My Personal Actively Managed ISA

So I am used to being asked by some of my friends who know I enjoy “stocks and shares” about recommendations and thoughts, as well as bouncing ideas off each other. I continue to shout my disclaimer that I am not involved in the Financial Services, I am not a Financial Advisor, and you should always Do Your Own Research. I do however enjoy bouncing the ideas around but there you go!

Right, enough on the disclaimers, onto the meaty stuff! When I first started out doing this I had no clue and no rules or target allocation or what my portfolio should look like. I started it firstly as a bit of fun, and secondly, looking at all the funds they all seemed to contain the same top 10 stocks. Why pay them for holding them when I could hold them myself?!

I had no idea about ETF’s, no idea about Bond / Stock allocation, risk tolerance (although I am willing to take on what they class as “aggressive” – so over the top risk I am happy with as you will see from some of my stock selection!).

So what does trigger me to purchase? There are a few key things that will trigger me to buy:

  1. Too much cash sitting in my ISA Trading account. Once I get to a set amount I will start looking for something that seems good value and buy it – I just can’t help myself!
  2. Bad News. This really is a high risk and should certainly not be recommended for most people, however its worked well for me so far on average, but please do remember this can be a VERY easy way to lose money (I did on Northern Rock)

On the bad news side of things, my desire is to hang on to some cash so I can take advantage of it, but it doesn’t always work (I didn’t have any when the Costa Concordia sank, or I would have bought Carnival then). I did ok out of RB when Bart Becht stepped down. I bought in, held for a month or so and sold out with a 10% profit (post fees). In retrospect I should have held longer and I would have been even better off, but this comes down to me being happy with that profit. As with my caveat above, I have also lost money – Northern Rock the biggest that made me lose my entire holding there!

If I am really deeply honest, I don’t have a fixed rule even now. I am trying to get more structure into it, especially as its grown to a reasonable size now (I’m not yet an ISA millionaire sadly). So my latest thinking, that will no doubt change over time, is:

  • 30% in ETF / Trackers
  • 30% in Investment Trusts
  • 30% in “Self Select Shares Portfolio”
  • 10% in “High Risk” – AIM shares or other random things that grab my attention 🙂

At present I am some way off this – I am heavily overweight in “Self Select” and “High Risk”, however I don’t want to sell these, so I will simply look to increase other holdings to get to the above target. I do however firmly believe that this will reduce my overall performance in this ISA, but should also reduce my overall volatility.

I will be doing a number of posts on what I have bought over the years, and I will update my Portfolio page to cover what is in as I unveil the portfolio, and add to it.

The portfolio itself probably won’t change very much over the coming years, as from the new tax year all my subscriptions will be going into another provider to spread the risk, so it will only be reinvested dividends.

I would add that this really isn’t a great way for most people to invest – if I knew then what I know now would I do anything different? Probably. Why only probably? Like many, I love to dabble and try and pick out good investments – however its also good to have a stable base which I do think the Trackers help provide. This means you can have a steady tick in of income to help build the base, and reduce the impact of potential dividend cuts on the overall portfolio whilst still having your fun. So have your cake and eat it…

What about you – do you have a set allocation that you track and stick to? Or do you like to dabble?

Advertisements

Author: fireinlondon

Fighting the high cost of living in London

5 thoughts on “My Personal Actively Managed ISA”

  1. Hey FiL

    A quick look at my portfolio shows the following:

    75% – ETF/Trackers
    15% – Investment Trusts/Shares
    7% – Premium Bonds/Cash
    3% – P2P

    Thanks for making me look at my allocations – I had in my mind that I was going to channel more into my ITs/Shares but didn’t actually realise how much more was needed to balance things out! I can see what I need to concentrate on next year.

    I fancy a bit of a dabble too but only up to 2% of my portfolio – I’m obviously not as much of a risk taker as you are and also, less likely to know what I’m doing! 🙂

    Like

    1. Hi Weenie,

      I think most people wouldnt be too worried with your allocation above – trackers seem to be the go to for most people, but I do have a soft spot for IT’s as for me they are my go to instead of bonds as bonds are just too expensive. Because they can keep back some good years income to pay the bad years they generally dont do too badly!

      I dont count the cash position as thats just emergency fund and I would rather have as much of my money work for me as possible, but thats a very personal choice!

      If it helps, I didnt really know what I was doing hence my first few buys lost a fair whack of money – fortunately I only started off with a few hundred pounds each time, since then I have learnt what to look for and generally seems to work out ok, but again its a personal choice 🙂
      FiL

      Like

  2. Hi Fireinlondon

    In terms of overall networth, the way I do it is that I keep Cash pot and Investment portfolio separate and I only track my Investment portfolio held entirely in S&S ISA. Cash pot is for emergency cash fund with at least 1 years outgoings worth. I build up cash savings in the cash pot over the year and then pop it into my S&S ISA yearly.

    From the massive amount of online knowledge I absorbed, I picture an investment pyramid with cash in current accounts, fixed deposits then as you go up, bonds, gilts, P2P, broad based index trackers, Investment trusts, gold, commodities, individual shares, art, collectibles. I am building from bottom up. I think it gives me a chance to study the intricacies of value investing and individual share investing before I reach that level and decide if I should ‘dabble’.

    Do you track your returns? I am trying to track mine by unitisation of my portfolio as per Monevator (very clever those chaps). Would be interesting to see a post on your annualised return. Also do check out the Savings and Investment subforum on MoneySavingExpert. There are quite a few good examples or debates to bounce off ideas…

    Nice meeting you on the night out last week!

    -Fireplanter

    Liked by 1 person

    1. Hi FIREplanter,

      I am with you on keeping the emergency cash and ISA stuff separate – I dont include it in any of my personal view on when I can retire!

      Definitely a very sensible way of building up slowly – ultimately the trackers are the easiest and least overhead way of doing it. In terms of art and collectables I would never include these in total networth – they are not particularly liquid. Nice to have I am sure, but not something that you can ever really sell quickly, but thats my opinion 🙂

      I do indeed track my returns, but only on the overall portfolio, however the TD platform has added in the new feature to allow me to track my own. And thanks for the tip on the MSE subforum, I will have to go and check it out!

      I normally do my returns at the tax year end, but given the interest I may do an interim for the last 12 months calendar year, I will see how time goes before I go back to work!

      Great to meet you as well, and looking forward to the next!

      Cheers,

      FiL

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s