Shaking up the Portfolio and learning to count.

Following on from the “When to sell a stock” post, funnily enough, I have been on a mad selling spree in my actively managed portfolio!

This all started after I was playing around and working out the CAGR for a number of my stocks, when I realised something didn’t feel quite right with the overall picture of my portfolio. I redid the numbers and realised that when I had originally setup my annual tracker, I must either have been VERY tired, or rather very tipsy.

Being an idiot.

My calculations for my percentage returns actually divided my increase in value by my final ending figure, rather than the initial figure plus contributions! Whilst it is annoying that I made such a basic mathematical error, the plus side is that I made the error in my favour – I under reported. I have gone back and corrected last years figures – the tracking of the FTSE etc. was all calculated correctly (which is why no-one shouted I guess!) so only a couple of minor errors on the actual portfolios where I had copied and pasted the errors where I had added sheets. A valuable lesson learnt. To save you from the hassle of scrolling through however, the bottom line was that my actively managed performance was not the reported 30.9% as I claimed, but was in fact a staggering 44.7%.

Yup – taking my starting value and contributions, my returns added a further 44.7% to my portfolio. This was partly what made me sell off some of my shares to drive my balance back towards more into trackers – there are some huge shifts in values in there which could easily go wrong again (just look at AZN today – that hurt!).

I plan to use all the funds that I have raised from the sales, the dividends I have received since my last investment and put that all into a single tracker to help slowly rebalance my portfolio. The sooner I can rebalance, the sooner I can start buying individual shares again within my tolerances ๐Ÿ™‚

Number Crunching

So, what has been sold, and what were the returns? Please note that the returns include the cost of fees (so book cost includes all transactional fees (dividend reinvestment, dealing charges, stamp duty etc.), and the end value was calculated on what I got credited to my account after the sale (i.e. after paying dealing charges).

Dividends reinvested in the same security were not added to the total value, but dividends not reinvested (i.e. cash thrown off that I spent on something else, was). I also calculated the return for the FTSE-100 over that period (although excluding dividends, so we will have to assume approximately 3%) to provide a comparison. It’s been pretty steady over the years, and for the last 3 yearsย the FTSE-100 over that period was 4.6% (or 7.6% if you add dividends).

Sale Item #1

First to bite the bullet – HSBC. I’ve held the shares for 3 years now since I first bought them, and they have been a good steady performer. I will miss the quarterly dividends which have been steadily ticking up over the years. I sold out at just over ยฃ7.50 per share, which over the 3 years gave a CAGR of 24.2%. Not at all bad – I will chalk that as a win!

Sale Item #2

Next to go was MIDD. I was going to use this as my tracker of choice for mid-caps, but when Monevator recently posted on the charges, I realised I was paying 0.4% but could pick a Vanguard fund for 0.1% – I decided to switch, no two ways about it! I originally purchased the morning the Brexit result came through when there was panic on the streets. I sold out at just ยฃ19 per share, giving me a CAGR of 23.1% over the year. I can live with that!

Sale Item #3

Next up was MRW. This was purchased about 3 years ago as I looked at the underlying business and the usual arguments on the ownership of their stores etc. but with the ongoing grocery wars, Amazon entering the fray I have decided not to wait for my number to come up, but cash in while I am ahead. I sold out at just over ยฃ2.40 giving me a CAGR of 14.5%. Not anything great there but still not too bad – certainly beats a savings account!

Sale Item #4

Lastly, I sold in myย BLT that I purchased a couple of years ago. I cashed out at just over ยฃ13.60 per share. I’ve been contemplating cashing in as the price does fluctuate a lot, but thought why the heck not. A total CAGR of 25.9% over 2 years so not really too shabby.

Now what?

The outcome of all of this is that I now have a fairly large chunk of cash to deploy into the market. As I am planning on buying trackers, and I shouldn’t be trying to time the market, I know I now need to purchase my required trackers within the next couple of weeks, so watch this space!

 

 

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Author: fireinlondon

Fighting the high cost of living in London

12 thoughts on “Shaking up the Portfolio and learning to count.”

  1. Haha, get you on a spending spree! And yes, AZN today – ouch!

    At least you spotted your calculation error now, rather than say in 10 years’ time but great that it was in your favour anyway.

    I’ve made one sale myself this month which I’ll update on my next post but am already eyeing up switching a couple of my funds into ETFs – need to do some more research first.

    Which trackers will you be using your spare cash on?

