Current Value (As at 4th September 2017) = £154,107 including cash
Target for 31st December 2017 = £170,000 (was £153,000)
Value at commencement of this blog on 1st August 2012 = £51,684.02.
Monthly contributions since commencement of blog = 36mths @ £300 plus 24 months @ £750 = £28,800
Capital Growth = £154,107 less (£51,684.02 + £28,800) = £73,623+

Tuesday, 5 September 2017

Portfolio Review 5th September 2017

BAE Systems PLC (BA.)
This companies SP (share price) has been consistently growing since September 2015 when the SP was under 450.  In mid-June this year the SP peaked at 675. By mid-July the SP had dropped below the 50-day MA (moving average) and had I noted that, then I would have been on the alert to sell off before (or just as) the SP dropped below the 200-day MA - which is what happened on 20th July whe the SP was at 612. The recent weakness seems to have "bottomed" at 575 which the SP closed at on 8th August. If I had sold at 612 on 20th July, then I would not be looking to move back into the company until the SP closed above the 200-day MA, which is currently at about 618. I'm not sure why the SP has been weak recently as the company has a massive forward order book and, with the current issues in the World, it would seem to me that demand for the company products will increase, and with it will increase the company profits. I remain a holder.

Blackrock Smaller Companies IT (BRSC)
I acquired the majority of the shares held between March 2015 and October 2016.  Unfortunately, when I "re-balanced" the SIPP Portfolio in January this year, I sold off 221 shares at an SP of 1000.80 which (in hindsight) with the SP now at 1245 (and having hit a year high of 1265) was a bit silly. The SP is currently at a discount of 13.70% to the NAV (Net Asset Value), and that discount is slightly better than the average discount of 15.14% for the past 12 months. I'd like the discount to narrow, but that is unlikely to happen, as the discount has only been below 12% on a couple of occasions this year, and has been as large at 20%. When I started building the stake in this company, it was to represent 10% of the total value of the portfolio, but with the holding valued at £14,700 it is a bit light and (again) in hindsight I should not have sold those shares in January. I remain a holder and (probably) a buyer when funds become available to return it to 10% of the portfolio value.

When I bought shares in G4S in the early summer of 2016 it was as a recovery play. My initial purchase on 10th May '16 was 620 @ 194, and my next purchase was another 345 @ 173: all-in-all 965 shares at an average price of 190. I continued to buy throughout the recovery, with my final purchase on 9th August this year of 352 shares @ 313. That purchase was possibly one too many, as before the ink was dry the SP dropped to under 300 and then on the 31st August (last week) dropping below the 200-day MA of 283. The SP is still in the 284-286 range and my dilemma is which way is the SP going to go next? The recent scandals in the domestic market are not good for the image of the company, but the fundamentals are sound. Revenue is growing, and so are profits, and the dividend is being maintained. Their work may be under scrutiny, but by far the majority of the workforce do a great job. I remain a holder and will likely increase the holding if the SP drops below 270.

Glaxosmithkline PLC (GSK)
This company has been a part of my SIPP portfolio since August 2014 (3 years), and - to be honest - I don't know why I continue to hold it. I sold a large portion of the holding in July 2016 when the SP was at 1660, and right now I wish I hold sold the lot. The SP has topped 1700 four-times since July 2016, the most recent occasion being on 23-26th June this year, but the SP has also dropped below 1550 on four-times in the same period, the most recent being when it hit a low of 1480 on the 21st August. The SP looks almost impossible to predict, but when the SP dropped below the 200-day MA of 1610 on 21st July that was a bad sign and I really should have sold then. Right now, I don't think the SP will drop below 1500 and if it closes above the current 200-day MA of 1519 in next week or so and shows some strength then I will hold and set a target price of 1650 at which to sell out.  If it wasn't for the dividends I would have moved-on from this company a long time ago.

GVC Holdings PLC (GVC)
On of the success stories of the SIPP.  Yes, GVC is involved in the gambling industry.  I bought my entire holding (bar reinvestment of dividends) in 2015 at an average SP of 450. I wish I had kept on buying as on 1st December 2015, the SP hit a low of 372.  Apart from a period of weakness between Oct'16 and Feb'17 when the SP slipped from 760 to 610, the company has remained on track and very profitable. Revenue is growing very quickly and all broker forecasts suggest an SP of between 875-1000 is possible within the next 6 months. Very much a hold, and I would be very surprised if we ever see an SP below 700 again.

Lancashire Holdings PLC (LRE)
I bought 1000 shares in LRE in Jan-Feb 2015 at an average SP of 623, and the increases in the holding to 1209 shares today have been made through the reinvestment of dividends. It is disappointing that the current SP of 665 is so far below the year-high of 775, but then the SP does swing considerably during the year.  The company can make enormous profits, and there have been large special dividends paid in each of the past 5 years. The devastating hurricane in Texas this summer will have had an effect on the SP, and the company increased its "disaster" insurance with exposure to hurricanes this year.  So, the depressed SP is almost certainly due to this increased exposure.  However, LRE is one of only 3 specialist "Lloyds" insurers listed on the London Stock Exchange and it would be no surprise to see a bid if the SP stays at this level (below 670) for much longer.

Legal & General Group PLC (LGEN)
I purchased most of my holding in July-August 2016 at prices under 206, so the strength of the SP in the past 12 months - reaching a year-high of 279 on 9th August - has been very welcome. The 200-day MA is at 254.50 so the SP (which has retreated recently) is very close to that. Given the very buoyant half-year results which reported a 27% increase in profits, I can't understand the recent weakness in the SP and I'd expect the strength to return during the autumn. Again, this remains a hold.

