June 2018: Portfolio Update.

At best June was a stand still month in what has been a fairly stagnant year when looking at the actual performance numbers of -0.25% in the month and just 1.65% for the year as a whole.

In reality, the year has set off like a runaway horse before being hauled back in by the dominant political theme of international trade, with international trade itself being under assault by the two dominant changes in recent years, these being Brexit and Donald Trump.

The constant message from markets is that they don't like uncertainty and that is exactly what we have at the moment.

Many would also have you think of our being in the May to September doldrums i.e the old adage of "Sell in May and go away until St. Ledgers day".

Anyway, changes have been instigated following the sale of Berkeley Group in the previous months. Which also proved to be a fortuitously timed sale following the Chairman's statement regarding a slowdown in profits: WebFG: When Berkeley chairman Pidgley acts 'markets should listen', analysts warn, which has seen the shares fallback by close to 20%.

But, back to the changes which have seen the introduction of Standard Chartered, and Standard Life Aberdeen. 

My hope being that Standard Chartered has turned its own restructuring corner and will begin to generate growth in its profits and dividends. Standard Life has also begun a transformation of sorts with a merge with Aberdeen funds so some synergies and a high dividend are its attractions for me.

I was anticipating a bigger holding in both but have held back a little powder and will probably add to both. As things stand, both shares have dropped slightly since my purchases.

As a result of my caution ie. not fully investing, the forward forecast yield has fallen a little to 4.75% (May: 4.89%), but as forecasts are prone to do, this will fluctuate, besides I would expect this to recover as I re-invest the remainder of my portfolio's cash.
Barring mishaps, a near 5% yield plus capital growth potential is a comfortable place to be, particularly with the mix of holdings.

I do have some slightly increasing concerns around tobacco: BAT and Imperial Brands, and SSE, but this is to be expected given the negative news flow backdrop. 
In addition, exchange rates look to be playing havoc  with the former two.
But shares don't always follow a smooth trajectory and often flit in and out of favour. 
Along those lines, its worth noting that suddenly Lloyds isn't currently held in the same favour that it has been given the speculative backdrop of Brexit and its UK centric business model of bread and butter banking.

In addition to the two "Standard" purchases, a small addition to Vodafone was also made and there were a few nice dividends from BP, RDS, and Imperial Brands. 
From a yield perspective: BP and Imperial Brands are turning into nice little dividend generators having given back a respective 31.87% and 21.53% of my original investment in dividends alone. Adding to that with capital growth of 39%: BP, and 17.7%: Imperial Brands.
Imperial was closer to 50% capital growth until the negative cloud that descended over its economies of scale and the tobacco industry as a whole. A case of secondary smoke perhaps?

Much the same flavour of uncertainty has extended into July which is shaping to be a similarly flat performance and no expected dividends.

Merchant Adventurer's Index
			Forecast	1 month	YTD	All time
	Price	% holding	Div. yield	% gain	% gain	% gain
Lloyds	63.05p	24.93%	5.38%	-0.25%	-7.36%	2.11%
Aviva	504.00p	12.71%	5.76%	-1.33%	-0.49%	40.91%
National Grid	838.40p	12.22%	5.62%	0.61%	-3.89%	73.24%
BP	578.30p	12.53%	5.19%	0.35%	10.64%	39.00%
Apple **	$185.11	10.19%	1.25%	-0.24%	11.85%	382.96%
BAT	3830.00p	2.53%	5.30%	-1.01%	-23.67%	14.18%
Imperial Brands	2822.00p	3.93%	6.80%	4.13%	-4.62%	17.70%
Royal Dutch Shell	2713.50p	2.92%	5.04%	1.36%	8.17%	5.41%
Vodafone	183.82p	1.96%	7.14%	-4.05%	-20.28%	-25.29%
SSE	1355.00p	1.30%	7.21%	-0.91%	2.65%	17.73%
Galliford Try	873.50p	1.51%	8.37%	-9.25%	20.01%	11.82%
Standard Chartered	692.60p	3.26%	2.61%	-2.10%	-2.10%	-2.10%
Standard Life Aberdeen	325.70p	3.13%	6.89%	-5.95%	-5.95%	-5.95%
Cash		6.87%	0.00%
		100.00%	4.75%
				1 month	YTD	All time
Virtual Portfolio gain (incl. Dividends)
- 1 month gain   2633.40	2626.82			-0.25%
- YTD gain         2583.68	2626.82				1.65%
- 102 month gain 1000.00	2626.82					162.68%
Unit Price - £	2.62682	(Starting price - £1)
FTSE gain (excl. Dividends)
- 1 month gain   7678.20	7636.93			-0.54%
- YTD gain         7687.80	7636.93				-0.66%
- 102 month gain 5412.88	7636.93					41.09%
Transactions:
22/06/2018	Div	BP @ 7.44p per share
18/06/2018	Div	RDS 'B' @ 35.18p per share
22/06/2018	Buy	Standard Chartered @ 707.44p per share
22/06/2018	Buy	Standard Life Aberdeen @ 346.31p
22/06/2018	Buy	Vodafone @ 187.46p per share
29/06/2018	Div	Imp.Brands @ 28.43p per share
Notes:
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: 1.32064 as at 30/06/18
*** Sterling : Euro exchange rate = £1: 1.12967 as at 30/06/18

Click to enlarge, close to return.

