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!
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