Paysafe Group PLC (PAYS)
The bid finally came but, at 590p per share, it wasn't as generous as expected. I've trimmed my holding by 1000 shares to use the proceeds elsewhere and await either conclusion of the bid process or a potential new bidder arriving on the scene.

Sage Group PLC (SGE)
Although I'm sitting on a small profit with most of my holding bought at around 650 earlier this year, I'm not expecting major movements in the SP. Sage looks a slow-burner, and therefore remains a hold.

Segro PLC (SGRO)
I love this company. Even since I became involved way back in August 2014 (3 years ago) with the SP at 356 this company has done nothing wrong. The market, however, makes up its own mind - and this is why you should form your own opinion and follow it. I decided to buy up to 410, and my last purchase was at 407 in July 2015 - and I have had plenty of opportunities to increase my holding since then, but I've invested elsewhere. I don't think having multi-holdings is a good idea, as this is the concept of risk mitigation - and if you mitigate your risk, you limit your opportunity. This company remains a very strong hold, especially in this age of Brexit and in the knowledge that Segro has a virtual stranglehold on storage space around Heathrow Airport. Imports will become very important soon - I will leave it at that...

Senior PLC (SNR)
A recent addition to the portfolio in April this year at an ave price of 207 - I bought into this company as it is involved in aerospace and defence and I thought it was oversold at below 200 after hitting a high of 354 in April 2015. I admit I was heavily influenced in my purchase by the Investors Chronicle and I haven't looked back. I doubt there is much further growth in the SP above 300, and it may be that I'm about to sell out and move on.

XBT Provider (XBT-BIT)
I am sure anyone reading this will have a "Marmite" feeling. With crypto-currency you either love it or hate it - you will not be sitting on the fence. I think - sorry that's wrong, I know (as far as my knowledge will allow) - that crypto-currency will completely revolutionise the entire economic make-up of the modern world. I am not saying that "traditional" currencies will cease to exist - they won't.  The entire world will not - it cannot - be modernised. I think (it's just my opinion as I will be long dead and gone before it's realised) that the "modern" world and the introduction of artificial intelligence will see a resurgence in "traditional" ways of life. How will it be financed? Society will reject the current situation that has dominant companies: Google, Apple, Amazon, Facebook, etc making enormous profits, and then just sitting on the money as the amounts are just too huge for individual companies to manage. Taxation of corporations and the use of "universal credit" will see people move away from stressful, computer-screen based jobs, to occupations that require hands-on skills and will form a new leisure industry.
How will crypto-currency benefit? Before we get there, banking as we know it will break-down, because the banking model doesn't work in the modern world, it is too slow and expensive. It's not just me saying this, there is a lot of information on the internet but, like when the horse-less carriage was introduced (the motor-car to you and me) change takes time to be accepted.  
I've bought 800 units in XBT-BIT which is equivalent to 4 Bitcoin. I think that bitcoin will eventually be the basis of all international currency transactions (unless something else comes along which is better), and the cost savings use of bitcoin (and the like) will allow for the increased taxation of profits and the instigation of universal credit that will transform society. Bitcoin is currently valued at between US$4000 - US$5000 but I can see this value increasing 10-fold within 2 or 3 years as knowledge and acceptance occurs. It really would not surprise me to see Bitcoin attain values of over US$500,000 per coin within my lifetime - assuming that I live another 20 years or so.   As such, it should be no surprise that I intend to hold on to by Bitcoin.

Monday, 4 September 2017

Holdings 4th September 2017

The current holdings (as of today 4th September 2017) are:
1) BAE (BA.) : 1115 shares valued @ £ 6,746 (UP £184 from £6,562)
2) BlackRock Smaller Co IT (BRSC) : 1181 shares valued @ £14,632 (UP £354 from £14,278)
3) G4S (GFS) : 2410 shares valued @ £6,873 (UP £90 from £6,783)
4) GlaxoSmithKline (GSK) : 396 shares valued @ £6,001 (UP £16 from £5,985)
5) GVC Holdings (GVC) : 1031 shares valued @ £8,160 (UP £47 from £8,113)
6) HG Capital Trust (HGT) : 220 shares valued @ £3,742 (UP £22 from £3,720)
7) ICG Enterprise Trust (ICGT) : 730 shares valued @ £5,431
8) JPMorgan Emerging Markets (JMG): 625 shares valued @ £5,325 (UP £204 from £5,121)
9) Lancashire Holdings (LRE) : 1209 shares valued @ £8,227 (down £623 from £8,850)
10) Legal & General (LGEN): 2860 shares valued @ £7,384
11) Pacific Assets (PAC) : 1931 shares valued @ £4,866 (down £63 from £4,929)
12) Paysafe (PAYS) : 6000 shares valued @ £34,950
13) Sage Group (SGE): 931 shares valued @ £6,428 (UP £93 from £6,335)
14) Schroder Asia-Pacific (SDP) : 1252 shares valued @ £5,471 (UP £69 from £5,402)
15) Segro (SGRO) : 1607 shares valued @ £8,670 (UP £65 from £8,605)
16) Senior (SNR) : 1574 shares valued @ £4,312 (UP £200 from £4,112)
17) XBT Provider (BIT-XBT): 800 units valued @ £13,499 (UP £5,012 from £8,487)
Cash @ £3.390 (was £669)
SIPP Value = £154,107 (UP £4,597)

The main increase has been in Bitcoin with my holding (200 units is equivalent to 1 Bitcoin) increasing in value by 59% and this is over 10% below the peak value.  Bitcoin is the future of financial transactions.  This will be an anathema to many who are professionals in the banking world, but the onslaught of crypto-currency cannot be halted. It may come as a bit of a surprise to many traditional investors to learn that with the sabre-rattling missile firing of North Korea last week, while stock markets wobbled, Bitcoin rose to a record high of almost US$5,000 per bitcoin. The price has slipped since Saturday 2nd September to just over US$4,300 as I write this, but I cannot see it dropping more than 30% below that all-time high. Where will it end up?  I can see Bitcoin hitting US$10,000+ before the end of 2018.

