SALTYDOG’S ‘DIY’ PORTFOLIO CELEBRATES 10 YEARS OF SUCCESSFULLY NAVIGATING THE FINANCIAL MARKETS.
Every week we give our members the latest performance data on a wide range of Unit Trusts, OEICS, ETFS and Investment Trusts. Our information has been carefully designed to help private investors, like ourselves, spot trends in the financial markets and easily identify the best performing funds in each sector.
We also run a couple of demonstration portfolios. These are a way of explaining how the information that we supply can be used to build and manage a portfolio and also control the volatility as market conditions vary.
Up by over 80% in ten years.
Our first and most cautious portfolio, the Tugboat, was launched on the 23rd November 2010 and so has now been going for ten years and a couple of months. The aim was to generate better returns than could be achieved in a savings account or cash ISA. We accepted that we were exposing ourselves to some market risk, but we were determined to try to avoid any major market falls.
We invested £40,000 of our own money through a mainstream fund supermarket and have been reporting on it every week since then. As we approach the end of January it’s now worth more than £74,000 and has gone up by 85%. This has been during a period when the Bank of England base interest rate has been at record lows. It’s currently at 0.1%, and the highest that it has been in the last ten years is 0.75%, and that was only for six months.
Our Tugboat portfolio has also beaten the total return of the FTSE 100 which includes reinvested income.
How it all started
Saltydog Investor was founded after the last financial crisis by a few businessmen who were disappointed by the way that we had been served by the personal financial industry.
While we had been busy building companies, developing new products and processes, investing in equipment, reacting to an everchanging economic environment, generating income and employing people, we had left the management of our own money to the so-called ‘professionals’.
We had a nagging feeling that the performance that we were getting was mediocre, at the best, but it was not until we dug a little deeper that we started to appreciate just how different the financial industry was from any businesses that we had worked in.
For a start, the remuneration of the fund managers was not directly related to the returns that they generated for their clients. On the whole, their income was based on the amount of money that they were investing, rather than how well they were doing it.
Wealth managers were in a similar position. If they all held broadly diversified portfolios, then they would get similar returns. A good sales team should be able to gloss over any underperformance, blaming it on ‘market conditions’, while making the most of any good years.
We did not want average performance. If emerging markets or tech stocks were going well, why not take advantage? If everything was going down the pan, why not sell up and move into cash? While this looked like a common-sense approach to us, it was a complete anathema to the people managing our money. The reason why was because it was not in their interest. While it may have improved our returns, it would have been a career risk for them – why take the chance? Often it is safer to be in the herd.
In the end we decided to take control of our own investments and this ultimately led to the formation of Saltydog Investor.
While there are many different ways to invest, we still believe that using funds to diversify the risk, and a momentum approach based on accurate performance data, remains the best for most private investors.
Making the most of a difficult year
The coronavirus pandemic sent a shockwave through financial markets last year and the FTSE 100 still hasn’t fully recovered. In our portfolio we avoided the worst of the downturn but have taken advantage of the subsequent recovery and have recently recorded an all-time high. www.saltydoginvestor.com