Patient Portfolio Update – August 18

patient portfolio

Generally, August comes after July. So here we are, the Patient Portfolio Update for August.

The Patient Portfolio Update details how I build wealth, without trying to rush things along.

As ever, let’s begin by taking a look at that adorable passive income!

Passive income

Source

Amount

Dividends

£10.53

Property Partner

£11.09

Rate Setter

£2.33

Wise Alpha

£3.80

Grand Total

£27.75

This compares favourably to last years result of £8.25. In just 1 year income has more than trebled, that’s the power of regular buying and reinvesting income.

Dividends came in from Apple (£2.92) and National Grid (£7.61). As I’ve switched over from individual stocks to index investing, there won’t be substantial growth in income from such companies, unfortunately.

To counter that, I’ll be buying Vanguards FTSE 100 ETF (VUKE). It has a respectable dividend of 3.91% paid quarterly.

Portfolio Pie

portfolio pie

A new (yet small) addition to the pie; Gold!

Using the Glint pay app,  gold can be bought at a fee of just 0.5%. It’s held remotely so gold reserves can be bought or sold instantly. Glint pay recently had a successful crowd-raise on Crowdcube where they raised over £2m (I invested).

Now, I’m not a big fan of gold (unproductive asset alert!), but I am a fan of diversification. I want to slowly build a holding of 2 or 3% in gold.

Yes, I’m aware that Warren Buffett wouldn’t be impressed. However, Ray Dalio would approve. Realistically, adding gold to the Patient Portfolio will have little overall impact, but I hope it will shine brightly when global stocks face dark days.

£22,414.72 (up 0.58% on last month!) is the closing figure for August.

Thanks for stopping by! I hope you & your portfolio had a great month.

Diversify Into Different Asset Type’s Like A Boss With The Stock Market

The stock market such a dynamic way to invest.

Because the stock market allows us to jump into an infinite amount of industries and most asset classes are represented.

What is it you want returns from? Gold? Bitcoin? Whatever your answer is, your interests can be served by the stock market one way or another.

Let’s take a look how you can gain from various asset types via the stock market

1. Gold

“When paper money systems begin to crack at the seams, the run to gold could be explosive.” – Harry Browne

Gold is renowned for being a top-notch safe-haven. As well as a powerful hedge against inflation. The price of gold mining stocks tends to correlate with the price of gold.

Examples:
Centamin (LSE:CEY)
Goldcorp (NYSE:GG)

2. Oil

Cinemagraph GIF - Find & Share on GIPHY

Oil is possibly the most strategically important commodity available. The economy without oil would simply break down and our personal lives would take a major hit too.

Again, the price of oil stocks tend to correlate with the price of oil so if you don’t enough spare cash to find undiscovered oil, drill & distribute it efficiently, then buying stock in an oil producing company is a good shout.

Examples:
BP (LSE:BP)
Saudi Aramco (Awaiting IPO)

3. Property

“It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.” – Donald Trump

“You make money from property and do business for fun.” – Alan Sugar

Apprentice-boss quote beef aside, property is known for being THE ultimate investment, especially in the U.K. The fact that there has been no loss for (residential) property over any 5-year period since 1973 supports this.

Real Estate Investment Trusts (REITs) own property portfolios and trade on the stock markets. They are obliged to hand out 90% of income to shareholders every year.

Another way to benefit of bricks and mortar would be to invest in a property building company or a mortgage lender.

Examples:
British Land (LSE:BLND)
Taylor Wimpey (LSE:TW)

4. Cash

“Cash is King” – The Richest Man in London. This quote has no owner so I’m claiming it.

I won’t lie, conceptually this is quite odd but keep with me. Banks look to make profit from people trusting them with their cash. The more cash we hold in the bank as a country, means more money for the banks to flip.

Though, I’m not saying banks increase in profitability as they receive more cash from customers. I am saying that cash is central to the banking system. So you can make money from cash as they make money from cash.

Example:
Lloyds Bank (LSE:LLO)

5. Bitcoin (Cryptocurrencies)

A lot can be said about Bitcoin right now as  August 1st looms. Something about Segwit, BIP148 and hard forks etc. I wish I could explain it.

Cryptocurrencies and blockchain are a new type of asset. No one knows how it will end but the insane growth of the sector in such a small space of time cannot be ignored. Bitcoin is currently at £2146.73 and in January 2013 it was less than £10.

Tech-guys mine bitcoin online with powerful hardware. The hardware has to keep getting more powerful to make mining profitable. So instead of mining or buying bitcoin, how about the companies that supply the mining software?

Examples
Nvidia (NASDAQ:NVDA)
AMD (NASDAQ:AMD)

6. Yourself

We are always encouraged to invest in ourselves which is purposeful advice. Let’s see how we can adapt this to the stock market.

Firstly, if you work for a listed company, then it should follow that the work you do is meaningful and is helping your progression (if not, think about leaving). Equally, you should believe that the company will have long term success (if not, think about leaving).

So how about intensifying the relationship and buying a small share in the business that you work for? You’re investing in yourself by being at a great company, the great company is investing in you and you’re financially investing in the great company.

Another way to use the stock market to invest in your self would be to invest in a company whose services or products you use to be productive. This could be a publishing company that provides you the books you read or a education company providing you with a course; investing in these companies are an indirect investment in yourself.

Examples:
Pearsons (LSE:PSON) – Educational courses and publisher
Microsoft (NASDAQ:MSFT) – Productivity software and hardware

Wrap up

Buying shares allows for strong diversification and lets you benefit from different types of asset.

Disclaimer