Our investor this week is Andy, who is in his early thirties and has been investing since he left university around a decade ago.

A history graduate, Andy puts his initial interest in finance and markets down to his father who is an accountant.

‘I can’t remember exactly what the trigger was,’ says Andy, ‘but around the time I was leaving university the economy was still just coming out of the global financial crisis and it felt as though there were lots of cheap stocks to choose from.’

CHANGE OF STRATEGY

To begin with, he opened a spread-betting account and punted the markets with small amounts of spare cash before deciding that investing in individual UK stocks was ‘probably a more sensible way to build my long-term wealth’.

He describes himself as ‘not a strict value investor but more of a GARP (growth at a reasonable price) guy’, with the result that he tends to look for firms where the market is underestimating either the intrinsic value or the growth potential.

‘Like a lot of people, I think my very first purchase was Vodafone (VOD),’ says Andy, but after a while he shifted his focus to income shares like National Grid (NG.) and SSE (SSE) along with blue-chips like Diageo (DGE) and Reckitt (RKT) with the aim of reinvesting a steady stream of dividends to get the benefits of compounding.

‘I also remember Pan African Resources (PAF:AIM) as an early investment, which recently came back into my portfolio on account of the gold price being high, although I try to avoid miners generally as they are too specialist for me and I don’t really have an “edge” when it comes to the sector,’ he confesses.

However, compounding dividends didn’t really satisfy his interest in spotting ‘hidden value’, so he changed tack to a slightly more diversified and blended approach to try and achieve more capital growth.

DIVERSIFIED PORTFOLIO

His current portfolio consists of around 25 holdings, with a broad spread of funds, investment  trusts and individual stocks.

Among his fund and trust holdings are three global equity funds – the HSBC FTSE All-World Index Fund (BMJJJJ3), the Artemis Global Income Fund (BHL2C74) and Murray International (MYI) – as well as a UK equity income fund, a UK micro-cap fund, a US small-cap fund and a European large-cap equity fund.

His equity holdings are equally diverse, with a spread of UK asset managers – the Martin Gilbert-backed AssetCo (ASTO:AIM), Polar Capital (POLR:AIM) and private equity specialist Pollen Street (POLN) – followed by a couple of FTSE 100 large-caps, a couple of big financial stocks, two small-cap biotechs and a smattering of renewables, infrastructure, shipping and gold mining companies.

His plan is to eventually invest into more US and overseas-listed shares as well as up to 5% of his portfolio in what he calls ‘highly speculative shares to try and capture some multi-baggers.’

Andy tends to look for growth at a reasonable price, and among his current holdings, ‘Flutter (FLTR) is the only stock which I bought on a high PE (price to earnings) ratio, relatively speaking.’

FINDING IDEAS

He reads fairly widely on investing, and recommends The Zulu Principle by Jim Slater, How To Make A Million – Slowly by Lord John Lee, Investing Against The Tide by former Fidelity fund manager Anthony Bolton, and The Art Of Execution by Lee Freeman-Shor (previously reviewed here).

On a day-to-day basis, Andy reads the financial news on various apps and websites, as well as making time to watch fund manager interviews on YouTube.

He has recently subscribed to Stockopedia and likes to research small-cap ideas, for which the site’s stock reports have been useful.

Through his reading and research, he hopes to generate investment ideas across different buckets, ‘such as companies trading ahead of expectations, companies undergoing transformation and recovery plays, high revenue growth shares, potentially undervalued shares and so on.’

He adds: ‘I’m not a stickler for rules, so my portfolio is quite broad and ranges from biotech and gaming to renewable energy through NextEnergy Solar Fund (NESF), owned for its high yield.’

His ‘one that got away’ is home services group Sureserve (SUR:AIM), which he had owned for a short while and sold just weeks before it was bid for at a 37% premium by European private equity firm Cap10 in April 2023.

Stocks currently on his radar include FTSE 250 defence contractor Chemring (CHG), where he is particularly interested in its cyber-security capabilities, and media group Next 15 (NFG:AIM).

DISCLAIMER: Please note, we do not provide financial advice in case study articles, and we are unable to comment on the suitability of the subject’s investments. Individuals who are unsure about the suitability of investments should consult a suitably qualified financial adviser.
Past performance is not a guide to future performance and some investments need to be held for the long term. Tax treatment depends on your individual circumstances and rules may change. ISA and pension rules apply.

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