The Monthly Portfolio Tracker compiled by John O’Donoghue, Consultant Adviser at Caratfin Ltd., Nicosia has doubled its money since inception on September 1, 2003, from USD 250,000 to over USD 502,000 in less than four years.
The Diversified Portfolio was launched with
At the time these weren’t available to the majority of people, but now this has changed and such a portfolio is broadly available, with a much lower minimum investment.
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— PORTFOLIO TRACKER
By John O’Donoghue
Consultant Adviser, Caratfin Ltd.
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It has been close for a few weeks, and now, in spite of all the negativity being expressed about the markets, the impending major correction and the start of a major bear market, the medium risk portfolio has pulled a + 4% growth month out of the bag and has reached the iconic status of having doubled its initial premium, in 44 months. YTD growth is a creditable +8%, and for year 4 of the portfolio, from September 2006, a superb +23.4%, or $95,330.
The month saw some changes in allocation, as was flagged up in last months piece:
Deciding what to do with this sum has taken quite a lot of thought, starting with the definition of the expression ‘more conservative’. To me this does not mean ‘conservative’ in absolute terms, but a reduction of the present risk inherent in the allocation. That’s straightforward, but it becomes more complicated – for me at least – when I look at traditional ‘safer’ assets such as Bonds, Cash and, somewhat less safe, Property. Bearing in mind that last year in May/June, and this year at the end of February and through March we saw painfully sharp corrections that pretty much affected all major asset classes (except cash, of course) without discrimination, it seems to me that ‘traditional’ attitudes and interpretations are of reduced value now than they once had, and indeed we may be facing a whole new paradigm! (Yes, I’ve always wanted to use that bit of ‘businessspeak’!) If this is even partly the case it makes sense to look at the issue from a different angle, and to me the common sense perspective is one of “what is less likely to lose money†if a bear market starts soon, as is widely expected. Now I don’t regard it as my job to place clients into cash over the long term, and Bonds continue to be a sure fire way to lose money just now, so of the traditional bolt holes noted above the only one I’ll use is Property, placing part of the proceeds from the PIT sale into the lower volatility onshore Aberdeen Property Share A unit trust. This receives £15,000, or just over $29,500. As for the rest, well, I’ve decided to add nearly $20,000 to the existing holding in perhaps the most traditional ‘safe haven’ of them all, Gold, and in keeping with my firm conviction that the commodities bull market has a long way to run still, the balance $11,000 and change goes to a new holding in Mining equities. The Merrill Lynch World Mining fund is currently a star performer, having gained over 23% year to date, 6% of that since our holding started on the 10th April! Details can be seen on the usual spreadsheet, attached.
The low-risk portfolio had a steady month, a small increase in its annualised growth figure to 9.2%, not helped by the Dollar’s continuing weakness, but still well on target.
In case the start to this piece gave the impression that I dismiss the possibility of an imminent market downturn, that is not the case at all. Funds differ from shares in many ways, one of which is that I can’t pick up the phone and tell my broker to sell 1,000 New Star European Growth, now! It doesn’t work that way, and instead takes more time. So, faced with the choice of anticipating the collapse of markets the day after tomorrow, and so starting to get out today, I’d rather add a bit more growth now and respond to a problem when it arrives. If this were, however, a very new investment that hadn’t built up that good bit of growth, I would be very concerned just now…
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Caratfin Ltd. is authorised by the Central Bank of
