This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.
The Beginners’ Portfolio is a virtual portfolio, which is run as if based on real money with all costs, spreads and dividends accounted for.
It’s time for a portfolio valuation update, and we’ve actually been slipping back a bit over the past few months. Here’s what things look like right now:
| Company | Shares | Buy | Cost | Bid | Value | Change | % |
|---|---|---|---|---|---|---|---|
| Tesco | 159 | 305.5p | £498.23 | 295.0p | £459.05 | -£39.18 | -7.9% |
| Glaxo | 34 | 1,440.5p | £502.22 | 1,611.5p | £537.91 | £35.69 | +7.1% |
| Persimmon | 79 | 617.9p | £500.55 | 1,348.0p | £1,054.92 | £554.37 | +110.8% |
| Blinkx | 1,319 | 36.9p | £499.68 | 66.5p | £867.14 | £367.46 | +73.5% |
| BP | 112 | 434.5p | £499.01 | 500.0p | £550.00 | £50.99 | +10.2% |
| Rio Tinto | 31 | 3,132.9p | £996.05 | 3,241.0p | £997.41 | -£1.34 | -0.1% |
| BAE | 146 | 332.3p | £497.59 | 404.2p | £580.13 | £82.54 | +16.6% |
| Apple | 2 | $458.40 | £605.98 | $587.00 | £677.17 | £71.19 | +11.7% |
| Aviva | 146 | 321.4p | £470.71 | 520.0p | £749.20 | £278.49 | +59.2% |
| Barclays | 210 | 254.2p | £546.56 | 261.0p | £538.10 | -£8.46 | -1.5% |
| Cash | £92.41 | ||||||
| Initial total | £5,073.66 | ||||||
| Current total | £7,100.74 | £2,027.08 | 40.0% |
We’ve had a final dividend from BAE Systems (LSE: BA) since our last update, of 12.1p per share, so that’s added an extra £17.67 to our pot. Dividends now make up £375.51 of our total gain to date of £2,027.08, and that’s a decent amount — in fact, dividends alone have given us a 7.4% return, which is easily enough to beat cash in the bank even without any share price appreciation.
We’re on a healthy total gain on BAE, despite some wobbling in the sector, so I’m happy with the purchase.
Growth share collapse
The biggest disappointment is continuing fall in the Blinkx (LSE: BLNX) share price, which has been going on since a much-criticised negative report on the company. But the recent results reported a 30% rise in pre-tax profits. After the crash, the shares are on a forward P/E of 14.5 based on 2015 forecasts, and that’s almost bang on the FTSE’s average — and it drops to just 11 on predictions for 2016.
That’s for a growth share with a PEG of 0.8 for 2015, dropping to 0.3 for 2016! But growth investors can be a fickle bunch, and I expect a lot of the “get rich quick” crowd have leapt off the bandwagon. I expect to still be holding in 2016, and I expect the share price to have recovered a good way by then.
Builders on top
After the Blinkx fall, our biggest winner so far is Persimmon (LSE: PSN), which has rewarded us with a share price gain of 110.8% with an extra 11.8% in dividend cash — and we’re due another 70p per share on 4 July.
When I added Persimmon to the portfolio in July 2012, the whole housebuilding sector looked stupidly cheap to me, and so it has turned out with impressive growth across the sector. I reckon there’s plenty more to come, albeit at a slowing pace, in the coming years.
Breaking even on banking
That brings me to our most recent addition, Barclays (LSE: BARC) (NYSE: BCS.US). In mid-price terms, the shares have risen from 254p to 262p, which is a gain of 3.1%. But accounting for the buy/sell spread and dealing costs, if we sold now we’d realise a loss of £8.46 or 1.5%.
We’re very close to break-even, but it does illustrate how the costs of trading can eat into your profits. We’d need to see the mid-price of Barclays reach about 265.2p to cover our costs. That’s a rise of 4.4% before we get into profit, and here we’re talking of a share with a very narrow spread — for smaller cap shares with a wider spread, you’d need a much bigger gain to break even.
