The Covid-19 pandemic caused Sabrina Thornton to reassess her financial priorities.
Thornton, a doctorate holder and senior lecturer at The University of Sheffield, says:
“The lockdown made me look at a whole range of things in a different way. There was a lot of uncertainty at the time and it made me want to ensure I was taking steps to build a safer and securer future.
“I have since reassessed my finances and designed a plan for investment and saving.”
Thornton was encouraged to look at stock market-based options, which are riskier but potentially more rewarding as well.
“I didn’t really know where to start initially. Even signing up to a platform and working out whether you want an ISA or a dealing account can be a bit daunting,” she says.
Gut Instinct
Now in her early 40s, Thornton says she knows far fewer women with their own investment portfolios, compared to her male peers.
Having wanted to take some positive steps, she opened both a stocks and shares ISA and a general investment account with AJ Bell, as well as a Sipp account.
She has since invested in a couple of funds, alongside some direct shareholdings. One of her first investments was Fundsmith Equity, the popular fund run by Terry Smith.
This Morningstar gold-medal-rated offering has delivered excellent returns to investors, and Thornton says it has given her portfolio a “good start”.
According to Morningstar data, it has delivered annualised returns of 18.18% over the past three years.
Thornton also invested directly in a number of company shares.
“I tend to buy shares in companies I know well and have had personal experience of, either buying their products or using their services,” she says.
“I will do research, but often follow my gut instinct based on whether they are delivering for their customers.”
Thornton currently invests in around 14 different companies, and says when choosing stocks she has tried to diversify across different sectors and regions, with holdings in the UK, Europe, Japan and the US.
For example, she currently holds UK-based housebuilder Redrow (RDW), which has benefitted from a buoyant housing market in the UK, and a series of government initiatives designed to boost the number of new homes built, and help first-time buyers.
According to Morningstar data, Redrow investors have seen total annualised returns of 15.34% over the past three years, comfortably outperforming the 6.71% returns from the FTSE100 over the same period.
Thornton also holds luxury parent Louis Vuitton Moet Hennessey (LVMH), another company that has seen its share price soar, from 147.15p at the start of 2016 to 710p in 2021.
Morningstar analysts say this company has “a portfolio of leading brands in several luxury niches, which should allow it to generate economic profits well into the future”.
Over half the company’s profits are from its fashion and leather brands, where it also owns Fendi and Loro Piana as well as Louis Vuitton. Alongside its wine and spirits business, LVMH also owns the Dior and Guerlain perfume brands, as well as luxury jewellery brand Bulgari.
When it comes to US stocks, Thornton holds American Express (AXP), Amazon (AMZN) and Apple (AAPL), all of which have benefited from the rising technology market.
A Strong Heart
Typically, Thornton will own just a small amount in each of the holdings. However, she has consolidated bits of her portfolio to cut out laggards.
“I have looked to consolidate some of my holdings, and have sold a couple of stocks that have not performed as well and used this money to top up other holdings,” she says.
For example, she recently sold a holding in Lloyds Group (LLOY), after the bank’s shares did not appear to be progressing. The share price fell after she invested, so when it climbed back to break-even point she sold and reinvested the money in her other current holdings.
That said, she says a recent investment in oat milk manufacturer Oatly Group (OTLY) has not delivered the returns she hoped for.
“The share price had been buoyant initially, but it has gone down quite significantly since I invested. I don’t want to sell it and crystallise those losses so I am just leaving it and hoping for some recovery. Fortunately I only have a small amount invested.”
That disappointment has not sunk her enthusiasm.
“It can feel like you are taking on a lot of risk when it comes to investing. You certainly need a strong heart. I never saw myself as an investor, but I am glad I have taken this step, and starting to take control of my financial security and future retirement,” she says.