A quandary of a quagmire or quagmired in quandaries.

OK, so where do we go from here, in bringing things up to date, it feels like my portfolio has stagnated a little to the point where I seem to be tracking the FTSE's performance.
But, this is probably more a case of patience required and continuing to play the same long game that I have tried to follow this last 9 years.
That being said, some changes have been required and that step has made me a little more impatient and drawn into looking at my portfolio through a different set of eyes.

There are a few candidates that I have alluded to and, in turn these have opened up fresh channels with more candidate but as things stand, I need to divest some holdings in order to invest in anything new.

I've managed to start a small holding in a recovery share though, Galliford Try.

Companies like Standard Chartered also come to mind which in some respects is following a similar path to recovery that Lloyds has followed, but it is a little further behind.
I think it also has greater prospects than Lloyds given its extended international presence particularly in the Far East where it has historically been very strong.
I seem to have been an onlooker to Standard Chartered over the last 10 years or so without ever feeling the opportunity to invest has presented itself.

In looking at banking and finance, Barclays is also receiving a lot of analyst coverage for a similar turning point on its road to recovery.

Lloyds and Aviva hold a substantial and influential part of my portfolio with no plans to change.

Across the pond, I have long had a hankering for Disney shares given the ongoing ability to recycle existing content to new generations whilst also producing new content. The addition of Marvel and potentially Fox only adds to this content arsenal. In turn, all of this vast library or content is recycled in a different way through its theme parks, and potential new streaming service.

Amongst current holdings, I have been adding to Imperial Brands and National Grid, and it seems a missed opportunity not to have added to Imperial Brands more substantially.

BAT has also pulled back with Imperial Brands and Phillip Morris, but after its own big purchase last year of Reynolds, it still has lots of opportunity to increase margins and profits.

I also wonder if there should be a future proof scenario, which can now be much more focused than the tech bubble of 2000 in that the surviving giants are amongst us. What will a list of technology shares like Alphabet (Google), Amazon, Facebook, Netflix, Tesla, Apple etc. etc. look like in another 10, 20. 30 years and more?
I have already successfully held Apple, and Microsoft. Cisco was less successful though.

I have considered offloading Vodafone to raise funds. For me its transformation isn't clear or fast enough. But, the sudden rush by brokers to reiterate forecasts of 20-30% share price gains, and the Liberty global asset purchases, has given me pause, so I will wait a little longer.

A further sale of Apple has also crossed my mind with the dollar strengthening again. Whilst dividends and cash piles continue to grow, the company is heavily dependent on a possibly maturing smartphone market (which it transformed), but, if it is maturing, I'm not sure where Apple can go next. It seems not to have brought many new things to market when so much has been hinted and promised e.g. Apple TV.
Instead it continues to play cat and mouse with analysts over quarterly sales and estimates but with the recent chapter revealing a record Q2 and new share price highs, I'm still holding. Perhaps the repatriation of profits held abroad will trigger something more. 
I would like to see Apple rated on a multiple at least on a par with Google (renamed Alphabet), which is only moderately higher but would see a substantially higher share price.

SSE remains a small holding in my portfolio, weakened by political uncertainty but still delivering strongly on its dividend.

A strengthening oil price is working wonders on a recovering BP and Royal Dutch Shell

Berkeley is my current consideration, having delivered a 76% share price gain and a further 8.26% from dividends it has become a strong substantial component of my portfolio, supported by a goodly number of hold forecasts.
However, do those hold forecasts combined with an uncertain and cyclical housing market give me enough conviction to sell some or all my holding to recycle elsewhere.
Does Berkeley's concentration on London and the South create its own niche, or does this exposure to London have its potential pitfalls given the recent climate?

So that is the conundrum, a sale of Berkeley could allow me to add to my Galliford Try holding to keep a construction and housing exposure with a potentially better opportunity in recovery, and/or give me the funds to add a stakes in other companies currently attracting me with Standard Chartered, Barclays or Imperial Brands leading my list.

May 2018: Dividend pipeline

So where do we sit with dividends in the pipeline at the moment?

