Buy on dips

Hi all,

The market has continued to rally strongly since my last post. I am still a buyer of dips but most of my investment went in, when the ftse was 4800 to 5000 and the Dow 9800 to 10000. As you can see from the chart below, I think we are in a bull market channel at the moment. And even though equities are starting to look overvalued in certain areas, money printing from the US and other central banks could push this market higher to the top of the channel above even 1300 on the S&P.



However from my own investment perspective, I become more cautious as we go higher. So far my investment portfolio is up 9%(after tax) YTD, vs. my cash holdings which are only going to make 2.5%. I want to protect my gains and look to buy on dips into shares that are undervalued by Mr Market.

I sold half of my BP holding at £4.40, as it became 7% of my portfolio - it rallied from £3 to £4.40. Although I think BP is a buy at its current price, I do now want to have all my eggs in one basket because that is where I have suffered in the past.

So I then bought HSBC, with the money from BP. I think they are undervalued and the strongest European bank. They have both growth in their core markets, mainly from Asia and they offer the prospect of growing their quarterly dividend payments. Of course there is still a risk the financial crisis will come back but I think they have the best chance of surviving a 2nd round, if it happens.

I have also invested more into Japan. This is my contrarian pick for the next few years. Japan shares are written off and have been for almost 20 years. But I think this is the time to buy. Everyone ignored gold and wrote it off and look now? This is why I buy when everyone else is selling.

I will update further in the next few weeks. Stay nimble and be careful out there. Do not risk more than you can afford to lose.

"I am a huge bull on this country" - Warren Buffet

I`m still not yet able to share Warren Buffets enthusiasm for the future of the US stock market but I still believe that stocks are the better asset class to hold, whether or not there is a double dip or weak growth in the global economy. Government bonds are at yielding at near 30 year lows, at 2%, cash is no better but still shares can give you a yield of 5-6%, even with the latest rally.

Vodafone are a good example. I tipped them on this blog at £1.32. They are now £1.60 and their dividend is over 5%. that’s a total return of 26% currently, 12 times what you would get in cash!

One of my best tips on this blog is AVIVA, they are up 34% since I tipped them at £3.05. With the dividend on top, it’s near 40% return.

As we have seen my biggest mistake was BP. I have managed to reduce my avg buy price to £4.50 and still optimistic that they are undervalued and will sit tight for the long term. The oil spill was what I call a "black swan" event. It happens to every investor and this is why you need a strategy, to be able to cope with disasters like this.
This is why I never hold more than 5% in one investment, so in the unlikely event that BP had gone bust, I would have still had 95% of my Portfolio remaining.

YTD the investment portfolio is up 7.5% vs a 3% gain on the FTSE100. A couple of disappointing investments such as BP and absolute return funds, have held back the performance of my Portfolio but there is still 3.5 months of the year left and many of my holdings still look undervalued and overlooked by "Mr. Market"

GlaxoSmithKline, AstraZeneca, BP, Vodafone (the Big safe blue chips) particularly have further to run in my view....

Good luck all!

BP and Severn Trent/Imperial Tobacco update

Hi all,

Although I don`t generally do this, I have resorted to some short term trading in BP, to bring my average buy price down. I sold some of my £4.22 holdings for break even a few weeks ago and have now just re - bought at £3.79. So I have 2 lots under £4 but offset against the ones I bought at £5.68 and £5, my average is £4.30. Although this was not the original plan, I am happy to hold BP for the long term at that price, looking for £5 again next year.

Severn Trent is now £12.85, from £13.41 when I sold. I am very happy I took some profits in the Portfolio. Never be scared to take profits, even on a good asset such as Severn Trent. Imperial Tobacco look good value and holding above the £18 support line currently, even as the market falls. A very good defensive asset to hold in times like these.


