Portfolio Update: Strategy and future

2025: it's a big year for me, as I'm 66yo (or hope to be) on 8th November 2025 and will be able to draw on my Old Age Pension from the government.  My current plan is to commence drawing my pension from my 66th birthday - as there's no benefit in delaying payment - but, also, to carry on working at least until Easter 2026.  My current employment isn't too taxing on the brain-cells, and I enjoy the camaraderie of the office: I'm also paid a decent salary. 

The downside to staying in full-time employment is the lack of paid holidays, so I'm planting the idea in my manager's mind that I could be a useful "mentor and assessor" on a part-time basis. 

Will that work? Who knows?

What I'm not going to do is a paid hobby: nobody values skills anymore, and having visited a number of craft fairs on the run-up to Christmas, and watched skilled craft-makers struggling to sell their (sometimes) high quality goods for little more than cost-price, there's little point in doing that.

I've been writing my horseracing blog for 15 years (I've been following horseracing for nearly 60 years being introduced to the sport by my dad when I was a 7yo), and while I know I'm good at reading the form and spotting horses that are better than they have yet to show on the track (the only way to win at the sport is to spot potential earlier than anyone else), the number of hours that you have to put in versus the rewards do not merit the effort involved.  As such, this jumps season (which ends in April), will probably be my last one writing the horseracing blog. 

That's not to say I'm abandoning blog writing, I really enjoy it. The whole experience of writing gives me the chance to examine my thoughts, and set out my plans in a manner to accomplish them. The Pension Builder blog will continue unabated, in fact I can see it becoming more detailed.  The "upsides" of the Pension Builder blog are far greater than having £20 on a 6/1 chance at Haydock come in 1st. 

Having missed the initial target of the blog - £500,000 by my 65th birthday - I'm re-assigning my goals. I'd like to have a SIPP fund value of £325,000 on 1st May 2026.

From that, my intention is to drawdown approx 7.50% per annum (£24,000) which - after tax - will bolster my Old Age Pension by £20,400pa. I think that would provide a comfortable retirement.  My SIPP goal will be to grow the fund to meet that withdrawal, and some.  I expect we shall have inflation of an average of 5% for the foreseeable future, and endeavouring to grow the SIPP value to be able to cover that will be vitally important.

At the moment, I'm having an in-depth review of my SIPP holdings, and can't advise what changes I shall be making just yet. However, I am indebted to the recent post by Cassini, writer of the "Green All Over" blog - the link is on the right - as that resulted in a spike in readers of this blog. I hope some of those who visited, enjoyed what they found and will return again. What I found particularly interesting was the overlapping of our personal circumstances (we're both, reading between the lines, around the same age and soon to be reliant on our pension funds) and investment strategies. We are both on the lookout for multiple "baggers", we both use index-trackers as the bedrock of the SIPP, and we both have a element of "play" money for more speculative investments which may (or may not) come off. I always find synergies like this interesting: is it because we are "boomers", is it something to do with the way we were brought-up and the values we inherited, could it be just coincidence? 

That's it for now, lunchtime is over - back to the grindstone. 

SIPP Update - 16th December 2024

There was a bit of a technical glitch with the previous blog - the screenshot of the portfolio didn't work. 

I've had a play-around with the settings, and I've managed to sort things out - but, unfortunately, I've lost the previous screenshot from 5th November.

As you can see, there's been a few changes. 

I've sold both holdings in insurance companies - Aviva and Legal & General. As it happened, I sold LGEN too early and missed the price spike to 240p, but the SP has already slipped to under 230p. Yes, both these companies are high yield payers, but the SP in both companies is on a slow downward trajectory.

Generally, I've had a clear-out of the high yield shares: out has gone City of London IT (CTY), Lloyds Bank (LLOY), National Grid (NG.), Sirius real Estate (SRE), Taylor Woodrow (TW.), and Unilever (ULVR).

These have been replaced with cigarette companies: British American Tobacco (BATS) and Imperial Brands (IMB). Both have provided very solid gains in their SP  - BATS up 10.5% and IMB up 13.7% - and they both are high yielders. I'm happy having them in the portfolio, I should have brought them in ages ago.

I've increased my holding in TP ICAP Group as momentum builds in the share price - I'm now showing 15% gains.

As a result of Trump winning the US presidency - I'm no fan of his by-the-way - I've invested a 12th of my portfolio value into the S&P 500 via iShares. I've no idea which way the US stockmarket will go, but (if it goes up substantially) I don't want to miss out.

Then there have been some speculative moves:-

Seplat (SEPL): this Nigerian oil company could be sitting on a literal "gold mine", and (fingers crossed) there should be a significant SP move in the coming couple of months.

Helium Exploration (HEX): this is risky - I've no idea about this one, and the "golden rules" of investing are don't put money into things you don't understand - but my gut feeling is that there is money to be made here.

Finally, Palantir (PLTR.US): before last month I'd not heard of this company, and then my 22yo son (he's a mathematics graduate) gets a job offer with a salary attached that makes my eyes water. This company could be the next Amazon and Tesla rolled into one. 

Hopefully, the next time I post I will be reporting some substantial gains. 

5th November - SIPP Update

Time for an update.

I started writing this blog last week, but I wanted to put in too much detail (I will endeavour to expand later this month) and events overtook me, so let's just get this done!

Unfortunately, I have to report that the SIPP has just been going sideways for the past 3 months. 

At my last posting, I held positions in 13 shares totalling a portfolio value of £256,270. 

Probably more out of frustration at the lack of growth, I have been re-structuring the portfolio in the past few weeks.