Friday, 4 August 2017

PAYS recommends accepting offer

The current holdings (as of today 4th August) are:
1) BAE (BA.) : 1115 shares valued @ £ 6,562 (down £258 from £6,820)
2) BlackRock Smaller Co IT (BRSC) : 1181 shares valued @ £14,278 (UP £283 from £13,995)
3) G4S (GFS) : 2058 shares valued @ £6,783 (down £187 from £6,970)
4) GlaxoSmithKline (GSK) : 393 shares valued @ £5,985 (down £410 from £6,395)
5) GVC Holdings (GVC) : 1031 shares valued @ £8,113 (UP £168 from£7,945)
6) HG Capital Trust (HGT) : 220 shares valued @ £3,720 (UP £50 from £3,670)
7) ICG Enterprise Trust (ICGT) : 470 shares valued @ £3,492 (UP £59 from £3,433)
8) JPMorgan Emerging Markets (JMG): 625 shares valued @ £5,121 (down £9 from £5,130)
9) Lancashire Holdings (LRE) : 1209 shares valued @ £8,850 (UP £180 from £8,670)
10) Legal & General (LGEN): 2489 shares valued @ £6,767 (UP £187 from £6,580)
11) Pacific Assets (PAC) : 1931 shares valued @ £4,929 (UP £9 from £4,920)
12) Paysafe (PAYS) : 7000 shares valued @ £41,300 (UP 490 from £40,810)
13) Sage Group (SGE): 931 shares valued @ £6,335 (down £85 from £6,420)
14) Schroder Asia-Pacific (SDP) : 1252 shares valued @ £5,402 (UP £56 from £5,346)
15) Segro (SGRO) : 1607 shares valued @ £8,605 (UP £417 from £8,188)
16) Senior (SNR) : 1574 shares valued @ £4,112 (UP £325 from £3,787)

Shareholdings total = £140,359 (UP £1,280 from £139,079)
17) XBT Provider (BIT-XBT): 798 units valued @ £8,487 (UP £329 from £8,158)
Cash @ £669
SIPP Value = £148,846 (UP £1,609 from £147,237)

In early July, I decided to sell-off my holding in Imperial Brands Group (IMB) at 3422-pence (recouping £5,842) and - in hindsight - that looks a good call.

I’ve invested the proceeds of that sale in crypto-currency Bitcoin (BTC) via XBT-Provider tracker fund (BIT-XBT).  I’ve accumulated 798 units in the fund at the equivalent of approx. US$2,455 per BTC. The value of BTC has remained between $2,700 - $2,800 this past week, and the expectation is that if the value can crack US$2,800 then there is likely to be a strong surge of pent-up support that will push the price to over US$4,000.

The news today is that the Paysafe board of directors have accepted (and recommended to shareholders) the US$3.70bn, 590-pence a share, offer from Blackstone and CVC Capital Partners. Now that we have a formal bid on the table if there is an alternative offer being prepared then we will see it soon. I was hoping that the 590-pence offer would be rejected by the board of directors, but I suppose the CEO Joel Leonoff wants to see a return for the efforts he has put in building this company up, and he holds nearly 10 million shares worth about £57 million – a nice “retirement” fund!

My problem – when the sale goes through – is that I will have to find somewhere to invest the proceeds. The Paysafe holding represents 27.50% of the total value of the SIPP and even if I rebalance with a minimum of 5% of value with each holding, then I’m still going to have a fair percentage in cash.

Friday, 21 July 2017

Super Friday

The current holdings (as of today 4th July) are:
1) BAE (BA.) : 1115 shares valued @ £6,820
2) BlackRock Smaller Co IT (BRSC) : 1181 shares valued @ £13,995
3) G4S (GFS) : 2058 shares valued @ £6,970
4) GlaxoSmithKline (GSK) : 393 shares valued @ £6,395
5) GVC Holdings (GVC) : 1031 shares valued @ £7,945
6) HG Capital Trust (HGT) : 220 shares valued @ £3,670
7) ICG Enterprise Trust (ICGT) : 470 shares valued @ £3,433
10) JPMorgan Emerging Markets (JMG): 625 shares valued @ £5,130
11) Lancashire Holdings (LRE) : 1209 shares valued @ £8,670
12) Legal & General (LGEN): 2489 shares valued @ £6,580
13) Pacific Assets (PAC) : 1931 shares valued @ £4,920
14) Paysafe (PAYS) : 7000 shares valued @ £40,810
15) Sage Group (SGE): 931 shares valued @ £6,420
16) Schroder Asia-Pacific (SDP) : 1252 shares valued @ £5,346
17) Segro (SGRO) : 1607 shares valued @ £8,188
18) Senior (SNR) : 1574 shares valued @ £3,787

Shareholdings total = £139,079
19) XBT Provider (BIT-XBT) : 798 units valued @ £8,158
Cash @ £669
SIPP Value = £147,906

When I wrote my last blog on 4th July, it was with the news that Worldpay had received and offer (which was successful) and that Paysafe (PAYS) would fit the bill as a follow-up target.  Here we are, not 3 weeks later, and Paysafe is the subject of a US$3.70bn, 590-pence a share, offer from Blackstone and CVC Capital Partners.