The world markets are very weak at the moment, as fears of a double dip continue to persist. My view is that equities, especially high yield ones look too cheap relative to other assets such as govt bonds, cash or property. Even with a double dip scenario, I think defensive companies such as GlaxoSmithline, AstraZeneca and National Grid with yields of 5-6.5% will outperform cash(with rates unlikely to go up anytime soon)

Just make sure you have a diversified Portfolio and "hold at least your age in cash". That is the absolute minimum weighting I would have in cash because you never know what black swan event is round the corner. Then if the market tanks further from here, I you will have cash remaining to buy into further weakness and average down your holdings for the long term.

Another Defensive asset added

As soon as I sold Severn Trent I moved the money into Imperial Tobacco at £18.01.

You can see on the chart there is strong support at £18. It has a yield of 4.6% and is seen as very defensive. A re-rating such as the one that happened on Severn Trent, looks likely on this share over the next 6-12 months. They have been struggling so far this year and I thought this was a good time to enter, with the worries about growth effecting risk appetite among investors. They are likely to build stakes in more defensive shares that are undervalued such as this share.

Sold Severn Trent for 40% profit

This week I sold Severn Trent for £13.40 for 40% profit(as well as the final dividend). Bought at £9.60.



Although I believe they are a good long term investment, they have risen so much so fast and can see other shares that are now better value currently. The dividend is still good on Severn Trent but the capital gain might be limited unless there is a bid approach.

Buy low, sell high

Hi all, sorry I have not updated the blog for a while. It was a tough time in the correction. The FTSE 100 at one point was -18% since the start of the year, close to a becoming a technical bear market. Since the low in May we have bounced back strongly.

I have continued to buy on dips and increased my appetite for risk the lower we went. I added more BP to the Portfolio at £3.40 averaging down my other buys. I misjudged how bad the oil leak was and to be honest not happy with how BP communicated the situation. But now, I am where I am and still believe they are undervalued and will hold them for the long term and wait for the dividend to be restored.

However all my other buys into the dip are looking good. Aviva are up 27%, AstraZeneca up 14%, BT up 22%. I am also still doing very well on other high income shares in 2010, Severn Trent(+24% YTD) and United Utilities(+18% ytd).

My UK bank holdings are also doing very well and driving gains in the portfolio. Lloyds is up 50%, RBS up 76%, Barclays up 15%

Some of the shares struggling and holding back the Porfolio, are Glaxosmithkline (-14% YTD) and surprisingly Tesco (-7%). I think both of these are undervalued significantly and will bounce back. My 2 absolute returns & bond funds are holding back the portfolio’s gains as well. My Chinese and Japan funds are also not doing well so far this year but are good long term prospects.

However as I have always said, make sure you have a diversified Portfolio. Although the total gain in my Portfolio is lower than if I just invested in high risk stocks like the banks and miners, I am aiming for consistent profitability over the long term. As Warren Buffet says, rule no.1 Never lose money, rule no.2 – Never forget rule no.1

The stocks, bonds and shares Portfolio is up 5.5% YTD vs a 1% gain in the S&P 500 and 0.5% on the FTSE 100. I am happy with this given that BP is taking 1.0% points off my portfolio currently. On top of this I estimate my income will be around 3% at the moment, which would equate to 8.5% in total return for the full year. I am hoping that by the year end I can increase the 5.5% capital gain up to about 7% to give me a 10% gain overall in 2010.

Of course a lot of this depends on how the stock market does for the rest of the year. Forecasts vary from 4000 to 6000 on the ftse100. My estimate at the start of the year was 5800. I still believe equities are a better asset class to have your money than in cash or govnt bonds and will buy on dips into further drops in the stock market.

Portfolio update

Hi all,

Here is the latest update on my Portfolio. 2010 year to date(as at 7th june), my share Portfolio is down 0.9% on a like for like basis, if you include cash and look at my total Portfolio, the loss is 0.5%. This is ignoring income. The FTSE 100 is down 5.3% at its current value of 5115, so at the moment although my Portfolio has not risen so far this year, at least I have not lost much. At least the income continues to come in from my defensive high yield investments which will help “average up” my low income on cash.

Aviva is doing well since I bought at £3.05 as per the blog, up 7%. My water stocks are the strongest performers, Severn Trent and Untied Utilities are up 12% so far this year. RBS is my best performer up 45% YTD.

