Week 5 - Portfolio Investing

Week 05: Markets & Portfolios Dropped as Coronavirus Continues Its Havoc

Background

I have been investing in shares for over the last 3/4 years. Like any other newbie investor, I have made mistakes in the past, and I am probably still making a few mistakes. However, I am, also, learning many new things every day. So I have decided to write a weekly column about the market, my portfolio, and investing opportunities. I honestly hope this will be useful to someone out there, one day.

Market Summary

Unfortunately, I was right about the impact of coronavirus in my last post – it’s not going away any time soon. As it spreads more and more, with each passing day the death toll has been rising too.

Coronavirus spread in China & Other Locations
Coronavirus spread in China & Other Locations (Credit: Guardian)

All governments are evacuating their nationals from Wuhan. A flight full of 83 Brits landed on Friday. I hope they are all healthy and fine. To my disbelief, the passenger-carrying bus drivers and some of the ground staff were not wearing masks or protective gear. That is shocking, and I seriously hope that there will be an internal inquiry on this matter.

Anyway, as expected, all the major markets unanimously dropped last week. The banks, miners, tourism and leisure sectors have faced the most significant drops.

Markets7-day Return
UK Market-3.3%
United States Market-2.1%
UK Banks-4.1%

My Portfolios

Currently, I have two portfolios – one for regular share dealings, and another one is Self-invested Personal Pensions (SIPP). Both of them dropped in line with the markets, -3.4% and -3.3% respectively.

The top five worst performers were Royal Dutch Shell (Lon:RDSB), Evraz (Lon:EVR), BP (Lon:BP), EasyJet (Lon:EJZ) and Smith & Nephew (Lon:SN.).

On 30th January, Shell announced more than 30% dropped in income in 4th quarter 2019 report, while their share dropped by 4% at the start of trading on that day.

Evraz continous to suffer massively due to the coronavirus spread in China as it is the biggest importer of iron and coal. It also announced a mixed Q4 trading update. Since 20th January, it has dropped more than 17%.

Evraz Share Price Drop
Evraz Share Price Drop

Evraz is not for the faint-hearted investors – it is a precarious one, but at a whopping 16%, it also offers the highest FTSE 100 yield.

Drops in BP, EasyJet and Smith & Nephew are more or less directly related to the same issue.

Freetrade Portfolio

I have been hearing about Robinhood app, which allows small investors to buy fraction shares. Neither Robinhood nor fraction share dealing is available in the UK – I might be wrong about the second one. Anyway, after researching and watching several videos, I started an experimental portfolio in Freetrade. It just takes a few minutes to open and start investing.

Over the last two weeks, I put £150 and £200 in my account and purchased Advanced Micro Devices (NASDAQ:AMD) and Coca-Cola (NYSE:KO). Unfortunately, AMD share price dropped due to low forecast.

Fraction trading is still not available in Freetrade account, but they have assured me that it is coming soon 🙏

One of my friends, Nick, used my referral link to open an account and Freetrade awarded him a free share of Invesco (worth about 300p). I am still waiting for my free share. (DAMN!)

You, too, can use my link, to open an account, top-up any amount and get a free share. Who knows by starting investing bits and bobs, you might become the next millionaire 🙂

Conclusion

I do not have copious experience in investing. I have not seen any recession or financial crash yet. Coronavirus is the biggest test for me so far. But I am not going for any panic selling or buying. My strategy has been: stay put, hold tight and wait for the tide to turn. And yes- keep away from negative advice.

Are you into investing? What is your strategy? How is your portfolio doing in this challenging period? I am looking forward to hearing from you.

Keep calm and stop calculating!

NB: I am nowhere near being a qualified financial adviser. This is merely my personal view and shared purely for educational purposes.

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