I’m hoping that the 590-pence offer will be rejected by the board of directors as insufficient as, in my opinion, PAYS is worth a lot more than that. I’d be more comfortable with a bid that values PAYS at about US$8bn (which would be 800-pence a share). Apparently, Blackstone & CVC first approached PAYS in May but that initial offer was rejected – since then the PAYS board of directors has received 4 offers! This could be interesting.

In another major development since early July, I’ve decided to sell-off my holding in Imperial Brands Group (IMB) at 3422-pence, recouping £5,842.  Since investing £6,500 into the shares in March at an average of 3840-pence, the SP of this company has done nothing but go down.  There has been a flat-line of the SP through July, but the outlook is difficult to understand. There is a bid expected from Japan Tobacco International (JTI) – however, as the SP of that company has also been in retreat in 2017, any bid may be a long time coming.

I’ve taken the proceeds of that sale and bought the crypto-currency Bitcoin (BTC) via XBT-Provider tracker fund (BIT-XBT). This week, I’ve invested £7,540 into Bitcoin as that represents approximately 5% of the value of the SIPP. Approximately 200 units of BIT-XBT buys one Bitcoin, and I have accumulated 798 units. So, I’m in at a £1,890 per BTC (approx. US$2,455 per BTC).  The price of Bitcoin fluctuated a fair bit this week, from a low of US$1,863 to a high of US$2,940. As I write, the price is at US$2,740 and as more and more “legitimacy” is given to BTC (this week the London Stock Exchange started accepting BTC) in my opinion those negative fluctuations will reduce, and a long-term positive outlook will dominate.  It would not surprise me to see BTC trading at over US$4,000 before the end of 2017.

Tuesday, 4 July 2017

Worldpay bid, and the onset of Crypto-coin

A change in direction this week on the SIPP, and it could lead to a significant future investment strategy. First though, early today there was strong speculation (later confirmed) of a bid for the Worldpay Group by the US-based payment processing and technology provider Vantiv Inc and JPMorgan Chase Bank. The SP is up over 20% this morning from Monday’s close of 320 to 390 as I write this (noon on Tuesday 4th July). That a major bank is starting to take the internet payment processing system seriously enough to put together a bid for Worldpay is extremely significant. To me it signals that banks (some of them at least) are beginning to come to the conclusion that the internet (combined with other technology such as smart-phones and pads) is bringing an end to the banking industry as we know it.   

For my SIPP, there has been some strengthening of the SP of PAYS (up 9 to 515) and I can see that should the Worldpay bid prove successful, and Worldpay is swallowed-up and removed from the FTSE100, then we could see other banks looking to find their own similar target.  PAYS would fit that bill well and, at only 35% of the Market Value of Worldpay, would be a very cheap option. Not that I’d expect a bid at 515-520 for PAYS to be successful, we can look forward to a significant premium on that SP should a bid occur.

I've long been of the opinion that banks as we know them are coming to the end of their shelf-life and a new form of finance-house will take their place. It will mean "adapt or die" for the major banks, and it looks like JPMorgan Chase is the first bank to take that step to protecting and preserving their future.  Hopefully, my strong position in PAYS which forms 25% of my SIPP value will see that opinion bear fruit.  However, I have been growing in awareness over the past 12-months of another financial development that is undermining the foundations of the banking industry - crytocoin.

The major "player" of crypto coins is Bitcoin which currently have a total market value of US$43bn which is approximately 40% of the total value of cryto coins in circulation.  Yes, cryto coins have a total market value in-excess of US$100bn (see coinmarketcap).
There was recently an article on the Crypto Coin phenomena published in the Investors Chronicle and I expect we will see more written about crypto coin in the next 6 months as the banking industry starts to get it's head around just what the future does (or rather, doesn't) hold for their businesses. The big advantage of something like Bitcoin is that international financial transactions using bitcoin "side-step" the need to pay commission and fees to the banks - and banks make considerable profits from the movement of currencies in business around the World. That profit is in serious danger of being lost to the banks, unless the banks do something about it - and that (in my opinion) can only be by taking a serious interest in the cryto coin market.
With much of my funds tied-up in the SIPP, in order to take advantage of cryto coin I've bought some units in the XBT-Provider tracker fund (BIT-XBT) which trades in "notes" which tracks the movement in the Bitcoin currency. My intention is to build-up a position equivalent to 5% of the value of the SIPP over the next 6 months, and my initial purchase is £1,250 worth of units.      
The current holdings (as of today 4th July) are:
1) BAE (BA.) : 1115 shares @ 654
2) BlackRock Smaller Co IT (BRSC) : 1170 shares @ 1175
3) G4S (GFS) : 2058 shares @ 341
4) GlaxoSmithKline (GSK) : 393 shares @ 1710
5) GVC Holdings (GVC) : 1031 shares @ 775
6) HG Capital Trust (HGT) : 220 shares @ 1680
7) ICG Enterprise Trust (ICGT) : 470 shares @ 743
8) Imperial Brands (IMB) : 170 shares @ 3454
9) JPMorgan Emerging Markets (JMG): 625 shares @ 791
10) Lancashire Holdings (LRE) : 1209 shares @ 705
11) Legal & General (LGEN): 2489 shares @ 262
12) Pacific Assets (PAC) : 1912 shares @ 246
13) Paysafe (PAYS) : 7000 shares @ 515
14) Sage Group (SGE): 931 shares @ 678
15) Schroder Asia-Pacific (SDP) : 1252 shares @ 409
16) Segro (SGRO) : 1607 shares @ 487
17) Senior (SNR) : 1574 shares @ 235
18) XBT Provider (BIT-XBT) : 129 units @ 986.82