My worst investment so far in 2010 is BP (down 26% YTD). However at the start of the oil spill, I was underweight in BP, only 2% of the Portfolio. This was because they were rising very fast and I was worried about oil prices falling in a stock market correction, hurting BP. However it was a 1/1000 event, the deep water oil spill, that has caused the dramatic decline in the price. As we have headed lower, I bought at 5.70 thinking the leak would be capped quickly. Unfortunately things got a lot worse. As the price continued to collapse, I have added more at £5 and £4.20. This has brought my weighting in BP, to a hefty 5%, the maximum allocation I will risk in one investment.

My simple approach is to buy when others are fearful, hence the increased risk taken on BP. I don’t understand why people wait till the market is doing really well and start buying shares. I might buy too early but the fear of missing out is too great for me, to wait.

On my general strategy, overall I am still cautious and still overweight in defensive income shares but still have growth shares and funds for the longer term. I am worried about a further pull back in the stock markets but will continue to invest into this dip, for the long term.

The dangers of going against the herd

Well I have to hold my hands up here and admit that my BP investment has not gone to plan. Going against the herd can often be very risky but also lucrative over the long term. BP is now down 36% from its peak just before this oil crisis.




However I still believe that this investment can come good. I have therefore averaged down on BP again at £4.20. I would have rather waited for the March 09 bear market low of £4 or even £3.68 which was the Lehman Oct 08 low. If we get towards £3.68, I will have to consider one more entry, as I believe by this point, bidders will be circling BP. There are already rumours Shell and Exxon will be tempted to swallow BP.

This has now become quite a big bet that BP can still turn the situation around, cap the leak and continue to pay its high level of dividends, despite the huge costs of the cleanup.

But the key rule as ever is not to risk too much on one investment. Good performers such as AstraZeneca, Severn Trent and United Utilities, are offsetting the current weakness of BP in my Portfolio.

But just remember this; the key to making money in stocks is not to get scared out of them. Many people have sold out of the stock market through fear, just at the time when it’s better to be adding good quality shares to your portfolio. I can guarantee that if this market starts to recover again, all the analysts will come out saying buy shares, after they have gone up 10%!

2 defensive high income tips

Hi all,

Some recovery on the Dow Jones and Ftse. A risky rally and some relief short term. However if you are like me and want to shore up your portfolio, with defensive high yield shares, then these are 2 I suggest.

Scottish and Southern

Scottish & Southern Electric are one of the biggest electricity providers in Europe and the UK. They are a defensive high yield company (7%). Yes they are susceptible to the economy but everyone needs electric and I believe these worries are priced in at the moment. As you can see from the chart, they are still holding the support line I have drew just above £10, for 2 years now.



RSA insurance

Again this company like SSE above is holding at the support line in the chart below. They are considered quite a safe investment in the insurance industry, with a high yield at approx 7%. Of course they are not as safe as the drug companies or water companies but I think that this is a good opportunity to enter if you do not already have them. I would spread your risk and buy Aviva yielding 8% as well.

Remember these are investments for the long term and one big risk is they cannot sustain their dividend levels if there is any further deteriation in their business vs. say Glaxo and AstraZeneca where their dividend is pretty much safe and growing.

Keep your nerve

Hi all,

Fear continues to dominate market direction. Officially we are in a "correction", which many define as 10% or more decline from the peak. Unfortunately the sentiment is so negative, that we could continue to go lower, if the Dow loses 10,000 and the FTSE 5000.

My strategy has not changed however. I am drip feeding funds into the market as we go lower. My latest additions are the following:

1. Averaged down on BP@£5. Continue to believe that BP is being oversold but I understand that is impossible to "catch a falling knife", therefore I will add more positions as we head lower. I will wait for £4.50 before thinking about buying another trench of BP.

2. Topped up in Newton Higher Income fund. This fund is paying at least 7% income at the current price and is invested in Big blue chips, that should do well from the global economic recovery and the weak £.

