Anthony Woods started investing in the late 1990s just before the dotcom crash. While this experience may have put off many would-be investors, Anthony is still investing 25 years later, and sitting on a reasonable nest-egg.
Anthony, who is 47 and works as an HR manager, says a work colleague encouraged him to start investing. “My line manager was really interested in stocks and shares and he gave me a basic introduction. The crash put me off for some time but I slowly started to get back into it investing small amounts of money at the end of each month.”
Anthony still invests into his ISA, which he holds with AJ Bell YouInvest — though he is considering moving assets across into a SIPP as he gets closer to retirement.
In the ISA Anthony holds a number of company shares as well as a couple of funds. But it is the underlying company holdings that drive his choices when it comes to these collective investments. Fees are also important to him.
“I tend to select funds that invest in companies I’m interested in and I do not invest in anything with costs higher than 0.7% per year as they appear too expensive for me. I also hold trackers as they feel dependable and cheap.” These trackers are a good way to get wider diversification, alongside his more focused share portfolio.
He is currently invested in a number of large blue chips companies like Royal Mail (RMG), Barclays (BARC) and Aviva (AV.). Investors in Royal Mail have endured a volatile ride. Shares had a strong run in 2020 and 2021, hitting nearly 600p. But shares are down 44% in 2022 and are still below the 2013 float price of 330p.
As a former Royal Mail employee, Anthony received a number of free shares, though he has also added to the holding. “Their shares have been very volatile and I have taken a hard hit over the past few months. However I plan to hold them for the long term and believe that they will perform once their large parcel processing centres are up and running.”
Financial companies Barclays and Aviva have also endured a bumpy few years in terms of their share prices.
Barclays has a 3-star rating from Morningstar. Analysts point out that in the UK segment the bank is operating it what it believes to be a strong retail franchise, which is underpinned by a market leading share in credit cards.
However they point out that there is high uncertainty around its future share price, and the bank does not have an economic moat, meaning its market and profits are not necessarily protected from rivals and newer entrants.
Smaller Companies
Elsewhere Anthony also has holdings in some smaller less well-known companies. This includes a stake in professional services firm FRP Advisory (FRP), video-game manufacturer TinyBuild (TBLD) and Russian steel firm Evraz (EVR), whose shares were suspended in March in the first wave of sanctions against Russia after the Ukraine invasion.
FRP Advisory is a relatively new listing that has seen relatively strong growth over the past since floated in 2020. Investors have seen strong returns of 11.79% over the past year, although the share price has fallen slightly since its peak earlier this year.
TinyBuild is another recent listing, with share prices initially rising strongly after its flotation. However, they have headed in a negative direction over the past 18 months – with investors sitting on losses of 44.88% over the past year.
Anthony says that performance has been patchy with many of these smaller companies.
He adds: “2022 has been particularly painful for my portfolio as a whole but because I plan to invest long term, I’m not worried. In fact, I’m topping up my Rathbone Global Opportunities fund each month as I believe the companies it invests in are robust.”
Bronze-rated Rathbone Global Opportunities also has a 5-star rating from Morningstar, reflecting its strong performance relative to peers. Morningstar analysts say they retain “strong conviction” in its managers, and says this fund is “a great option for investors seeking exposure to high-growth, mid- to large-cap global equities.” Over 10 years it has delivered annualised returns of 14.37% to investors.
Anthony hasn’t made any direct changes to his investment strategy, in response to volatile markets and a more uncertain economic outlook. However, he may use this as a buying opportunity.
He says: “I am keeping a close eye on current events, and am currently watching a few different companies that I feel have been hit harder than they deserve. Adidas is on my watch list, and the S&P 500 is on there too. If that were to drop dramatically, I would invest. I also plan to invest a little more than normal once I feel the inflationary and potential recession fears start to calm down.”
Anthony and his wife also invest into a pension for each of his daughters. “I originally started them in Virgin stakeholder pensions when the 1% cap started but moved them to Vanguard as it’s considerably cheaper.
“I also invest in a couple of Vanguard’s own tracker funds. They offer good diversification and a low fee, so I feel they are a good long-term option.”
