July 12, 2021 0 By bullheadedbear
Bull Headed Bear Logo










ASSET TYPE: Stable businesses with stable + growing dividends (+3% yield).
OBJECTIVE: Grow passive income stream.
RISK v REWARD: Lower risk, lower reward potential.






ASSET TYPE: Profitable businesses with high growth potential.
OBJECTIVE: Long term capital growth.
RISK v REWARD: Medium risk, medium reward potential.






ASSET TYPE: Early stage companies with potential of rapid growth.
OBJECTIVE: Chance of large capital gains.
RISK v REWARD: High risk, high reward potential.



How can you lose?

The 2021 first half progress of +10.6% return has been pleasing, and I will be more than happy if the second half continues at the same rate. It has been an interesting 6 months with almost every element affecting markets but unclear and questioned. Covid infections were reducing (at least in the UK & US) but now starting to climb again due to the new variant. Cities and countries opening and then pausing or even closing again. Inflation is rising, but there is no consensus on whether it is real inflation that will last or temporary inflation. Employment is creeping back up again, but not as fast as everyone was hoping. There are no elements that feel completely clear, and even the professionals disagree and contradict each other.

The markets usually dislike uncertainty; however, the equity (stock) markets have a glass half full view and read positives in any event. If economies are opening fast, then that is good for growth, so stocks rise. If economies are struggling, the governments will pump more money into the economies, so stocks rise. Hence the now regular “new all-time highs”, especially in the US.

For the last year at least, it has felt that it is harder to lose money than it is to make money in the stock market. This situation scares me a little as there is a real chance of complacency. It also makes me nervous for all the new investors and traders that have started this last year. The constant rises could be feeding a false sense of security that could eventually hurt portfolios and cost people a lot of money. But then again, the bear in me is often stronger than the bull.

Personal learnings

Personally, it has been another year of learning and growth as a private investor. Fortunately, these learnings have not cost me, as can often be in the investment game. Usually, learnings come from mistakes, and mistakes can cause losses. Luckily for me, I have managed to spot mistakes early enough to rectify them (I hope so anyway!).

Learning 1: Pick the right broker – quicker

My first learning is one that I should have realised a long time ago. That is not to have your portfolio spread across too many brokers. I am not sure I would have changed much in what I have done except make the decision quicker.

Hargreaves Lansdown has been my investment broker since I started investing, and they are my chosen broker for funds. I also have some of my earlier equity investments still with them. Hargreaves Lansdown is also my preferred broker for managing my kid’s junior investment ISA’s. These have only recently been set up and will consist mainly of funds, hence selecting HL.

Over the last few years, I have been trialling the commission-free brokers in Trading 212 and FreeTrade. I wanted to understand if there were any good or just a gimmick. At first, Trading 212 seemed to have the edge; however, over time, FreeTrade has developed very well. As a result, I have started to use them a lot more for single stock investments. I have also recently set up a stocks & shares ISA with them.

Having multiple brokers has not been the issue. The issues come with trying to consolidate them this year. I have made some good investment decisions and bought at good levels. Therefore consolidating has meant I have occasionally had to sell and then buy back at a higher price. It is not the end of the world as I have still bought at prices that I believe are good value, plus I have banked some profits. So the lesson is to pick your broker(s) quicker.

Learning 2: Don’t get sucked in

FOMO (Fear of missing out) is a common phycological emotion that needs to be controlled. For me personally, it is speculative stocks that encourage FOMO. The ones that have the potential to bring big returns but can also ruin your portfolio. The last year has seen a huge increase in new investors, leading to a huge increase in social media hype and speculation. I am usually a risk-averse investor, but I found myself getting pulled into the hype. For example, there was so much attention on the EV (electric vehicle) market that I ended up investing far too much capital in this sector (for more details, see the March review here). As a result, I suddenly had far more than my 5-6% allocation limit in speculative stocks and put my portfolio at risk.

I have since split my portfolio and manage it as 3 completely separate portfolios (for more details, see the April review here). In the past, I have tried to manage the split by rough allocations. However, this was not robust enough. Now the 3 separate portfolios allow me to keep a much tighter grip on allocations and risk. So this lesson was not to let FOMO and hype suck you in and put your whole portfolio at risk.