This is going to be a tough couple of months but remember Warren Buffets famous quote - “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”.

Buying on dips

Hi all,

Sorry for not updating for a couple of months. I am going to start updating my blog at least weekly going forwards.

It’s been a tough couple of weeks on the stock markets, as the 10% correction has hit us hard, with Greece and Europe concerns dominating the news.

My strategy of being fairly defensive positioned and increasing my cash position to 45% at the end of Q1, has benefited me a lot by reducing how much I lost in the sell off. I sold Skandia global best ideas (which was overexposed to miners/banks), half of my ftse100 tracker at 5775 and Aberdeen Emerging Markets. My portfolio is up by 2.5% YTD(without income) vs. the Ftse100 which has a YTD return of -3%. This is not amazing return but I hope that the stock market may pick up later in the year

This has enabled me to drip feed funds into the market at lower prices and I have reduced my cash position by 5% to 40% as I have invested in what I see as good assets at knock down prices. I have bought the following,

1. Doubled up on BP @£5.70. Unfortunately I bought too early but will consider adding even more into such a good long term opportunity. They currently yield 7.3% and are in the top 3 dividend payers on the ftse100 now. I think the fears of the oil slick are overdone.

2.I bought Aviva @£3.05, down 20% over 30 days. They yield over 7% and have not participated in the rally since the low last year. Short term they could continue to suffer but the fears are overdone that they are overexposed to the PIIGS (Portugal, Italy, Ireland, Greece and Spain).

3. AstraZeneca @£ 28.65 – another defensive asset, yielding over 5%. In uncertain times such as these, investing in a company with a strong balance sheet, dividend growth and strong brand, seems like a good bet. I already have GlaxoSmithKline, so these 2 defensive assets are now a key part of my Portfolio.

4. Fidelity China special situations @£1 offer price - Bought this into the sell off in China. China will be the Worlds biggest economy in 20years time, and I want to increase my exposure to their growth. (I already have Jupiter China)

Therefore my strategy remains the same going forwards to “buy on dips” into defensive, high yielding companies, with strong balance sheets. But also to hold onto my investments in Banks, commercial property and other “dogs”, that are undervalued if you look at the longer term recovery story over the next 5 years. And finally to invest in the high growth economies such as China, for long term growth, as the West struggles to come out of its huge debt problems over the next decade.

Remember that it is key not to keep all your eggs in one basket, hence why I have a diversified strategy, with no more than 5% of my Portfolio in one asset.

Vodafone update

Hi all,

As you know I added to my position in Vodafone at £1.34. They have been stuck in a trading range since August. They are undervalued, forward dividend yield was as high as 6.3%.




Today was their trading statement and they popped 4% higher, as they increased their profit outlook above expectations for 2010, with free cashflow rising 0.5 billion above previous forecast in 2010 as well.

They are a strong hold and my 4th biggest holding.

Stopped out on BP and Man Group

All,

Unfortunately I was stopped out at breakeven on BP and Man Group today. I don`t think I wanted to risk staying long on them on my spreadbetting account when I already hold them.

I have another share tip to discuss which I will put up a blog about later.

Move BP and Man stops

Moving BP and Man Group stops to breakeven at 5.66 and 2.40. Lets not take any risks in this market.

Long BP @5.66

All,

BP results lower than expected and overreaction on the share price. I am long on BP at £5.66, stop loss tight at £5.63. Limit order for 5.75

Still long Man group, moved stop to 2.30

Today`s actions

Hi all,

I just wanted to discuss a few things that happened today. I went long on Man Group as per the previous post at £2.40. At an 11.6% yield the highest in the ftse 100 and with the price dropping 41% over 11 consecutive days, I saw an opportunity to go long(buy). I already hold this share as you know from previous posts but I wanted to take advantage of the severe sell off recently, that was unjustified and overdone. Sentiment in the market was changing this morning and I got on board for the short term. Stop loss is £2.20 for now.

On another note, did you see the water companies today?! Wow what a move to the upside. Rumours about a bid for Northumbrian water, lifted up my holdings in United Utilties and Severn trent by 4% today.





