Searching for the Sugar, man!

My first foray into investing

6/1/20253 min read

Trading Lisa -


Contributions to date - £12,400

Lisa bonus to date - £3,000 (£100 outstanding)

Current portfolio value - £16,481.62

Gain on investments - + £1,181.62

Total gain £4,181.62

Total increase 33%


Blog -


Welcome to the blog. My first attempt at documenting my journey into investing as a complete novice.


The intention for my lifetime ISA was to have a secondary pension pot which I could take at 60 but still have access to if I ever needed it in an emergency. If you don't know about LISA’s you can pay in up to £4,000 a year and the government will top up 25% or £1,000, you can withdraw the money but have to pay back 25% on the total sum which works out at around a 6% loss so not too bad if it's really needed. Otherwise it just sits there until it's taken, in my case in 23 years time. You can open one up to the age of 40, pay in and get the bonus until 50 and take out from 60.


Ultimately my other pensions are managed professionally so my LISA was always positioned to be a personal portfolio of stocks. However after a rather frustrating loss on an individual share after the Liz Truss meltdown budget I stepped out for a while. In reality I should have swallowed my pride and moved on but oh well, time is a healer, although I still can't get back to eating lettuce.


So on to stock picking. It's a mad idea on the face of it, a complete novice, picking a basket of stocks, when I could just track the SandP 500, the FTSE 100 or any other major index. That's was my position for a long time and I did it simply for fun, I do like a gamble and I was aware I was speculating. However learning about stockopedias stock ranks, the NAPs portfolio and other supposedly successful British investors like Robbie Burns changed that somewhat.


The stockopedia stock ranks particularly were a game changer for me. Over 10 years their diversified portfolio of 20 stocks held in their NAPs portfolio returned 250% compounded, excluding dividends! So if we establish this as the benchmark it's reasonable to suggest, I would argue, that any other investment strategy is inferior and not following a similar approach would result in a net compatible loss of earnings.


And how is it done? By investing in quality, value and momentum driven stocks as highlighted by their screens, often small cap British equities that have outperformed the likes of Google and Amazon.


So that's my plan, I just need to get on with it. The share dealing fees and the spreads are difficult to contend with and seem to wipe anything from 3-5% off any initial purchase. So my bag of stocks is likely to be limited to 10 as reducing my capital into 20 equal parts massively increases my costs at the moment. We will see if that works in my favour or against. However I will follow the rules of picking stocks from a diversity of sectors, with a market cap of 20m plus, (probably 50m+) rebalancing once a year but I caveat that I will review on any material change to the business and sell on a profit warning. I'm also going to take a preference for any stocks that rate highly but are showing signs of a turnaround. My first two picks highlight that strategy.


So here are my current picks -


Technology


Kooth

Purchase price 153

Current price 173


Consumer defensive


Wynnstay

Purchase price 334.75

Current price 335.75


Pending entries


Consumer cyclical


Smiths news


Telecoms


Vodafone


Industrial


McBride (it's listed as consumer but it manufactures cleaning products, surely that's industry??)


Utilities


Yu


Metals


Serabi Gold


Finance

not sure yet?




My only other position this year was a UK treasury gilt with a yield to maturity at purchase of around 4.2%. I put £13,000 into this and luckily avoided the market turbulence of Trumps liberation day, I know many people panic sold. However the bond market also seems to be uncharacteristically turbulent at the moment so I figured I may as well be in stocks. I sold after 5 months for a £300 profit circa 2.5%, it's not earth shattering but I can't complain.


After my new investments are made I will be sat on a paper loss due to trading fees so I will report back soon on progress, or lack thereof. If I can replicate the portfolios mentioned I will hit £50k in 5 years. I call this strategy get rich or write a blog whilst trying.