Cash @ £531

SIPP Value = £140,140

Thursday, 22 June 2017

Some changes to the SIPP Portfolio

There have been a few changes this week. I decided to take advantage of the share price of Paysafe (PAYS) breaking through 500, and sold-off 1000 shares @ 518 resulting in £5,170 available for new purchases.
I have recently become aware that Private Enterprise IT's have been doing well and, together with the fact that some 50% of the corporate wealth of the UK is tied-up in private equity - that is companies that are NOT quoted on the Stock Markets - that has made me look to diversify into Private Equity funds. The 2 that I've chosen are:-
HG Capital Trust (HGT) and I've bought 220 shares @ 1604
ICG Enterprise Trust (ICGT) and I've bought 470 shares @ 748

The current holdings (as of today 22nd June) are:
1) BAE (BA.) : 1115 shares @ 660
2) BlackRock Smaller Co IT (BRSC) : 1170 shares @ 1195
3) G4S (GFS) : 2058 shares @ 333
4) GlaxoSmithKline (GSK) : 393 shares @ 1714
5) GVC Holdings (GVC) : 1031 shares @ 786
6) Imperial Brands (IMB) : 170 shares @ 3579
7) JPMorgan Emerging Markets (JMG): 625 shares @ 806
8) Lancashire Holdings (LRE) : 1209 shares @ 709
9) Legal & General (LGEN): 2489 shares @ 256
10) Pacific Assets (PAC) : 1912 shares @ 259
11) Paysafe (PAYS) : 7000 shares @ 516
12) Sage Group (SGE): 931 shares @ 712
13) Schroder Asia-Pacific (SDP) : 1252 shares @ 419
14) Segro (SGRO) : 1607 shares @ 493
15) Senior (SNR) : 1574 shares @ 237
16) HG Capital Trust (HGT) : 220 @ 1625
17) ICG Enterprise Trust (ICGT) : 470 @ 747

Cash @ £1,683

SIPP Value = £142,500

Considering the SIPP value on 1st November 2016 was £112,631.16 and since then I have only made a further 8 contributions @ £750 totalling £6,000 the SIPP has made startling progress. My target for the end of the year is £153,000 and (with luck) that should be met - and the SIPP could top £150,000 by my 58th birthday on 8th November.

Wednesday, 14 June 2017

Dividend reinvestments on 14th of June 2017

Dividend reinvestments on 14th June were:-
BA. - 20 shares at a cost of £134.38
LGEN - 93 shares at a cost of £246.18
GFS - 35 shares at a cost of £116.84
SNR - 14 shares at a cost of £34.41
GVC - 14 shares at a cost of £110.05
SGE - 6 shares at a cost of £42.24
Total dividends reinvested = £684.10

Here are my top 5 investment ideas for you to consider.
1) Start your portfolio early
The earlier you start investing, the more time you have to compound your gains into a substantial sum. If you start investing early, the more likely it is you will accumulate a large share portfolio. Also, when you start investing early (say in your mid to late 20's) as you will initially be investing relatively small values, any major mistakes will be limited in value. This time you spend investing (before you start earning at your peak) will be educational and invaluable for when your pension fund is at it's largest.

2) Save continuously to invest
Be careful with your expenditure. Try not to be profligate, and spend large amounts only on useful items. That way you can save the money not spent and invest it in your portfolio.
What I do is empty my bank account into my savings account on the day before I collect my salary cheque, and live on my monthly salary. That means (home made) sandwiches and re-heated leftovers for lunch; making my own ground-coffee at work rather than paying £2.50 per cup from the nearest coffee-shop; buying good quality and practical clothing (especially for the winter months). Consider finding a "look" for yourself, and building a smaller wardrobe around it.

3) Choose the investment method suitable for you - and stick with it
There are inumerable investment books on the market, but the one factor that keeps being repeated is finding great companies and holding-on to them - for years if necessary.
Great companies start small, so don't be afraid of investing in a small company if it is a strong business. Great companies also maintain their position by being well-run and profitable over long periods, so don't be afraid of investing in a great company even if it has been the market leader for 30 years - it may continue to be the market leader for another 30 years!

4) Put your money where your mouth is
When you find an investment opportunity that looks too good to be true, then back your judgement.
I try and keep my portfolio below 15 shareholdings as, when you own more than this, management becomes increasingly difficult. As such, I don't think you should have less than 5% of your portfolio value in a shareholding - and you should be prepared to invest over 20% of the value of your portfolio in a single shareholding.
Put your money where your mouth is - be bold.

5) Use every investment opportunity available
I own the house I live in - and I also own a property that I rent out.
I have a SIPP (Self Invested Pension Plan) - and I also invest the maximum annual allowance into an ISA.  Having a "rainy-day fund" is a good idea, but keep it realistic at no more than a maximum of a months earnings. If you want to own an expensive watch, buy a "vintage" watch at an auction. It will cost a fraction of the new price and, if you need to sell, you know that you will get back what you have paid

Monday, 12 June 2017

Post-election thoughts on the SIPP

 The current holdings are:
1) BAE (BA.) : 1095 shares @ 665
2) BlackRock Smaller Co IT (BRSC) : 1170 shares @ 1100 (was 1248.00)
3) G4S (GFS) : 2023 shares @ 331.00
4) GlaxoSmithKline (GSK) : 393 shares @ 1690.00
5) GVC Holdings (GVC) : 1017 shares @ 770.50 (was 812.00)
6) Imperial Brands (IMB) : 170 shares @ 3595.50 (was 3680.50)
7) JPMorgan Emerging Markets (JMG): 625 shares @ 800.00
8) Lancashire Holdings (LRE) : 1209 shares @ 690.00 
9) Legal & General (LGEN): 2396 shares @ 257.00
10) Pacific Assets (PAC) : 1912 shares @ 258.50
11) Paysafe (PAYS) : 8000 shares @ 498.50
12) Sage Group (SGE): 925 shares @ 680.00 (was 713.50)
13) Schroder Asia-Pacific (SDP) : 1252 shares @ 414.00
14) Segro (SGRO) : 1607 shares @ 498.00
15) Senior (SNR) : 1560 shares @ 236.60
Cash @ £4,148
SIPP Value = £139,750

