My portfolio was a mess! With many of my early investing mistakes still present in my portfolio I finally decided to bite the bullet.
I CLEANED UP!
All investors evolve over time. We learn from our mistakes and adapt our strategies accordingly. But, what should you do if past mistakes are still evident in your portfolio?
It can be a painful process, that costs money in the short term BUT if a stock’s fundamentals mean it no longer fits with your overall strategy, couldn’t the capital tied up in it be deployed somewhere else?
For me, a portfolio is like a machine. If one part of that machine is misfiring – it’s cogs are a different size or whatever- then it needs to be removed to ensure smooth operation!
So what did I do?
Firstly I sold all my shares in EasyJet.
I’ve written before on how much of a mistake EasyJet was and why it is not a stock for a dividend growth portfolio. (Capital intensive and influenced heavily by external factors such as terrorism – Not predicatble, not good!)
So there we go hitting the sell button gave me, £280 in cash from that sale – ensuring a £220 loss on my investment.
But I wasn’t done with my portfolio yet. There was still more sorting to do.
Next, I sold Carillion. If I’m completely honest, I bought this blindly after reading articles on their operations in the middle east. Articles are never a reason to buy a stock.
With this being only my third ever buy, it was bound to be flawed based on my previous investing stratergy.
Selling out got me a measly £80 after fees – ensuring a £40 loss on the position.
I then had £360 cash ready to deploy.
Adding £340 of my own capital brought my cash at disposal up to £700 and with some of my favourite stocks at low valuations I used this £700 via HL’s monthly savings option to buy stocks as follows;
Next plc – £200 (Monster cashflow, lovely dividends and undervalued)
Unilever – £200 (Well diversified and great exposure to emerging markets – Great dividend streak)
Whitbread plc – £200 ( I bought into this stock too high! But this valuation is now more reasonable – Whitbread continues to expand its operations globaly and have ambitious plans for their ‘Costa Express’ brand.)
Greggs – £100 (This stock has no debt. Not one penny! Is expanding nicely and rewarding shareholders)
I didn’t add any more positions here because quite frankly, my positions are beginning to become stretched.
With bits here and there, It came to a point where I could no longer keep track of what was going on!
If a stock I love is on sale, why not buy more instead of overstretching?
Thanks for taking the time to read this quick update. I promise a post a week from now on!