earliest disastrous forays into the Markets back in 1999. I have made good strides in recent years to reduce these and have recently sold out of a Japan Fund as the stark reality is that I just do not understand (and therefore cannot assess value) the Japanese Economy - the Debt levels are insane and the recent rally in Nikkei and Topix Indexes enabled me to get out with a nice pot of cash.
As a rule, I am not a fan of Unit Trusts and prefer Investment Trusts and ETFs (I will do a detailed description of these and advantages / disadvantages in the future on this website), however, the big advantage they do have is that they are very hard to sell - I mean it is a pain having to phone up and such nonsense and you need to take a positive action to ditch them.....sometimes we need to be protected from our own stupidity !! For that reason, they have not been Top of My 'To Do' list......
I also have about 10% of my Total Wealth in a Prudential With Profits Bond - these have had a bad press as they are often linked to Endowment Policies but mine is Standalone and not linked to a Mortgage and I reckon it has returned about 4% a year on average. It is pretty resilient in Tough Times and has some Tax Advantages. Like with Unit Trusts, it is quite a hassle to actually sell units and get cash out - sometimes we benefit from being protected from our own Stupidity !!!
Trading ISA Portfolio (High Risk relative to my Income Portfolio and Unit Trusts)
This is where most of my money sits and is the Portfolio where most attention is focused - when I do daily Tweets with my % gain or loss on the day, this is the Portfolio I am referring to (although this also includes my Spreadbet positions). On the majority of these stocks I hold normal shares and a Spreadbet position as well - although in practice there are a few where I only hold Spreadbets - and on some smaller stocks it is impossible to do Spreadbets so I have bought larger amounts of normal shares. Some stocks I hold also in my Income Portfolio.
Relative to my Income Portfolio and my Unit Trusts, this is High Risk, however, I am not a gambler and compared to many Private Investor's Portfolios this is probably less risky. This is especially so when position sizes are Risk Weighted as per my Blog "Position Sizing Part2" from 29th October 2014.
The Letter in Brackets after each Stock gives an idea of the weighting according to the following Key - I have decided that doing % weighting for each is too hard an admin task as it varies anyway from day to day particularly if I Topslice and Topup:
From time to time I will amend these weightings and mark in Bold where there is a change.
Overall I am happy with the stocks I hold and currently have 42. As you can see, I hold a lot of stocks and it is a focus going forward to keep this down to 40 (the 'WD40') in my Trading ISA - holding too may stocks can mean I am just running a Closet Tracker Fund !! Having said that, I am already having trouble Buying and Selling smaller Positions so it would be almost impossible for me to be more concentrated anyway.
Please note that in my 'Trading ISA' and Spreadbet Account, I also have some Stocks that appear in my Income Portfolio as well - I am essentially increasing my weighting to them.
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