Overall, the SIPP has performed well following the General Election result, but there have been a few valuation reductions; notably with the UK Smaller Company IT (BRSC).  The only other significant correct is that of GVC which is down to 770.50 from 812.00 (which is about 5%). Through the election week, it became apparent to me that the market was looking fairly resilient and that was the case come Friday morning when the result was known.
Overall, the SIPP has still gained over £4,000 in value (there was a £750 contribution last week), which is another 3% and that cannot be sniffed at.

I have to give myself a bit of a pat on the back as when the election was called back in April, my post on 18th April did suggest that the decision by Theresa May to hold an election was audacious and would be either declared brave or stupid depending on the result. My prediction then was it would be a Labour-led coalition government - so I was correct in predicting a "hung" parliament, and missed-out on being absolutely spot-on with my prediction by just a few seats.  If Labour had won just another 2 seats from the Conservatives then the current "alliance" between Conservatives and the Ulster DUP would not have been enough to guarantee a government.  I actually had a wager on the number of seats Labour would win, and took the 7/1 available on Labour winning between 250-299 seats - odds which I considered extremely generous given the indications of the polls which was backing-up my own opinion.

I will be looking to maintain current holdings in the SIPP for the time being, unless I come across something that looks to good an opportunity to miss.  The markets were up on Friday, but are down today, and we could see this uncertainty until we know whether Theresa May will remain the Prime Minister (a leadership bid is anticipated), or we are heading back to the polls for another election in the autumn.

The problem for both the major parties is, if we do head back to the polls, whether there will be a clear winner.  No doubt, the Conservatives will put up a much better fight next time round and will be more "optimistic" rather than sniping and name-calling which certainly did not help their cause this time. As for Labour, they have to not just maintain the momentum but carry it on.  There was talk over the weekend that another couple of weeks of campaigning would have won them a clear victory - but that was against a poorly led Conservative party.  What I think is the only clear point is that the centre parties (Lib-Dems and Greens) and the more nationalistic extremists (UKIP and to some extent SNP) are dead in the water for the time-being.  If SNP are losing seats to the Conservatives in Scotland, then the Scottish vote is there for taking by Labour - but they may not have time to mobilise an adequate campaign if there is an election this autumn.  The more I think about it, the more I think that Labour have had their chance in 2017 and if we return to the polls - so long as the Conservatives don't do anything silly in the next few months - it is unlikely that Labour will be able to secure the gains they need to form a government.  Remember, they would need a significant swing in the vote to obtain a controlling majority, and so the likelihood is that they would only be able to form a coalition government with the SNP and Plaid Cymru.  Whether that would appeal to the voting public is debateable, so the probability is that the result of a autumn election would be a slight increase in Conservative seats.

Given that outlook, the prospects for the stockmarkets is probably fair as, with Conservatives in power, the Brexit negotiations are more likely to be more hard-line that conciliatory, and that will ensure a weaker £ which will hold shares at their current inflated values in the short-term.  Long-term growth for the UK though, is not good.       

Saturday, 27 May 2017

SIPP grows 6% in a month - tremendous!

Since my last post on 28th April when the SIPP was valued at £130,800 (including cash of £1,937) the performance - along with that of the FTSE100 - has been tremendous. At close-of play on Friday 26th May, the SIPP value was £139,471 (including cash of £2,861); that's 6.6% growth in a month. Okay, that increase of £8,671 includes my monthly contribution of £750 but, even so, £7,921 is still 6% growth.

The current holdings are:
1) BAE (BA.) : 1095 shares - up 4.39% to close at 665.50 
2) BlackRock Smaller Co IT (BRSC) : 1170 shares - up 9.16% to close at 1248.00
3) G4S (GFS) : 2023 shares - up 6.84% to close at 328.00
4) GlaxoSmithKline (GSK) : 393 shares - up 4.95% to close at 1643.50
5) GVC Holdings (GVC) : 1017 shares - up 8.70% to close at 812.00
6) Imperial Brands (IMB) : 170 shares - DOWN 4.35% to close at 3680.50
7) JPMorgan Emerging Markets (JMG): 625 shares - up 4.72% to close at 797.00
8) Lancashire Holdings (LRE) : 1209 shares - NO CHANGE at 689.00
9) Legal & General (LGEN): 2396 shares - DOWN 4.14% to close at 250.20
10) Pacific Assets (PAC) : 1912 shares - up 3.59% to close at 259.00
11) Paysafe (PAYS) : 8000 shares - up 7.97% to close at 494.50
12) Sage Group (SGE): 925 shares - up 7.37% to close at 713.50
13) Schroder Asia-Pacific (SDP) : 1252 shares - up 6.30% to close at  383.50
14) Segro (SGRO) : 1607 shares - NO CHANGE at 490.70
15) Senior (SNR) : 1560 shares - up 9.70% to close at 237.40

Dividends have been reinvested resulting in increased holdings with GSK, LRE, and SGRO. 