Looking ahead:

                                              xD               Paid
National Grid @ 15.49p       23 Nov         10 Jan
Vodafone @ 4.84p               23 Nov         02 Feb
BAT @ 48.80p                      27 Dec         07 Feb 
SSE @ 28.4p                       18 Jan         16 Mar
Apple @ 63c                        12 Feb        15 Feb
Berkeley Group @ 56.75p  01 Mar        23 Mar
RDS 'B' @ 47c                     15 Feb        26 Mar
Imperial Brands @ 59.51p  22 Feb        29 Mar
BP @ 10c                             15 Feb        29 Mar
Galliford Try @ 28p             15 Mar        06 Apr
BAT @ 48.80p                      22 Mar        09 May
Aviva @ 19p                         05 Apr        17 May
Apple @ 73c                         14 May      17 May
Lloyds @ 2.05p                    19 Apr        29 May  
BP @ 10c                              10 May       22 Jun    
Imperial Brands @ 28.43p   24 May       29 Jun

I've retrospectively added the remainder of this year's payments received to complete the picture for 2018 so far.

With BAT, Aviva, Apple, and Lloyds due to pay out in May, May is shaping up to be a good month for dividends.
And June follows along nicely with BP and Imperial Brands.

Noticeable is the short turnaround, just 3 days, between ex dividend and paid dates for Apple shareholders v. the rest of my holdings in UK plc.

April 2018: Portfolio Update.

Markets bounced back in April with the FTSE putting on a useful 6.42% in the month ahead of my own portfolio's 4.5%.

YTD remains close (both are negative), between these 2 metrics with my own portfolio still marginally ahead with -2.05%.

With the oil price rising and steady reports back to the market from Shell and more impressive one from BP, the 2 oil majors led the risers for me with gains of 14.25% and 12.32%.

These two were trailed by good high single digit gains elsewhere plus a few stragglers: Lloyds, Apple, and BAT, that continued to be negative for the month. 

Apple in the headwind of various suppliers' volume downgrades and speculation thats its own numbers would reflect a similar slowdown, as it is Apple came back to the market in May with record Q2 numbers.

Imperial Brands looks to have started its fightback and at £26.01 sits around 10% above its lows of £23.25.

Elsewhere, Galliford Try contributed a maiden dividend to my portfolio, which was closely followed by a successful completion of its rights issue, which I used to add to my holding and average down.

A couple of small monthly buys were also recorded in Imperial Brands and National Grid as I continue to try to take advantage of what I see as temporary pullbacks in the prices of both of these holdings. In effect, buying opportunities.

I continue to have itchy fingers but more on that later.

Merchant Adventurer's Index
			Forecast	1 month	YTD	All time
	Price	% holding	Div. yield	% gain	% gain	% gain
Lloyds	64.66p	26.53%	5.92%	-0.52%	-5.00%	4.72%
Aviva	529.00p	13.84%	5.51%	6.65%	4.44%	47.90%
Berkeley Group	4072.00p	11.98%	4.42%	7.47%	-2.98%	73.59%
National Grid	842.80p	12.65%	5.41%	5.09%	-3.29%	77.07%
BP	538.00p	12.10%	5.37%	12.32%	2.93%	29.31%
Apple **	$162.11	8.89%	1.42%	-1.59%	-5.98%	305.96%
BAT	3999.00p	2.74%	5.08%	-3.20%	-20.31%	19.22%
Imperial Brands	2604.50p	3.07%	7.22%	7.36%	-24.35%	12.85%
Royal Dutch Shell	2601.50p	2.91%	5.18%	14.25%	3.71%	1.06%
Vodafone	211.60p	2.09%	6.25%	9.07%	-9.96%	-16.13%
SSE	1381.00p	1.38%	6.64%	8.23%	4.62%	19.99%
Galliford Try	918.00p	1.65%	9.78%	9.94%	17.52%	17.52%
Cash		0.16%	0.00%
		100.00%	5.22%
				1 month	YTD	All time
Virtual Portfolio gain (incl. Dividends)
- 1 month gain   2422.18	2531.24			4.50%
- YTD gain         2583.68	2531.24				-2.05%
- 100 month gain 1000.00	2531.24					153.12%
Unit Price - £	2.53124	(Starting price - £1)
FTSE gain (excl. Dividends)
- 1 month gain   7056.60	7509.30			6.42%
- YTD gain         7687.80	7509.30				-2.32%
- 100 month gain 5412.88	7509.30					38.73%
Transactions:
06/04/2018	Div	Galliford Try @ 28p per share
10/04/2018	Rights	Galliford Try @ 568p per share
22/04/2018	Buy	Imp.Brands @ 2448.25p per share
22/04/2018	Buy	National Grid @ 743.04p per share
Notes:
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: 1.37594 as at 30/04/18
*** Sterling : Euro exchange rate = £1: 1.13985 as at 30/04/18

Click to enlarge, close to return.

