Dog Days are Over – Dogs of the FTSE final update

Well what better time to provide a final update to my Dogs of the FTSE portfolio than when everything seems to be spiralling downwards into despairing oblivion!

Dogs of War

So one year on and my 5th experimental portfolio has, like many other portfolios, seen far better days.

As a reminder, here’s the Dogs of the FTSE strategy:

  1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
  2. Invest equal amounts in all ten shares
  3. Hold for a year (give or take a week)
  4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
  5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]

Here’s how the 2021/22 portfolio looked as at 10th June 2022:

A loss of 8.06%, but nearly breaking even at -0.26% if you include dividends paid out.

Over the same period, the FTSE 100 Total Return was 3.45%.

OUCH – look at those losses, especially the -85.96% loss suffered by Polymetal International, caught in the crossfires of the Ukraine war.

If I remove Polymetal, it would have been pretty much evens at 0.07%, and a nice 8.10% including dividends, but that’s not how it works, the strategy meant that I had to live with the bad Dogs as well as the good. Hey ho!

Five-Year Experiment

So, did the Dogs beat the markets? Looks like we might need a VAR check…

Year 1 (2017/18): Dogs 1% vs FTSE 100 TR (for same period) 0.85%1-0 Dogs (VAR check….)

Year 2 (2018/2019): Dogs 16% v FTSE 100 TR -2.02%2-0 Dogs

Year 3 (2019/2020): Dogs -11.7% v FTSE 100 TR -9.6%2-1 Dogs

Year 4 (2020/2021): Dogs 21.78% v FTSE 100 TR 18.68%3-1 Dogs

Year 5 (2021/2022): Dogs -0.26% v FTSE 100 TR 3.45%3-2 Dogs

VAR check on Year 1 gives the Dogs the win, so Dogs ‘beat the market’ 3-2 (however it was really a draw, wasn’t it?!)

Why???

Until recently, I hadn’t really considered why I was even running this experiment.

Mostly it was out of curiosity, I wanted to see if the strategy would work, and I thought it would be fun (spoiler – it was! 😀 )

However, ultimately, I think I was seeking a strategy which took the emotions out of investing, a strategy which had an element of ‘spoon-feeding’ – here I was being told what to buy and when to buy, and what to sell and when to sell. Easy peasy investing!

I have to say during times of volatility, my Dogs portfolio was the only part of my investments which I could look at and honestly shrug without a care, because I knew 100% I wouldn’t be doing anything with it since the strategy didn’t allow me to.

With the other parts of my portoflio, there was always the choice to do something and we all know that in investing, it’s not always easy having to decide to do nothing.

Conclusion

Whilst the strategy took all the emotion and decision-making out of investing, it was totally inflexible in that you couldn’t make any changes to the portfolio in reaction to world events, eg war/pandemic, although I guess that’s the whole point of it!

You could argue that if not for the pandemic or war, the outcome might have been different but there’s always some other world crisis which jiggles the markets in some way.

What Next?

It was my intention to run this as a 5-year experiment so this is, sadly, the Dogs’ last outing. For now.

If the economical outlook didn’t look so dire,  I would have probably continued with it, or thought about doing a sister Dogs of the FTSE 250 portfolio but I think right now, with my serious head on, I need to rein in this fun side of my investments and knuckle down until things improve.

Since this is the end, there’s no need for me to kick out unwanted mutts at a loss (to  bring in new ones), I’m just going to wait for the market to recover and then see what happens.

I’ll likely be hanging on to some of the Dogs long term, possibly adding to a few, as part of the income producing part of my portfolio.

So, it’s goodbye from the Dogs..until we meet again!

In the meantime, keep calm and carry on investing!

Dogs of the FTSE + Random Shares (final update)

My final (probably) Dogs of the FTSE experimental portfolio was set up in June 2021.

I haven’t been paying attention to this so it’s high time for an update.

As usual, I always seem do these updates when the markets are incredibly rubbish, so I couldn’t have chosen a better time!

Here’s a reminder of the Dogs of the FTSE strategy (which is based on the US Dogs of the Dow strategy):

  1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
  2. Invest equal amounts in all ten shares
  3. Hold for a year (give or take a week)
  4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
  5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]

Note that this is part of my ‘fun’ portfolio (although it’s been no fun at all lately!) and represents less than 1.5% of my Future Fund – it is not what I do as a main investing strategy. All dividends received are reinvested.

Dogs of Doom

The mutts are again drowning in a sea of red numbers, although unbelievably, the portfolio is actually doing slightly better than it was in my last update!

A few (BHP, British American Tobacco and National Grid) seem to be strong in the face of adversity but the others are not looking so clever (notably Polymetal International, Persimmon and M&G).

Over the same period, the FTSE 100 Total Return was a lofty 8.42% so the Dogs have been a complete disaster at -2.35%.

Even with dividends received included, it’s only a gain of 2.38%, so a really poor show for this strategy.

I guess I might drum up the motivation to do another update in a couple of months’ time, to see if there is any change, for better or worse!

Random Shares

My Random Share Portfolio is made up of free shares awarded to me whenever someone signs up to the Freetrade app via my affiliate link, bagging us both a random free share (worth between £3 and £200) in the process.

Freetrade has been ordered by the FCA to get rid of all paid-for social media influencer posts.

Apparently, some TikTok influencer alluded in a video that using Freetrade contributed towards them reducing their personal debt. Not very responsible, but who gets financial advice from TikTok influencers? Too many, it appears.

