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Forget Neil Woodford! Here’s how to build your own portfolio of FTSE 100 dividend growth stocks

Forget Neil Woodford? That’s not easy, as a constant stream of revelations about his investment fund mismanagement come to light.

Disillusioned investors will be looking for new funds to put their money into and, if you’re in that position, here are three to consider. But what if you don’t want to put your faith in another fund manager? If somebody with a stellar reputation like Woodford can come unstuck, anybody can. So why not go it alone?

Do it yourself

It’s perfectly possible to build a balanced portfolio of stocks and shares, just like Woodford did. And by running it yourself you know your money will never be ‘gated’, the unhappy fate for those who find their money trapped in LF Woodford Equity Income. This money is inaccessible while the fund remains suspended. But you’re still paying fees for the privilege of letting Woodford sort out a mess of his own making.

Naturally, building your own portfolio is risky. As an amateur investor, you don’t have minions to help you discuss your stock choices and avoid making dodgy calls. However, you can reduce these risks by diversifying between a dozen or more different stocks, so if one or two fail, others may offset your losses by rising.

Passive action

You could start by investing in an index tracker fund, such as the iShares Core FTSE 100 (ISF) exchange traded fund (ETF). This would make a great underpinning for your portfolio and has the benefit of rock bottom charges of just 0.07% a year. This means you get to keep nearly all of your income and growth rather than hand it to an overpaid fund manager.

Combine this with an international tracker, such as the Vanguard FTSE All-World UCITS ETF (VWRD), you have built yourself a one-stop portfolio.

It’s fun picking and choosing your own shares though, and you could then branch out into individual stock picking, starting with one or two FTSE 100 blue-chip, dividend-paying stocks.

This is the sector where Woodford made his name, before he went off-piste with risky smaller and unquoted companies. Here are two dividend growth stocks you could consider to get yourself underway.

Remember, these are only tips, the decision is ultimately down to you. You’re the boss now.

Think long

You have one big advantage over managers such as Woodford – you don’t have to answer to anybody. Managers have to report their progress every quarter, half-year, or year, which can encourage short-term thinking. Instead, you can invest for the long-term, building a portfolio of stocks to deliver income and growth over 10, 20, or 30 years, depending on how long you have until retirement.

You will make mistakes. But by investing in different stocks, sectors and regions, you can limit the damage. Motley Fool is packed full of free stock tips and ideas for people just like you, who trust themselves to invest in their own futures. Our tips are just suggestions, the decision to buy or sell is ultimately down to you. That’s what being in charge of your future is all about.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.