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.