A stark headline on todays City AM (daily business free-sheet). A study by Policy Exchange - a government funded group gathering information for a better society - reckons that saving for a pension should be made compulsory. Today, average savers have just £36,800 in their own pension pot, well below the £240,000 target for the minimum required for a decent pension in retirement.
I fully support any move for enhancing pension pots for retirement but, rather than just pumping money into mis-managed funds or low-interest-rate bonds, my opinion is that more should be done to educate the population into managing their money throughout life.
This should start at school with lessons demonstrating principles such as compound interest, and pound-cost-averaging. The introduction of SIPP's was a significant step in removing the blinds from the "dark art" of pension funds. Now, the people of Britain need to be educated to know how to get the best from them.
I have set myself a Pension Fund target of £640,000 to be in my SIPP on my 65th birthday (8th November 2024). It may seem an impossible task from my current value of approximately £74,000 but you have to set yourself a goal.
Wednesday 22 January 2014
Tuesday 14 January 2014
SIPP off to a great start for 2014
Having ended 2013 with a SIP value of £70,400, the fund has picked-up nicely and as of today (lunchtime Tuesday 14th Jan) it has a value of approximately £72,900 - that's an increase of £2,200 less the £300 added to the fund myself on 7th Jan. I'd have been happy with that much growth in a month, never mind just 2 weeks.
The main driver has been £OPAY; valued at 351 at the start of the month, this share is now at 424 - an increase of 20% in a couple of weeks. I honestly think this share could have a market value of over £1 billion, which means there is plenty of growth from its current market value of £645 million, basically another 50% and more. It surely must be coming under scrutiny from a couple of major players in the financial markets who are stake-building pending making a bid offer.
I've also increased my shareholding in the Herald Investment Trust (£HRI) and now hold 650 shares. The plan is to reduce my shareholding in Imagination Technologies Group (£IMG) and move that money into £HRI. What is happening at £IMG is anyone's guess. Essentially, the firm is growing well with (according to the December 2013 interim statement) increased revenues of approx £14 million (or 19%) in the 1st-half-year. This time last year the share had a value of 435 which rose to peak at 540 - so why the shareprice is languishing at 178 is beyond me. There is a bit of bid activity going on elsewhere, and I'm sure that this company is currently being looked at by potential suitors.
I've also recently trimmed my shareholding in JPMorgan Mid Cap Investment Trust (£JMF) from 1315 shares to 1140, which was basically just a piece of rebalancing.
The share price of International Personal Finance (£IPF) continues to fluctuate wildly between 480 - 520, and is may be some time (8 to 12 weeks) before this share stabilises and starts rebuilding confidence. Given the efficiency of this company, I have faith that it wont be long before we see the share price above 600 again.
So, onwards and upwards.
The main driver has been £OPAY; valued at 351 at the start of the month, this share is now at 424 - an increase of 20% in a couple of weeks. I honestly think this share could have a market value of over £1 billion, which means there is plenty of growth from its current market value of £645 million, basically another 50% and more. It surely must be coming under scrutiny from a couple of major players in the financial markets who are stake-building pending making a bid offer.
I've also increased my shareholding in the Herald Investment Trust (£HRI) and now hold 650 shares. The plan is to reduce my shareholding in Imagination Technologies Group (£IMG) and move that money into £HRI. What is happening at £IMG is anyone's guess. Essentially, the firm is growing well with (according to the December 2013 interim statement) increased revenues of approx £14 million (or 19%) in the 1st-half-year. This time last year the share had a value of 435 which rose to peak at 540 - so why the shareprice is languishing at 178 is beyond me. There is a bit of bid activity going on elsewhere, and I'm sure that this company is currently being looked at by potential suitors.
I've also recently trimmed my shareholding in JPMorgan Mid Cap Investment Trust (£JMF) from 1315 shares to 1140, which was basically just a piece of rebalancing.
The share price of International Personal Finance (£IPF) continues to fluctuate wildly between 480 - 520, and is may be some time (8 to 12 weeks) before this share stabilises and starts rebuilding confidence. Given the efficiency of this company, I have faith that it wont be long before we see the share price above 600 again.
So, onwards and upwards.
Friday 3 January 2014
What does 2014 hold for the SIPP?
There has been a bit of movement within my SIPP since I last updated my shareholdings last September.
I have increased my shareholding in Blackrock World Mining IT (£BRWM) to 1310 shares worth approximately £6,100. These were purchased at an average price of 468.20 and I'm hoping once the world economy starts to grow out of recession that these shares will increase significantly in value. Mining stocks are generally depressed so any increased demand should trigger a movement.
The international bank HSBC Holdings (£HSBA) has has a bumpy ride these past few months, despite most commentators suggesting the share has the potential for significant gains. I have bought again on the lows (another 480 shares at 657 on 10th December) and my shareholding has now cost me an average of 697 per share. My plan is to reduce the shareholding to 1500 shares once the price breaks the 700 level.
