No Need to Re-invent The Investment Wheel...

After the last article I wrote, I have been thinking whether or not I need to open a new brokerage account. The fact is that Hatch works for me as a way to access individual American stocks. I also draw income from it due to my Realty Income shareholding a.k.a. the monthly dividend company. I have generated good capital gains from my (Smartshares) ETF holdings and have a system for making monthly contributions. I have good individual NZX stock holdings like Turners and Ebos. Owning the Resource Index on the ASX is possibly a mistake, but by the same token, I have not lost money owning it. Over the last five years I have compounded returns of about 8% per annum, which is not bad.

Losses on stocks like Spark, Sky TV and SMCI have greatly hindered my performance. At the time I made them, they seemed like good buys. I think I should have cut my losses on them much sooner than I did. I let the losses run and they hurt my portfolio. But they say that losses teach us more than wins, so I like to think that I have learnt from these losses. Is there a way to avoid these sorts of declines? Maybe not. But if I cut them off at 20%, I will limit the sorts of declines that can hurt me.

I wrote that the most sensible option with my next investment would be to buy something like VTI (US total stock market ETF) on Hatch. But through my ETFs on the NZX, I have actually already done this. My ETF and Managed Fund holdings comprise about 60% of my portfolio. My individual stocks all have their dividends reinvested, so I can maximise the compounded returns. With a stock like Turners, this has been a great strategy and has boosted my returns by 20% (above the normal capital growth).

When I made the purchase of Fonterra (shareholder fund) shares back in March, I did think that I might buy more further down the road. Even with their recent share price gain, they still have a dividend yield of around 9.5%. If I added to my shareholding at $6.50, I would be averaging my buy price at about $5.70, which is a pretty fair price for a quality company. Fonterra might be a boring milk powder (commodity) exporting business, but they do it better than any of their global peers. Our farmers are efficient producers, and because of that, I trust that Fonterra will be highly profitable for long into the future.