This article is the latest in a series that aims to help novice investors with the stock market.The Beginners Portfolio is a virtual portfolio, run as if based on real money with all costs, spreads and dividends accounted for. Transactions made for the portfolio are for educational purposes only and do not constitute advice to buy or sell.
Although 2015 has been a rough year for investors with the FTSE 100 down 3.8%, the Beginners Portfolio has actually done reasonably well. Since myend-of-2014 updateon 18 December that year, the portfolio value has risen from 6,098.41 to 6,811.57. That includes dividends and all costs, such ascosts wed incur if we sold it all today,and representsa gain of 11.7%, taking its total gain since inception to 34.3%.
Heres the current state of affairs, with prices at market close on 30 December:
| Initial investment | 5,073.66 |
|---|
| Company | Shares | Buy | Cost | Bid | Value | Change | % |
|---|---|---|---|---|---|---|---|
| Glaxo | 34 | 1,440.5p | 502.22 | 1,383.5p | 460.39 | -41.83 | -8.3% |
| Persimmon | 49 | 617.9p | 352.21 | 2,037p | 988.13 | 662.92 | +204% |
| BP | 112 | 434.5p | 499.01 | 355.0p | 387.60 | -111.41 | -22.3% |
| Rio Tinto | 31 | 3,132.9p | 996.05 | 1,985.5p | 597.14 | -398.92 | -40.0% |
| BAE | 146 | 332.3p | 497.59 | 505.0p | 727.30 | 229.71 | +46.2% |
| Apple | 14 | $65.50 | 605.98 | $107.6 | 1,000.34 | 394.36 | +65.1% |
| Aviva | 146 | 321.4p | 470.71 | 518.5p | 747.01 | 276.30 | +58.7% |
| Barclays | 210 | 254.2p | 546.56 | 220.7p | 453.57 | -93.09 | -4.5% |
| ARM | 80 | 913.5p | 744.46 | 1,045p | 826.00 | 81.54 | +11.0% |
| Sirius | 3,440 | 13.75p | 485.33 | 14.75p | 497.40 | 11.97 | +2.5% |
| Cash | 126.80 | ||||||
| Current value | 6,811.57 | 1,737.91 | +34.3% |
Big winner
The portfolio owes the bulk of its success toPersimmon (LSE: PSN), whose shares have more than trebled in value since being added to the portfolio in July 2012, to 2,037p. The whole housebuilding sector seemed insanely undervalued at the time, and all of Persimmons major competitors have seen their share prices soar since the depths of the recession. In fact, once we consider the special dividends Persimmon has also been paying, were up to a 3.4 times gain!
What I really like about Persimmon as an investment is that it could still have a fair bit further to go. Weve had years of great EPS growth already, yet the Citys pundits are expecting a further 28% this year, followed by 10% next, which would drop the P/E to under 12.
Mooted dividends are strong at 5.2% and 5.4% for 2015 and 2016, respectively; the company is sitting on a large land bank that it built up when land was going cheap; and demand for its new homes seems insatiable. Persimmon is definitely a keeper.
Loser!
At the other end, weve had a disastrous year fromRio Tinto (LSE: RIO), whose price has continued to slide. Its down 34% this year to 1,985p, and down 40% since we added it to the portfolio although receiving some dividend cash has alleviated the loss a little, leaving us 30% down.
What was wrong with Rio Tinto as an investment? Well, I really didnt see commodity prices remaining so low for so long, and where I expected to see a bottoming and some gradual recovery, weve seen a further slide instead. To a large extent thats due to slowing Chinese demand, and I certainly hadnt understood the extent of that countrys structural problems and how little genuine free market reform was actually happening.
As a slight comfort, Rio isnt the worst-affected miner by some way, and it should do well when a recovery finally does happen and at this stage, I think I need to hold on to it.
Honourable mentions
In addition to these two, other important movers includeApple Inc, down 2.8% over the year but up 65% since purchase (73% including dividends);Aviva, up 7.5% on the year and 58.7% since purchase (74% with dividends); andBAE Systems, which has gained 7.4% in 2015 and 46.2% since purchase (66% with dividends).
On the whole, its not been a bad year and heres wishing you all a prosperous year in 2016!
To enjoy past articles in the series,please visit our full archive.
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Alan Oscroft owns shares in Aviva. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has recommended ARM Holdings, Barclays, and GlaxoSmithKline. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
