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.