The current situation is as below:

 

Back in the game! SIPP Portfolio 19th July 2024

After a couple of years on the sidelines I'm back in the market trying to make the most of a depleted SIPP in preparation for retirement day (planned to be Easter 2026).  

When I last posted on this blog, the SIPP was valued at  £271,068 - down from a peak of £307,654 on 8th November 2021.

That decline in value didn't stop on 30th July 2022.

By 31st October 2022, the SIPP value was down to £246,678.

There was a small recovery over the winter to £257,899 by 31st January 2023.

However, the SIPP value went sideways then, dropping to £251,878 by 30th April 2023.

That's when it took another hit (mainly due to the collapse in value of KWS - Keywords Studios), and the value on 31st July 2023 was just £230,970.

As the year progressed things didn't get any better, and by 31st October 2023, the SIPP value was down to £221,197; by which time I was thinking "why didn't I sell the whole portfolio and convert into cash last July?" Oh, for the benefit of hindsight! I had actually sold-off 40% of the portfolio into cash in June 2022, so it could have been worse (or, could it?). 

That was the bottom, and by 31st January 2024 the SIPP value was £234,476 - still nearly 10% down on the previous January value, and nearly 24% down on the all-time-high. 

That was the signal for me to reinvest back into the market, and I've been 100% all-in since 1st February 2024.

Currently, the SIPP portfolio is as per the screenshot below.

The plan is to position the portfolio into more of an income generator than a pure growth vehicle.

As can be seen from the above when comparing the portfolio to previous screenshots from 2022, I caught a massive cold from KWS and Segro (SGRO).

There's a few reasons for posting this blog. 

1) it's fairly obvious now than some of my success at finding decent shares in the past has been pure luck. 

2) buying the right shares is only part of the problem - it's knowing when to sell!  I hung-on to shares in companies whose fortunes had transformed for the worse, when I should have been more mercenary and cut & run. That misguided loyalty and blind faith cost me many tens of thousands of pounds.

3) In not writing the blog, mainly due to my despondency over the falling value of the SIPP, I took my eye off the ball.  There is no good reason for this, I should have spent a weekend analysing the situation and (if nothing else) just lumped the portfolio into a Global Growth Investment Trust like JGGI. As per the chart below, if I had sold my entire portfolio in July 2022 (when valued at around £270k) and put the whole lot into JGGI at the (then) SP of 425p, then my SIPP would have a value today at around £350k. Again, oh for the benefit of hindsight - but that probably would have been a sensible strategy for an investment novice like me. 

I will be back in the coming weeks, with - hopefully - better news. 

Saturday 30th July 2022

 It has been a very difficult 6 months for the world: war, famine, climate catastrophe, inflation - and it's not over yet.

The SIPP Portfolio is down: no surprise there! 

Value of Equities = £266,877.60

Value of Cash = £4,186.22

TOTAL = £271,068.82

On the 1st January, the total value was at £309,757 and in the previous 4 months (1st Sept - 31st Dec) UK equities had been looking flat: no impetus, and nothing on the horizon to produce a better return.  In hindsight, I should have trimmed back at least my UK equity exposure.

Selling Diploma (DPLM) for an average of 2900 in January was a good move, as the SP dropped below 2250 and now looks to be on a recovery mode. And selling GB Group (GBG) for an average of 695 was another good move, as the SP dropped to just under 400 in early July. This is another company that "could" be on a recovery mode, but looks very cheap now and ripe for a takeover bid.  It's highly likely that I will take-up shares in both of these companies in August. 

SIPP value as at 1st January 2022

 Happy New Year!

For sure, 2021 has been a year to remember. This time last year, the SIPP value was £254,298 - so after deducting the annual contributions of £12,000 the total growth in the year has been £43,459 or 17.08%

The sole transaction in the month of December was the sale of Chelverton UK Equity Growth (I was using another quoted Chelverton fund - SDV - to identify the holding). The reason for the sale was that the UK market appears to have lost impetus, and while some investment houses are "bullish" about UK equities - I'm not. Things could all change should the current Prime Minister (or Government) be replaced, but with the current incumbents remaining in-charge confidence is low. An illustration of the weakness of UK equities is shown in the BlackRock Smaller Companies IT (BRSC) graph for the past 12 months (see below).  Up until the end of August the SP was growing rapidly -then September was a bit of a disaster.

I've moved the funds into the infrastructure Investment Trust 3i Infrastructure, which while not being a likely growth investment, is more of a defensive investment against future downturns. 

It hasn't all been doom & gloom, look at the SP performance of Diploma (DPLM) - up 52% during the 12 months of 2021; and while this company was also affected by the September dip, the recovery has been greater than the loss.

The star of the portfolio continues to be Segro (SGRO) - see the 12 month chart below.

My initial purchase of Segro share was in August 2014, when I bought 900 shares at 356p, and they are now 1431p - phenomenal performance and it appears to show no signs of stopping any time soon.

By this time next year, I'm setting target value of over £360,000 for the SIPP; fingers crossed I will achieve it.

SIPP value as at 1st December 2021

 One month on from the birthday blog and it has been a period of consolidation.

Unfortunately, a new variant of Covid has developed and that has put a dampener on the markets, taking a bit of the froth of the recent growth away.  Fingers crossed, we don't go into another spiral of falling values that hit the markets in Feb-March of 2020; but maybe the markets are more resilient now?

It's not a time to be doing anything drastic (just yet), and I'm on the lookout for where the next direction is coming from - so you may see a few share purchases in the next few months as I endeavour to reposition the SIPP portfolio for more growth.