Not all life is rosy, two of my shareholdings have recently come unstuck. Imagination Technologies Group (£IMG) dropped sharply in value on 11th December after a warning issued by the company that shipments would be lower than anticipated. My opinion was the reaction was overdone, and so I doubled my shareholding to 3000 shares. I think this company has potential to exploit any economic recovery and I'm in for the long-haul. Even so, having lost £1,400+ of my original investment of £7,037 it may be some time before I see profits again.
Another company which has had a recent problem is International Personal Finance (£IPF). I was very hopeful that this company would have a great 2014 but, unfortunately, as a result of a significant financial "fine" in Poland on Christmas Eve the share price dropped sharply. This correction was not due to the level of the fine, which was £2.40 million, but that interest rate levels in Poland could be capped as a result. The business model seems solid, so this setback should only be temporary, and so I increased my shareholding by another 300 shares at a cost of 500 per share. As they are 520 today (was 536 yesterday), that seems to have been a good move; altho' this share price is unstable.
I have built-up a small holding in the Herald Investment Trust (£HRI) in response to selling my shareholding in £AZEM. This is another long-term holding which is currently treading water.
My other 3 shares have all done exceptionally well.
Aberforth Smaller Companies Trust (£ASL) which was my first share purchase for the SIPP (oh, how I wish I'd made a larger investment now) is at 1095 which considering I bought at an average of 620 is a phenomenal return over the past 16 months; 76%. If I'd put my whole SIPP fund into only this share at the outset, my £51,684 would have grown to almost £91,000 by today! Smaller companies are where the major recovery in values will come from in 2014.
JPMorgan Mid Cap Investment Trust (£JMF) has also made a significant improvement in value. I started buying shares in this investment trust in July 2013 at about 668 and today the share price is at 780; which is an increase in value of nearly 17%.
Finally, the jewel in the crown is Optimal Payments (£OPAY). My initial purchase in this company was way back in March 2013 at an average of 168. I added a further 1970 shares at 191 thru' the summer of 2013. and another 1000 at 302 in October after a set of brilliant results. Currently at 351, I can see this share continuing to grow in stature as it exploits internet finance and builds a plateform for the coming "cashless" society. With a market capitalisation of only £530 million this company looks ripe for a takeover bid from one of the big banks.
With the SIPP now valued at £70,000 my pension fund target for 31st December 2014 is £86,000.
I have increased my shareholding in Blackrock World Mining IT (£BRWM) to 1310 shares worth approximately £6,100. These were purchased at an average price of 468.20 and I'm hoping once the world economy starts to grow out of recession that these shares will increase significantly in value. Mining stocks are generally depressed so any increased demand should trigger a movement.
The international bank HSBC Holdings (£HSBA) has has a bumpy ride these past few months, despite most commentators suggesting the share has the potential for significant gains. I have bought again on the lows (another 480 shares at 657 on 10th December) and my shareholding has now cost me an average of 697 per share. My plan is to reduce the shareholding to 1500 shares once the price breaks the 700 level.
Not all life is rosy, two of my shareholdings have recently come unstuck. Imagination Technologies Group (£IMG) dropped sharply in value on 11th December after a warning issued by the company that shipments would be lower than anticipated. My opinion was the reaction was overdone, and so I doubled my shareholding to 3000 shares. I think this company has potential to exploit any economic recovery and I'm in for the long-haul. Even so, having lost £1,400+ of my original investment of £7,037 it may be some time before I see profits again.
Another company which has had a recent problem is International Personal Finance (£IPF). I was very hopeful that this company would have a great 2014 but, unfortunately, as a result of a significant financial "fine" in Poland on Christmas Eve the share price dropped sharply. This correction was not due to the level of the fine, which was £2.40 million, but that interest rate levels in Poland could be capped as a result. The business model seems solid, so this setback should only be temporary, and so I increased my shareholding by another 300 shares at a cost of 500 per share. As they are 520 today (was 536 yesterday), that seems to have been a good move; altho' this share price is unstable.
I have built-up a small holding in the Herald Investment Trust (£HRI) in response to selling my shareholding in £AZEM. This is another long-term holding which is currently treading water.
My other 3 shares have all done exceptionally well.
Aberforth Smaller Companies Trust (£ASL) which was my first share purchase for the SIPP (oh, how I wish I'd made a larger investment now) is at 1095 which considering I bought at an average of 620 is a phenomenal return over the past 16 months; 76%. If I'd put my whole SIPP fund into only this share at the outset, my £51,684 would have grown to almost £91,000 by today! Smaller companies are where the major recovery in values will come from in 2014.
JPMorgan Mid Cap Investment Trust (£JMF) has also made a significant improvement in value. I started buying shares in this investment trust in July 2013 at about 668 and today the share price is at 780; which is an increase in value of nearly 17%.
Finally, the jewel in the crown is Optimal Payments (£OPAY). My initial purchase in this company was way back in March 2013 at an average of 168. I added a further 1970 shares at 191 thru' the summer of 2013. and another 1000 at 302 in October after a set of brilliant results. Currently at 351, I can see this share continuing to grow in stature as it exploits internet finance and builds a plateform for the coming "cashless" society. With a market capitalisation of only £530 million this company looks ripe for a takeover bid from one of the big banks.
With the SIPP now valued at £70,000 my pension fund target for 31st December 2014 is £86,000.
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