Wow, that's been an exciting barnstorming start to the year.
January's momentum has continued into February (and seemingly the first day of March) enabling the FTSE100 to put on 3.34% after Greece renegotiated its credit agreements and secured approval from the EU/IMF/ECB Troika for another tranche of bailout funds which together enabled the country to avoid default.
Its been a busy reporting season but the good feeling has also been extended to my portfolio with Rolls-Royce and Apple leading the charge with gains of 10.67% and 16.92% respectively.
Rolls-Royce powered on after achieving in excess of £1bn of profits for the first time (Rolls-Royce Powers through the £1bn Profits barrier for the first time. ) and Apple's good feeling was extended following its own record busting numbers reported in January (Apple blows away Q1 Forecasts with Record Quarterly Sales and Profits).
Recent speculation and anticipation of iPad3, brought on by an Apple announcement, also helped.
This contribution enabled the portfolio to put on 5.67% in the month and 7.89% in the year to date. Recent speculation and anticipation of iPad3, brought on by an Apple announcement, also helped.
Dividends were also received from Vodaphone, IG Group, and Invesco Perpetual.
Disappointments in February have been confined to IG Group, and William Hill, with the former seeming to have lagged the rest of the portfolio in 2012 despite good results.
It would seem that doubts remain over the company's future growth and profitability despite its track record and market position, with fears that "becalmed" markets may subdue client activity (volatility seems to aid client activity), fears over the introduction of a tax on financial transactions, and recent broker downgrades to hold from buy.
Citi in particular have a track record of downgrading the shares prior to them extending their gains. Long may that continue!
For William Hill, following recent internal management issues (William Hill "back online".), it has been a decent bounce back in the run-up to a decent looking set of results.
So it is a little disappointing that, post results, it has lost some of those gains but that seems to be a common market theme at the moment which I am putting down to profit taking into the markets current rally.
| Merchant Adventurer's Index | |||||||||||||||
| Forecast | 1 month | YTD | 26 mnth | ||||||||||||
| Price | % holding | Div. yield | % gain | % gain | % gain | ||||||||||
| R-R | 814.00p | 32.40% | 2.38% | 10.67% | 9.04% | 68.36% | |||||||||
| National Grid | 641.50p | 17.00% | 6.12% | 1.50% | 2.64% | 18.19% | |||||||||
| Aviva | 368.30p | 8.08% | 7.26% | 5.41% | 22.44% | 5.20% | |||||||||
| Inv Perp. High Inc. *** | 530.18p | 6.52% | 3.75% | 3.00% | 3.20% | 25.48% | |||||||||
| BP | 492.40p | 4.34% | 4.06% | 4.58% | 6.93% | 13.12% | |||||||||
| Apple ** | $542.44 | 5.23% | 0.00% | 16.92% | 30.59% | 180.89% | |||||||||
| IG Group | 442.40p | 2.82% | 5.03% | -6.61% | -7.23% | 47.04% | |||||||||
| Morrisons | 290.00p | 2.20% | 3.71% | 1.40% | -11.10% | 14.61% | |||||||||
| BG Group | 1517.50p | 2.67% | 1.08% | 6.49% | 10.24% | 39.21% | |||||||||
| William Hill | 224.50p | 2.52% | 4.17% | -0.09% | 10.70% | 31.30% | |||||||||
| General Electric ** | $19.05 | 2.34% | 2.64% | 0.18% | 3.71% | 22.22% | |||||||||
| Microsoft ** | $31.74 | 2.47% | 2.05% | 5.75% | 19.21% | 29.05% | |||||||||
| Centrica | 304.00p | 2.30% | 5.02% | 3.61% | 5.08% | -3.74% | |||||||||
| SSE | 1290.00p | 2.14% | 6.17% | 5.48% | -0.08% | 12.08% | |||||||||
| Vodafone | 169.35p | 1.98% | 7.59% | -0.85% | -5.34% | 5.10% | |||||||||
| Tesco | 316.10p | 1.52% | 4.79% | -1.10% | -21.65% | -20.76% | |||||||||
| BAE Systems | 312.70p | 1.88% | 5.99% | 1.59% | 9.68% | -2.05% | |||||||||
| Cash | 1.60% | 0.00% | |||||||||||||
| 100.00% | 3.86% | ||||||||||||||
| 1 Month | YTD | 26 Mnth | |||||||||||||
| Virtual Portfolio gain (incl. Divs) | 5.67% | 7.89% | 52.08% | ||||||||||||
| FTSE gain (excl. Divs) | 3.34% | 5.37% | 8.47% | ||||||||||||
| - 1 month gain 5681.61 - 5871.51 | |||||||||||||||
| - YTD gain 5572.28 - 5871.51 | |||||||||||||||
| - 26 month gain 5412.88 - 5871.51 | |||||||||||||||
| Transactions: | |||||||||||||||
| 03/02/2012 | Div | Vodaphone @ 3.05p per share | |||||||||||||
| 03/02/2012 | Div (Sp) | Vodaphone @ 4p per share | |||||||||||||
| 28/02/2012 | Div | IG Group @ 5.75p per share | |||||||||||||
| 28/02/2012 | Div | Invesco Perp @ 8.36p per share | |||||||||||||
| Notes: | |||||||||||||||
| * US Dividends are adjusted for exchange rate and 15% withholding tax | |||||||||||||||
| ** Sterling : Dollar exchange rate = £1: $1.594 as at 29/02/12 | |||||||||||||||
| *** Invesco Perpetual Accumulation units (Dividends re-invested). Yield shown is based upon most recent payments. Visually the performance to date is shown in the chart below with my chosen benchmark, the FTSE100, registering 3.34% in the month and 5.37% year to date (excl. dividends). And, as mentioned already, my portfolio's index, with dividends re-invested, has shown a February gain of 5.67% and 7.89% year to date.
Not sure how long this momentum will continue though, or when markets will next hit a speed-bump to jar the recovery but it seems clear that contagion fears will continue until the EU gets enough firepower together to give markets confidence that it can withstand most foreseeable shocks, and, more importantly, really wants to. The heavy demand seen in the ECB's 2nd emergency loan auction to the banking industry also suggests that liquidity continues to be a threat to the system and, as demonstrated by recent banking results, there is probably still a level of debt risk contained within bank balance sheets. If debts have not yet been fully disclosed, this raises an uncomfortable question for me as to the motives of individual banks: Are debts being managed with the possibility of recovery or are they merely being drip fed into annual results to facilitate bonus schemes. It does make it really difficult to trust the integrity of the banks management when the scars of the credit crunch are still raw. Slowing Chinese growth and any doubts (and there will be some) over a US recovery might also give markets pause. I'm also assuming that there is still no-one with a full understanding of the possible long term effects from quantitative easing and how much damage may have been inflicted upon long term savings and pensions. Markets don't rise without pause and confidence is often fragile when tested making it capable of swinging wildly with little justification. But that can also be when opportunities present themselves. Links to Portfolio updates: - January 2012: Portfolio update. - December 2011: Portfolio Update. - Portfolio Updates. | |||||||||||||||
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