I personally don’t class my blog as social media and I don’t categorise myself as an influencer but I don’t want to fall foul over anything so this will be my last Random Shares portfolio update.  I will likely sell off all the shares in this portfolio (once they’re in the green). One less thing to keep tabs on.

My referral link still works for free shares, I just won’t brandish it about in any posts, unless people ask me via email/DM and of course, their capital is at risk if they choose to use the app.

Can I just say now that I’m not in any way saying that you will reach FIRE if you download the Freetrade app, although fee-free transactions might help you along the way!

Here’s the full portfolio before it’s all sold off.

Anyway, a big thanks to all who signed up via my link in the past – hope you all got a decent free share and perhaps continue to get some use out of managing your portfolio with the app.

October 2021 Savings, plus other updates

Highlights this month:

  • At last, I had a mini break away from home! As mentioned in my last update, I went to London – I had tickets to watch the NFL game, Miami Dolphins v Jacksonville Jaguars. It was a great weekend – an enjoyable match with a sellout crowd in Tottenham Hotspurs’ beautiful stadium. The following day, we spent some time wandering around Camden, sampling some expensive beer and food and then happened across probably one of the coolest and most fascinating shops I’ve visited in a long time – I didn’t buy anything, just enjoyed the sights and the music!

It was a great atmosphere and yes, I did know what was going on (mostly!)

Walking into this shop was like walking into another world

  • I went to the cinema to watch the latest James Bond film, ‘No Time to Die’ – have always loved Daniel Craig as Bond.
  • Enjoyed another great Manchester FIRE meetup in the pub – great to interact with faces old and new. There were around 20 of us who turned up. Anyone who’s interested in these meetups, sign up to Financial Independence FIRE – Manchester.  Events are alternately online and face-to-face, so the next one will be online on Friday 26th Nov.
  • And finally, I am sooooo relieved to say that I have finally exchanged contracts on my house, with completion due to happen early November! More details soon – so much (more) to do!

So, how did I get on with my savings in October?

I saved 14.4% of my net salary.

The above includes another £25 Premium Bond win, and £42.24 from doing Prolific surveys.

Shares and Investment Trusts

I started switching out some of my bond ETFs into a defensive investment trust, Ruffer Investment Co.  Monevator recently did a two-parter on the 60/40 strategy but I was already getting a bit antsy about the portion of bonds I held in my portfolio and wondering what I could do. Despite not holding anywhere near 40%, I was feeling it was still on the high side.

I won’t ditch them completely but will likely switch some more into other defensive investment trusts.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

After removing the funds needed to buy my house, my Future Fund has dropped to £227,413. It’s not half as bad as I originally envisaged – as suggested by regular commenter Jane In London, I asked my Mum for the max amount she would loan me (that I could still cover with the eventual sale of my BTL) so this meant that I didn’t have to dip so far into my own funds.

I had to sell some equities (from my S&S ISAs) to release some cash and fortunately, I sold little bits of my portfolio over July and August when numbers were green.

I’ve been dreading doing this graph update.

Regular commenter Kid Cocoa suggested rebasing the graph, as if the house money was never part of my Future Fund, so that its removal didn’t cause me any distress. I did that and this is what it looks like:

 

[edit – original post had the wrong graph]

Looking good, with the markets bouncing back after the drop in September.

However, for consistency and because I feel like I need to see the consequences (and feel the pain) of my actions, this is what the graph actually looks like:

Oof! Looks almost like the crash back in March 2020, although there’s very little hope for another V-shaped recovery, haha!

My Future Fund’s value is now what it was in March 2021 so I’ve only really lost 7 months. My FIRE plan is still intact and unchanged – this is fine, I don’t feel so stressed about it any more.

Anyway, as horrid as the graph looks, I am already looking forward seeing it go back up again.

Dividends and Other Income

A more average month for dividends:

Continue reading

‘Crisis’ Dogs of the FTSE + Random Shares

My latest Dogs of the FTSE experimental portfolio was set up in June 2021, so it’s time for an update.

I appear to have timed it just as the markets have gone a bit rubbish.

Here’s a reminder of the Dogs of the FTSE strategy (which is based on the US Dogs of the Dow strategy):

  1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
  2. Invest equal amounts in all ten shares
  3. Hold for a year (give or take a week)
  4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
  5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]

Note that this is part of my ‘fun’ portfolio and represents less than 1.5% of my Future Fund – it is not what I do as a main investing strategy. All dividends received are reinvested.

In the Doghouse

The mutts are all looking rather poorly, drowning in a sea of red numbers.

The only two Dogs showing any gains are the two energy stocks (National Grid and SSE), flying in the face of a potential gas shortage crisis.

Over the same period, the FTSE 100 Total Return was -0.76% so the Dogs are doing terribly at -10.71%.

Even with dividends received included, it’s a loss of –8.33%, so not a great start.

Will be interesting to see how they survive the winter…

Random Shares

My Random Share Portfolio is made up of free shares awarded to me whenever someone signs up to Freetrade* via my affiliate link, bagging us both a random free share (worth between £3 and £200) in the process.

A couple of the freebies I received recently – thanks to whoever signed up via my link!

Here’s the full portfolio.

I’ve kept most of the shares, occasionally selling when the odd one or two gain by >20%.

Money from the sales of any random shares are chucked into my ISA, with a few quid going towards my Winter Rock Associates Fund 😉

A big thanks to all who have signed up via my link in the past – hope you all got a decent free share!