Currently, I'm about 5 months behind my original SIPP projection made back in August 2012 - based on an annual growth of 20% - which targeted a fund value at my 65th birthday in November 2014 of £640,000. I have since downgraded that projection to £500,000 (based on annual growth of 15%) but, right now, things are looking a lot better than they were.

I know this rate of growth cannot go on indefinitely, but I'm hopeful that SGRO will see more growth this year especially when promoted to the FTSE100 index (which is almost certain). The state of the World should see sustained, long-term growth for BA., SNR and GFS; the trio of SGE, PAYS, and GVC all look strong long-term growth plays too.  The only disappointment has been IMB as the demand for cigarettes seems to finally be on the wane. 

I was considering disposing and replacing a couple of holdings this time last month, and they were IMB and GSK, but I've held on to them both and will continue to hold for the time being.  I always thinks it is better to be in the market than out. 

Friday, 28 April 2017

Increased holding in Senior

This weak I decided to double my shareholding in Senior (SNR) to 1560 shares. I think this company is significantly undervalued at £880 million given that it has been regularly in profit and has a growing turnover (and dividend).  It should be taken into account that the company was trading at 350 just 2-years ago (the SP this week is about 215) and the conditions of the marketplace for Seniors products in aerospace, defence and energy look strong - well, stronger than they have done in the past 18 months - and the outlook looks better.
I will be happy to achieve an SP of 250+ in the next 6 months and can see that happening for a company that appears to have turned a corner and now has the wind in its sails.

A couple of the shareholdings in the SIPP have been treading water for the past few months, and I will be looking at all the constituents of the SIPP in depth over the weekend with a view to closing some positions and opening new ones.
As of today, the SIPP value is £130,800 (the shareholdings are detailed to the right) and that value includes a cash holding of £1,937.

Saturday, 22 April 2017

5-year review

As my SIPP will be 5-years old come August this year, I've undertaken an exercise on my SIPP to investigate how I am performing - and my performance managing my own SIPP has been okay but nothing to write home about.

Back in August 2012, I transferred all my pension funds into a Hargreaves SIPP (where it still is) and set myself a goal of growing the SIPP by 20% per annum (plus any contributions of my own). The SIPP value back then was £51,684. Hargreaves send out a statement every November (to coincide with my birthday, presumably so that you can plan your way to retirement) and I've used those statements to monitor my performance.

Essentially, If I had put my money into an account that paid interest at 13.91% per annum (with my contributions paid in as & when) then I would have been at the value I was at as of 1st November 2016. Is that performance any good? Well, it is certainly better than putting the money into a Building Society or bank paying 1.60%pa or something similar.

However, if I had put my entire SIPP into nothing else but 3i Group (investment trust) PLC (LSE: III) which was trading at approx 215 in August 2012 my SIPP would now have a value of over £185,000 plus the £22,200 contributions plus the dividends (which have averaged about 4%pa) and then there's the growth on the dividends, and the dividends on the contributions (which would take me an age to work out, and even then it would only be an approximation).  I think a conservative estimate would be a SIPP worth £220,000-plus.
Shares in 3i Group are trading at 775.

I think I can safely say that I'm underperforming.  

From 1st August 2012 to 1st November 2013
Starting SIPP Value = £51,684
Contributions in period = £4,200 (14 months @ £300)
Dividends in period = £1,237.65
Growth in period = £8,970.59
Value as at 1st November 2013 = £66,092.26

From 1st November 2013 to 1st November 2014
Starting SIPP Value = £66,092.26
Contributions in period = £3,600 (12 months @ £300)
Dividends in period = £1,432.72
Growth in period = £4,485.48
Value as at 1st November 2014 = £75,610.46

From 1st November 2014 to 1st November 2015
Starting SIPP Value = £75,610.46
Contributions in period = £4,950 (9 months @ £300 plus 3 months @ £750)
Dividends in period = £2,397.88
Growth in period = £8,506.33
Value as at 1st November 2015 = £91,464.67

From 1st November 2015 to 1st November 2016
Starting SIPP Value = £91,464.67
Contributions in period = £9,000 (12 months @ £750)
Dividends in period = £3,231.93
Growth in period = £8,934.56
Value as at 1st November 2016 = £112,631.16

Tuesday, 18 April 2017

General Election announced for 8th June 2017

Totally out of the "blue", the Prime Minister has announced a General Election to be held on 8th June.
The effect has been immediate on my SIPP and (to it's detriment) as the £ has risen to US$1.27 - its highest value in months (since October 2016). That has taken nearly 0.80% off the value of the SIPP.
Where it will end up immediately prior to the election is anyone's guess.
The GE puts a huge dilemma on the voting public of Britain.  It was one thing to vote for or against a particular political decision wrapped up in the Referendum but, if you want a "hard" Brexit and you were a Labour voter at the last GE living north of Watford, will you really want to vote Conservative on 8th June?
And if you did vote Conservative at the last election, but voted "Remain" in the Referendum, will you really want to vote for the Conservatives again if - as many will - you live in the South-East of England and you have benefitted from the EU for decades?
This GE is far from simple to predict - despite many thinking it will be a "walkover" for the Conservatives - and I can see there being many surprise results. What I am aware of, from a personal point of view, is that I have not yet met a "Remain" voter who considers that they may change their vote if given the opportunity again, but I have met a few "Leave" voters who would like to reconsider.
Where there is uncertainty, there is opportunity - and that means for the next 6 weeks I will be paying very close attention to my investment portfolio's.  Both my SIPP (which I detail on this blog) and my ISA (which is about half the value of the SIPP and is being managed with the intention of paying off my mortgages in about 8 years time) will be managed with the intention of making the most of the turmoil.
Fair-play to Theresa May for having the audacity to make this decision, which will be considered brave or stupid depending on the result come 9th June.  I (for one) would not have made such a decision if I were in her shoes, as I would have held the office until 2020 and made certain of the Brexit strategy before heading for the polls - and I voted "Remain" in the referendum.
My prediction? I can see another coalition government, one which brings together the Labour, Lib-Dems and the Scottish Nationalists under one leader - unfortunately, that may have to be Jeremy Corbyn.