Mr Market is realising now that the defensive income shares were or are undervalued. Will Vodafone be next? Their results are this week, watch out for those on Thursday.

Long Man Group@ 240

All,

Just wanted to let you know quickly, I just went long on Man Group at £2.40. Will explain reasons why later.

January Portfolio Performance -0.9% vs.- 4.0% fall in the FTSE 100

Well after a good start to January the stock markets turned and headed south. 2 out of 3 companies on the S&P index in the US, beat expectations with their Q4 results. US GDP came in way ahead of expectations at 5.7% for Q4'09. But nervousness about the recovery going forward are what investors focused on. Greece`s debt problems, china tightening monetary policy and some other weak data in the US, made investors more nervous and risk appetite reduced. Investors cut their holdings of shares and commodities.

Turning my attention to my Portfolio, January was a very good performance given the correction in the stock markets. The S&P index fell 5.5% and the FTSE 100 fell 4% in January. My Portfolio only dropped 0.9% on a like for like basis(but increased 1.2% overall, due to savings added from my day to day income, into the portfolio). The defensive positioning of my portfolio (43% cash, and half my shares in defensive UK income) meant that I was not hit too hard by the sell off in miners, oils and cyclical stocks.

Untied Utilities and Severn Trent , up 8% and 6%, helped to offset weakness in other areas. United Utilities is my 3rd biggest holding and see it as a safe, high income share for the long term. My bank holdings rallied at the start of the year but fell back but overall they are up 0.5% on the end of December. I was disappointed with GlaxoSmithKline who dropped 8% in January, more than the market, when they are meant to be defensive.

My worst performer and riskiest holding was Man Group, the hedge fund manager. I only have 0.5% of my portfolio in these. I was up 100% on them at one stage(I bought them at £1.80) but they dropped 41% in the last 10 days to finish at £2.37. This is the risk with holding riskier assets and you can now see why I have been fairly defensive so far in 2010. However I believe this company is undervalued and now has the highest dividend yield in the FTSE 100, at 11.6%. If you invest in this share just remember the risks that come with it.

Other risky assets that fell in the portfolio, were Jupiter China and Aberdeen Emerging markets. Emerging and Asian markets are susceptible to a large correction but over the long term, I believe that China and Asia are the best places to seek out growth, therefore I will hold.

And what about the rest of Q1? Well I have become more nervous about how big this correction will be but on the other hand we could rally up higher by the end of Q1. I do not want to sell holding like Vodafone, Glaxo, National Gird paying yields of 4-6% and still believe that the UK bank earnings for Q4, could surprise on the upside in February.

Therefore I will continue with the same Portfolio mix into February, defensively positioned but also able to take advantage if the stock markets do rally.

Defensive shares strong again today

LONDON (Reuters) - The leading share index added 0.3 percent on Tuesday, as support for defensive issues, and a modest early rally on Wall Street, offset weakness in heavyweight miners and banks.

At the close, the FTSE 100 index was up 16.54 points at 5,276.85, snapping a four-session losing streak, having earlier reached an intraday low for the year of 5,215.73.

Pharmaceutical stocks were the best blue-chip performers, wanted for their defensive attractions and helped by solid full-year results from Swiss peer Novartis , with GlaxoSmithKline (LSE: GSK.L - news) , AstraZeneca (LSE: AZN.L - news) and Shire (LSE: GB00B0KQX869.L - news) putting on 1.5 to 1.6 percent.

Other defensive issues were also in favour, with cigarette maker Imperial Tobacco (LSE: IMT.L - news) up 2.0 percent, household cleaning goods group Reckitt Benckiser (LSE: RB.L - news) adding 1.4 percent and United Utilities (LSE: GB0006462336.L - news) up 1.1 percent.

Food retailers were wanted too, with J Sainsbury , Tesco (LSE: TSCO.L - news) , and Wm Morrison up 0.7 to 1.3 percent.

Bought Vodafone at £1.34

Hi all,

Just to let you know I have increased my holding in Vodafone at £1.34. They could drop more as the market keeps falling but they are a good long term opportunity and will buy more if they keep going down.