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    1. Hi Weenie,

      I know – how bad was that, both the spending spree and AZN lol! Well it will bounce up again over time and the dividends help so I am not too worried ๐Ÿ™‚

      Yes – can’t believe I made such a basic error, but at the end of the day none of this alters the total amount in my various pots so does it really matter? I have coffee right now, that’s what is important ๐Ÿ™‚

      Ah look forward to see what you are cashing in and then going to purchase…. as for my next purchase, well I wouldn’t want to lose a blog post for posting in a reply ๐Ÿ˜‰ It will happen in the next month but I have a few I am thinking of.

      Cheers,
      FiL

      Liked by 1 person

  2. Ciao FIL,
    I have had a similar incident this year, right after Christmas, when I realized that I made all my taxes calculations in a wrong way and also my options gains were all wrong… One week of programming later I sorted it out but of course the damage (partly) was done already… ๐Ÿ˜› Oh well, learning comes from mistakes so the good part is that I managed to find it in time and not 10 years down the line… As to the sales, I have been quite still on the UK front of my portfolio, I have added SSE (dividend too tempting and I have lost already IRV and CLLN this year….), but not nothing much more. Keeping my eyes on RMG, but did not pull the trigger yet…
    Ciao and compliments for the gains that you’ve got on those sales!
    Stalflare

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    1. Ciao Stalflare,

      Hopefully I have this right… Grazie per essere caduto di nuovo?

      Ouch – that sounds really painful especially if it is related to taxes, that is never a good one! As you say at least it is now sorted and it isn’t 10 years down the line!

      I have to say SSE has been good to me so I don’t blame you for tucking into that one – although I am contemplating selling my RMG but as I bought it as part of the government sell-off then it isn’t large enough to really worry about!

      Cheers,
      FiL

      Like

      1. Ciao FIL,
        We need to work on the Italian but I appreciate the effort!! ๐Ÿ™‚ (the phrase up there actually means “thanks for having fallen again”, while I believe that you wanted to say something more on the lines of “thanks for dropping by again” which would be “grazie per essere tornato di nuovo”)
        As to the investments, I am a DGI investor at heart, so SSE and RMG are two companies that are FAR from exciting but that for a reason or another have been paying stable dividends. I am not sure on RMG yet, there are positives and negatives from what I see, a huge issue is the pension deficit, a huge driver is the growth that they seem to be having thanks to GLS… At the moment I am playing it with options, we’ll see where we get to…
        Ciao ciao and keep posting, I am curious on where you are going to dish out the funds that you got from the recent sales!
        Stal

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        1. Ciao Stal,

          Yes indeed – my Italian is not particularly good – I need to find a better dictionary ๐Ÿ™‚ Yes – it was meant to be the dropping by as you say, so – Grazie per essere tornato di nuovo. My deduction is that caduto = fallen?

          A good solid, rising dividend is great – as I am drafting today’s post I looked back to see where I expect to see this years income and I am already ahead of last year, and expect to be up by 10% which will be very nice.. *IF* that happens, however with all the changes going on it may not, and the trackers will actually reduce my income, but provide me more stability.

          Don’t worry I intend to keep the posts coming, and still trying to get up to twice a week (can I do more?!) – and yes, all will be revealed in the next couple of months!
          Arrivederci (possibly not quite the right use…?),
          FiL

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        2. Yes actually drop=cadere, the colloquial usage is not translated of course, that’s the issue with the dictionary! ๐Ÿ™‚ I am still unsure about adding ETFs to my portfolio, but I did add CTY to my UK portfolio, so in a way I am taking little steps towards funds I guess. Will look forward to the posts then! I need to work on my monthly update this weekend! Ciao ciao and yes “arrivederci” is correct, although if you want to be more “colloquial/easygoing” “ciao” is what you want to use!
          Stal

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  3. Ciao Stal,

    From a pyschological point of view I have found the ETFs are great – I buy and really do forget but I think ITs will do better over the long term, hence I have SMT and CTY in there amongst others!

    Thanks for the Italian lessons, I will stick with Ciao then!

    Good luck with the update and look forward to see how you have done!

    Ciao,
    FiL

    Like

    1. I’ll look into SMT, seems an interesting trust, very international in terms of asset allocation (and thanks to the weak pound it might have sense to buy into it)… ITs are forms of investment that here in Italy we do not really have, there are a couple but they are not all that enticing…
      ciao ciao
      Stal

      Like

      1. It’s a very popular trust, although quite expensive at the minute (although I guess with the weaker pound for you it isn’t too bad!). I am a big fan of IT’s as I think they are good for long term steady growth, and they have done me well!
        Ciao,
        FiL

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        1. Seems interesting but I need to do more research… Dividend payout is quite small, this is a bit of a turn down, lots of IT companies, not only UK (which can be good)… Let’s see I am adding to the watchlist… ๐Ÿ˜›

          Like

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