Thursday, 13 April 2017

Easter 2017 SIPP Update

Good recent progress in the markets has seen my SIPP put on some decent value.
On 3rd April the SIPP had a value of £128,000 and since then I have made my monthly contribution of £750 and the value has grown to £131,880 as close of business today (13th April 17).

Most of the growth in value has come from my Blackrock Smaller Companies IT (BRSC) which was valued at £12,285 on 3rd April but is at £13,308 today.  Segro (SGRO) has also made healthy progress from £7,132 to £7.572 today. However, progress has been fairly decent across the portfolio.

Looking ahead, I'm hopeful of good growth to come from Segro (SGRO) as the company now has a stranglehold on the warehouse space at Heathrow Airport and this should make great contributions to earnings this year now fully incorporated into the company. I'm expecting the company to be promoted to the FTSE100 this year - the SP will only have to be 495+ to guarantee promotion, and it's at 480 today - and if that is achieved we could quickly see another 5% of increase as funds balance their portfolios.

G4S (GFS) is well on the way to recovery now - I managed to purchase 50% of my current holding at 195 in May'17 with the other 50% purchased at an average of 245 - and the SP is currently at 307 and growth looks likely to continue.

GVC Holdings (GVC) has been a revelation, and goes from strength to strength. It is almost certain to make further acquisitions this year and is another company with a target of being in the FTSE100.

Finally, Lancashire Holdings (LRE) will have their AGM in early May followed by the release of the 1st-quarter figures for 2017 and, on the proviso that no news is good news in the insurance business, the numbers should be good enough to suggest another Special Dividend in December is on the cards.

Tuesday, 4 April 2017

How is the forecast going?

When I started this blog, the intention was to build a SIPP fund value of over £500,000 by my 65th birthday on 8th November 2024. At the current level of contributions (£750 a month) and if I can achieve 15% per annum growth (including dividends) then I can hit my target of £500,000 on 8th November 2024.

The fund had to be at £125,000 on my last birthday (8th November 2016) to be "on target" and the fund value at that time was and at that time it was valued at £110,000 plus £3,000 in cash - so trailing a fair bit which was disappointing as in early October the SIPP had a total value of almost £120,000.

There will be ebbs & flows in the value and recent performance has been encouraging. The revised target for 8th November 2017 is £153,000.

That is calculated at
Target for 8th November 2016 = £124,615
Growth @ 15% pa = £18,692
Contributions: 12 @ £750 = £9,000
Growth on contributions 7.5% = £675
Total = £152,982
Dividends are currently £3,362 in the year 2016-17

Monday, 3 April 2017

Contributions to date and current holdings - April 2017

The value of the SIPP at commencement of this blog on 1st August 2012 was £51,684.02

Since that date, my contributions to the SIPP have been

Sept-2012 to July-2015

35 @ £300 = £10,500

August-2015 to March-2017

20 @ £750 = £15,000

Total contributions = £25,500

BAE (BA.) 1095 shares worth £6,936
Blackrock Smaller Co IT (BRSC) 1170 shares worth £12,285
G4S (GFS) 2023 shares worth £6,190
GlaxoSmithKline (GSK) 390 shares worth £6,468
GVC Holdings (GVC) 1017 shares worth £7,307
Imperial Brands (IMB) 170 shares worth £6,595
JPMorgan Emerging Markets IT (JMG) 655 shares worth £4,775
Lancashire Holdings (LRE) 1195 shares worth £7,940
Legal and General (LGEN) 2396 shares worth £5,886
Pacific Assets IT (PAC) 1192 shares worth £4,650
Paysafe Group (PAYS) 8000 shares worth £36,920
Sage Group (SGE) 925 shares worth £5, 832
Schroder Asia-Pacific IT (SDP) 1292 shares worth £4,732
Segro (SGRO) 1578 shares worth £7,132
Senior (SNR) 780 shares worth £1,615
Cash = £2,952
Portfolio Value = £128,000 (approx.)

Retained and sold in past 18 months

It has been a long time since I update the Pension Builder blog, and a lot of changes have happened in the meantime.  However, some significant holdings remain an integral part of the portfolio, such as:-

GlaxoSmithKline (GSK) – was 620 shares, now it’s 390 shares

GVC Holdings (GVC) – was 1000 shares, now it’s 1017 shares

Lancashire Holdings (LRE) – was 1000 shares, now it’s 1195 shares

Optimal Payments (PAYS) – was 10000 shares, now it’s 8000 shares

Segro (SGRO) – was 1300 shares, now it’s 1578 shares

BAE (BA.) - was 185 shares, now it’s 1095 shares

Blackrock Smaller Co IT (BRSC) – was 895 shares, now it’s 1170 shares


Those that have been sold off completely are:

Fidelity Asian Values (FAS) was 1190 shares

Hill & Smith Holdings (HILS) was 375 shares

International Capital Group (ICP) was 643 shares

Laird (LRD) was 402 shares

RPS Group (RPS) was 686 shares

Brown Group (BWNG) was 492 shares

Ashmore (ASHM) was 300 shares

RSA Insurance (RSA) was 200 shares

Unilever (ULVR) was 58 shares

Pearson (PSON) was 72 shares

Cenkos (CNKS) was 870 shares