Some tehcnical support on the chart on the black line as well but I am not really looking at the techincal side as much. I`m buying from an investors point of view which I have already explained in previous posts. 5.7% yield (6% on a forward basis), defensive, strong balance sheet and cashflow and it has not participated in the rally from March.

Has investor sentiment changed?

Well what a week fellow investors. The bull market took a sudden turn this week and we fell out of the bullish channel we have been in since the rally started. This does not mean we`ll head lower from here but it is worrying.



To answer the question in the blog title, I do not know if sentiment has changed and the bull run is over but I am positioning myself for the downside and upside with a diversified portfolio.

Most of the pain for me came on the drop in Barclays share price, following Obama`s announcement that he would try and limit the banks size and prop trading activities in the US. This would effect the Lehman`s operations Barclays bought and provided the one thing markets hate - uncertainty. For now I still believe banks offer good value over the long term and will continue to hold, despite the uncertainty. Just ensure like me, you do not take big bets on one part of the market.

Fortunately I have the majority of my investments in defensive income shares and these came to the fore last week. As mentioned in the previous blog, water companies such as United Utilities and Severn Trent and Vodafone are seen as defensive, high yield investments. I have shown below their performance vs. miners and Barclays. You can see they went up while the stock market tanked, particularly miners and banks suffered. Miners particularly, I believe will struggle this year after rallying so much last year.



I also have Glaxo, Tesco, National Grid and BP. I also have 2 absolute return funds that deliver small returns in difficult markets such as these. These funds do rely on the fund manager to go long and short on the market at the right time but Blackrock Absolute Alpha has delivered a return of 7% over 2 years, while the stock market has fallen over 30%, so something to consider adding to your portfolio if you are worried about a bigger correction.

I continue to build cash as a % of my portfolio to shelter my balance sheet from these big falls in the stock market. If we see a continued correction in the stock market(at least 10%) I will invest some of this cash into the market.

At the moment we all hope that the stock market will not crash lower but please please please, diversify your portfolio and have a good selection of defensive shares and cash, as well as investing for growth over the longer term.

Look for sectors left behind by the rally rather than those that led the chart

Hi all, I thought I would now explain my investing strategy a bit further. Generally I am a contrarian investor, looking to invest in shares that are undervalued and unloved by the market.

Generally, I back strong companies, which have strong balance sheets, cash flow and dividend growth. At the moment there are many companies who fall into this band, which have also been left behind by the rally. These are very good investments to back if you are a contrarian and want to cycle your money out of investments near their highs (such as miners) and back into shares still near their lows.

Miners and cyclical stocks have been popping higher, since the March 09 lows but this will not last forever, especially in this current economic climate. These are the shares I am particularly looking at:









My favourites in that list are Vodafone and the 2 healthcare companies, Glaxo and Astra. This is because they are Large cap companies, with very strong cashflow and brands. Vodafone I am especially interested in with 5.7% dividend, twice as much as you get in cash with potential for upside, as the market re-rates this share higher.

Then from the chart below, you can see how much they have been left behind in the ftse 100 rally. So you are going against the trend if you back this defensive mega-cap but that is how you make the most returns in the long run. Vodafone particularly has been a very poor investment now for 10 years and that’s why I am buying more and more now, as I believe they will come back into favour. Added to this, you have its defensive qualities, so if there is a stock market correction, they will not be falling 30% like the miners and retailers.

2010 Strategy

Hi all,

I thought I would start off this blog with my strategy and how my portfolio is invested for 2010.

You will see from my investing approach that I am a contrarian investor, seeking value in beaten down and undervalued companies. I am a risk taker but do not take unnecessary risks, that would put at risk my balance sheet & investment Portfolio. I have been through 2 crashes, the dot com boom and bust and the credit crisis and have learnt not to put all your eggs in one basket.

