LM portfolio as at 15/01/2021:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM026 LM026-2 |
ETF | 14/10/2020 09/12/2020 |
£2160 | £2330 | 7.51% |
| LM027 | ETC | 09/11/2020 | £1060 | £990 | (6.67%) |
| LM028 | 'No specific industry' | 16/11/2020 | £1010 | £950 | (5.47%) |
| LM029 | ETC | 23/11/2020 | £1030 | £1090 | 5.98% |
| LM030 LM030-2 |
ETC | 23/11/2020 13/01/2021 |
£2030 | £2150 | 6.12% |
| LM031 | Mining | 30/11/2020 | £1020 | £1210 | 18.38% |
| LM032 | Industrial Transportation | 07/12/2020 | £1040 | £1200 | 15.96% |
| LM033 | Health Care Equipment & Services | 04/01/2021 | £1050 | £1010 | (3.96%) |
One change this week - another unit added to LM030 on Wednesday so I fully expect this position to now lose ground. The underlying asset has increased 20% in a short amount of time so a retracement isn't out of the question.
Position Size
In Jack D Schwager's "Market Wizards" (a fantastic read by the way) one of the interviewees says that you should never risk more than 5% of your bank on any one idea because it means you can be wrong 20 times before you go bust.
Makes a lot of sense to me.
Though my usual initial investment of £1,000 is a little more than 5% of my bank I am not investing in any penny shares or companies with small market caps so the risk of any of the shares/ETFs I've purchased going to zero is likely quite small.
What I'm trying to say is that although I'm investing more than 5% per idea, I'm confident that the overall risk per idea is less than 5% because it's unlikely I'll lose all the money I put in any one share even if we repeat the massive falls seen last in March 2020.
Plus, as I hope I've demonstrated in the last 12 months, I have no problem selling a share if it doesn't rise.
My awful (almost 50%) loss in Taylor Wimpey being a prime example. I'm not going to hold on to an investment in the hope it goes up again. That isn't investing, it's gambling.
TW. gapped down massively before I had chance to close for my usual sub-20% loss. During all the COVID market falls, this share was happy to drop 25% day after day. By the time I logged in on the day I sold it, it had dropped well past my cut off point so I got rid of it immediately. Holding on to a falling share and hoping it will come back is too stressful. I took the loss and moved on.
At present the main risk to achieving the growth I need is failing to get hold of £2k needed to max out the Lifetime ISA by the 5th April. We bought a new house at the beginning of December which swallowed up all our spare cash. Then, being self-employed, I have to pay my tax at the end of this month.
Whenever I get pushed into a corner in this way I use an old trick I read somewhere (may have been Rich Dad Poor Dad) and instead of saying "I can't afford this" I will think "how can I afford this?"
I'm expecting I'll find a way to pay my tax before the end of this month and then also top up my LISA by the end of March. Then I just need the stockmarket to do its job and continue to grow!
Prior to the house purchase I'd managed to build up a reasonable amount of savings in one of the few savings account which still pays interest.
Of course, this money was depleted in order to complete the house purchase. Current total in savings (and when I say 'savings' I mean readily-available cash, also known as an emergency fund) is around £650.
This will continue to build over the year.
The small act of closing my cashback credit card helped a great deal here. Firstly it forced me to create and stick to a budget and secondly it means that I need to use cash for all purchases.
I haven't added any debt in my life (mortgage aside) since the end of April 2020. I paid off my car loan 6 months early in May 2020.
Fewer debt repayments coupled with a decent monthly plan of where my money is going means I have money left over each month to add into savings. Being locked down also helps...