The FTSE 100 index ended January a mere ten points down at 6083.8, but that was enough to spook investors who believe that the first month sets the tone for the year.
That, plus renewed fears over a China slowdown and the oil glut, sparked a tough start to February for the London stock market - and it has taken another of our shares below its stop-loss level at which we are compelled to sell. We say farewell to digital radio specialist Sepura, which has contributed £925 cash to our month-old 2016 portfolio, making a total reserve of £2,764.88.
Our other new year selections look healthier. Star performer was British Polythene, after the sale of its Chinese operation powered the shares up 22p.
The 2015 selections gained from the recent broad switch to blue chips, together with news of Craneware’s £1m-a-year deal to supply US hospitals.
As our 2014 portfolio was down to just two constituents, we have pondered a suitable mate for Reckitt Benckiser and National Grid.
Following Warren Buffett’s edict to be greedy when others are fearful, we have put £1,000 into Royal Dutch Shell “B” shares, more favourable for British taxpayers than the “A” shares.
While we are not convinced that the oil price has definitely hit bottom, it does seem to have formed a base at around $30 a barrel, firmly enough to let the industry begin to make sensible plans.
And Shell has just completed taking over BG, the former British Gas, which should generate savings of £2.5bn, boosting cash flow and dividend prospects from a remarkable 8.25 per cent current yield.
The shares are not for the faint-hearted, but we believe they should be a sound long-term addition.
Last week’s three newcomers to the 2013 batch have already started earning their keep. Stagecoach was helped by the weak US dollar, BT produced buoyant 3rd-quarter results and Imperial Tobacco was engulfed in a cloud of takeover rumours.
After buying Shell, we still have £14,000 cash in the different portfolios, giving us plenty of ammunition to take advantage of promising situations as they arise.
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