So, going into 2010, I am positioned 43% cash&fixed income, 57% in the stock market. This is fairly aggressive positioning, as I believe stock markets will continue to rise in the 1st qtr of 2010. However, more than half of that 57% is in defensive shares and funds, with strong balance sheets and dividend income. I am slowly becoming more defensive the higher this market keeps going, as there is an increasing risk of a correction.

My strategy is to increase cash as a % of my portfolio through the 1st half of this year towards almost 50%. Partly for tax reasons but also because I feel that there will be a better opportunity to enter stocks lower in the 2nd half of the year.

However, although I am becoming more sceptical about how much further this bull run can go, there is still value in specific companies. This is a “stock pickers market”

I believe the 3 main areas of value in the stock market are

1. UK income shares, which incudes the likes of Vodafone, Glaxo, AstraZeneca, BP, National Grid etc. They have high dividend yields and strong balance sheets and unlikely to cut their dividends.

2. Financials - I disagree with holding only the strong banks and see a-lot of value in RBS and Lloyds. the potential reward is far greater, than the favourite HSBC. This is very high risk and therefore I advise you not to risk too much on of your portfolio in banks. I bought more RBS at 28p(Up 35%) and Lloyds at 50p(up 15%) on the 31st Dec 2008.

3. Commercial and residential property shares - These beaten down stocks, have not taken part in any of the bull run in the stock markets and are attractively priced in the short to medium term. I have recently bought British Land and Taylor Wimpey. I believe the UK property market faces huge headwinds but these 2 companies are still priced at near Oct 2008 levels, where we thought there would be a depression.

So there you go guys theres an small insight into my strategy for 2010. I will talk about individual shares, gold, resources, currencies, bonds, proprty and so on throughout the year.

Just ensure that you do not risk what you cannot afford to lose and stay diversified.

Good luck for 2010

"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1"- Warren Buffett

Why throw cash away?

So my 1st blog of the year will 1st focus on helping you understand the importance of cash and making the most of it.

Many people blame being too busy at work or forget, for reasons why they do not manage their money correctly. However this is what banks rely on! I bet many of you are in bank accounts and ISA’s paying 0.5% or below.

If you have £30,0000 in a standard savings account at 0.5% interest and move it to one paying 2.5%, you will earn an extra £600 for no work whatsoever. It honestly takes 10 minutes to do.

Then there are the ISA allowances in the UK. Whatever you do, you must use all of your yearly allowance. It is £3600 this year and £5000 next tax year. Saving tax will become so important over the next 10-15 years as the government increases tax rates, to recover from the credit crisis.

Here are the 2 instant savings accounts I see as the best at the moment:

Santander direct ISA Issue 3 – 3% AER, 2% bonus rate for a year. Move ISA in one years time

Santander eSaver Issue 2 – 2.5%, with 2% bonus rate. Move savings in one years time.

After one year, I`ll be moving my money out of these accounts to the best paying ones.

One last tip is make sure you apply to move your ISA, 6 weeks in advance, as it takes about that amount of time to move it. You don’t want to lose 2 or 3% interest over 6 weeks.

My next blog will talk about my Investment Portfolio! This is where the real money can be made.

Introduction

Welcome all,

This blog is dedicated to helping you work towards financial freedom, through investing and trading over the short, medium and long term and managing your portfolio effectively.

Financial education and the management of money has been completely overlooked in the education systems across the world. This is why many people end up poor, even though they have “good” jobs.

If you were to put the same effort you do in your career into managing and building your own balance sheet, you will eventually become financially free.

This is what I learnt early on as an accountant. Why am I managing someone elses balance sheet, when it is my balance sheet that matters in the long run? So from an early age, my focus has been on building my own balance sheet and portfolio of assets, that will eventually mean I have my own income and not rely on working 60/70 hours a week for a monthly salary.

I run my own Portfolio of investments and will let you know how I invest to make money and some of the many ideas I have. However I am not a tip sheet, I will just give you ideas and my own thoughts on how I invest my own money, where I see value in the stock markets and so on. I am still learning like everyone but it is through my mistakes that I have learnt most.

I hope you enjoy this blog and let me know your thoughts!