March 2018: Portfolio Update.

March proved to be a decent month for dividends but not enough to turn the tide of market sentiment which pushed the FTSE and my portfolio down by -2.42% and -1.63% respectively.
Year to date, the pullback has now recorded -8.21% for the FTSE and -6.27% for my portfolio with more global political disruption to come from international trade wars, and political sanctions amid further breakdowns in international relations and communications.

Just 3 shares in  positive territory for the month, and those just recovery bounces: National Grid at 8.35%, SSE at 4.16%, and BP at 0.81% (yes, I'm taking 0.81%!).
But, in the year to date, not taking dividends into account (not that they would make a difference), every holding in my portfolio is down.

Dividends have contributed a positive 0.77% in the first quarter though, but going back to my opening line, not enough to turn the tide of market sentiment.

March dividends came in from SSE, Berkeley, Royal Dutch Shell, Imperial Brands and BP.

I held back on my musings to bring in Direct Line for Vodafone (Musings: Vodafone and Direct Line.), ahead of Direct Line's ex dividend date but thats not to say that I am not still considering changes.

Anyway with a number of holdings continuing to fall, I again made small additions to Imperial Brands and National Grid.
Galliford Try officially launched their cash call and the nil paid rights are currently sat in my portfolio and I expect the new shares to be showing in April's update.

My forward yield forecast now sits quite high at around 5.39%. I think that normally, I would only see that kind of figure when constructing a new portfolio so it remains to be seen if the forecasts are cut with the general pessimism that now permeates markets.
On the plus side, when markets are pessimistic its generally the best time to be buying and there are candidates in my portfolio and outside that I will continue to be interested in topping up or adding. As ever, in times like this the problem is having the funds available for all these opportunities which probably makes it a good time for those new investors with the right preparation, to start investing to build a portfolio of solid shares with solid yield records that will run along nicely for a number of years.

Worth noting as well that, with sterling recovering, there are long term targets amongst US shares that I wouldn't mind adding.

Merchant Adventurer's Index
			Forecast	1 month	YTD	All time
	Price	% holding	Div. yield	% gain	% gain	% gain
Lloyds	65.00p	27.87%	5.89%	-5.52%	-4.50%	5.27%
Aviva	496.00p	13.56%	5.88%	-1.90%	-2.07%	38.67%
Berkeley Group	3789.00p	11.65%	4.75%	-1.69%	-9.72%	61.53%
National Grid	802.00p	12.46%	5.68%	8.35%	-8.11%	71.44%
BP	479.00p	11.26%	6.03%	0.81%	-8.36%	15.13%
Apple **	$167.78	9.44%	1.37%	-6.61%	-4.46%	312.53%
BAT	4131.00p	2.96%	4.92%	-3.83%	-17.68%	23.16%
Imperial Brands	2426.00p	2.88%	7.76%	-7.37%	-27.68%	5.37%
Royal Dutch Shell	2277.00p	2.66%	5.92%	-1.90%	-9.23%	-11.54%
Vodafone	194.00p	2.00%	6.81%	-4.79%	-17.45%	-23.11%
SSE	1276.00p	1.33%	7.18%	4.16%	-3.33%	10.87%
Galliford Try	835.00p	1.18%	10.75%	-9.04%	-2.02%	-2.02%
Nil paid rights	267.00p	0.13%
Cash		0.63%	0.00%
		100.00%	5.39%
				1 month	YTD	All time
Virtual Portfolio gain (incl. Dividends)
- 1 month gain   2462.37	2422.18			-1.63%
- YTD gain         2583.68	2422.18				-6.27%
- 99 month gain 1000.00	2422.18					142.22%
Unit Price - £	2.42218	(Starting price - £1)
FTSE gain (excl. Dividends)
- 1 month gain   7231.90	7056.60			-2.42%
- YTD gain         7687.80	7056.60				-8.21%
- 99 month gain 5412.88	7056.60					30.37%
Transactions:
16/03/2018	Div	SSE @ 28.4p per share
22/03/2018	Buy	Imp.Brands @ 2349.75p per share
22/03/2018	Buy	National Grid @ 761.62p per share
23/03/2018	Div	Berkeley @ 85.24p per share
26/03/2018	Div	RDSB @ 33.91p per share
28/03/2018	Nil Paid	Galliford Try @ 297p per share
31/03/2018	Div	Imp.Brands @ 61.53p per share
31/03/2018	Div	BP @ 7.17p per share
Notes:
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: $1.40137 as at 31/03/18
*** Sterling : Euro exchange rate = £1: $1.13711 as at 31/03/18

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