The income portfolio is in the green for the month, although pretty much flat compared to last month. Year to date it is sitting at a solid +10.6%.

There have been some sizable declines in some mining stocks this month, with drops from Anglo American plc (-8.4%, Centamin plc. (-7.6%) and Anglo Pacific Group plc. (-4.14%) as the commodity prices pull back from their recent highs. Banking stocks also pulled back with Lloyds Banking Group plc. (-6.4%) and Banco Santander SA (-5.7%) both declining significantly. The other big decliner for the month was Vodafone Group plc. (-5.4%). These were offset by increases in GlaxoSmithKline plc. (+5.6%), Royal Dutch Shell plc. (+9%) and Reach plc (+15.8%). Towards the end of the month, there is also a +39.5% increase in the Morrison (WM) Supermarkets plc. stock price as they received a takeover offer.

There were no trades this month in the income portfolio.

Dividends received in June 2021 were up over 83% compared to June 2020 as the growth continues. That result means dividends received in the first half of 2021 are up 74% vs the first half of 2020 and up 223% vs the first half of 2019. In June, the companies paying dividends were Intel, Reach, IBM, Microsoft, Anglo American, Unilever, Centamin, Royal Dutch Shell, Diversified Gas & Oil and Morrisons.

Overall I am incredibly pleased with the progress of the Income Portfolio and the progress against the strategy.


The growth portfolio picks back up with a =5% performance following the -3.9% in May. The results in the growth portfolio being +6% for the year, which is respectable. However, this portfolio is heavy UK tech stocks that could have limited growth for the remainder of the year due to its rally. Therefore, I will need to rely on the China growth stocks or search for new UK growth stocks to get more returns from this portfolio this year.

Pan African Resources plc (-25.7%) was the biggest decliner by far as the commodities, in general, pulled back. The pullback also resulted in iShares Physical Silver (-4.1%) declining. LM Ericsson (-6.3%) was also on the list of stocks that declined more than 5%. However, the list of stocks up more than 5% was much larger. The two funds in this portfolio, HL Select Global Growth (+5%) and Baillie Gifford China Fund (+5.8%), delivered well. The UK tech/gambling company Entain plc (+5.8%) delivered strong alongside the US & China tech stocks. Alibaba (+6%) & (+7.9%) from the China growth category and Amazon (+6.7%), Microsoft (+8.5%) and Apple (+9.9%) from the US all adding to a strong month for the growth portfolio.

The only trade this month in the growth portfolio was further purchases of the Baillie Gifford China Fund.


Although not as exciting as the +10.5% last month, the speculative portfolio delivered another good month at +3.3%. This monthly gain takes the portfolio returns to +2.2% for the year.

As usual with the speculative stock, all but one was + or – 5% as they continue to be the volatile group. Argo Blockchain (-24.8%) continues to get hammered with the rest of the crypto universe. Greatland Gold (-20%) and Hummingbird Resources (-13.7%) declined with the remaining commodity stocks. Aston Martin (-10.8%) and Gfinity (-6.7%) added to the decliners. The EV stocks had a strong month Plug Power (+11%), QuantumScape (+13.1%), Nikola (+20%) were all good but outshone by Workhorse (+77.1%). There was also a strong rise in Virgin Galactic (+47.1%) as the billionaire space race picks up.

Due to having too much capital allocated to speculative stocks, I took advantage of this strong month to reduce my exposure and bank some profits. I have previously mentioned over-committing to speculative stocks, so this was the ideal time to reduce that risk. Firstly I trimmed my position in Nikola by almost a quarter cashing in on 37% profit. I also sold a third of my Workhorse position, banking a 37.6% profit. These sales have helped me reduce my exposure to EV, which was too big and banked profits make the remaining positions less risky.

To add to this, I also sold around a quarter of my Virgin Galactic position, banking a further 75% profit to add to last month’s profits taken. In hindsight, I might have sold a little early as this was before they announced the date of the crewed space flight; however, profit is profit. I still hold a decent position, and the profits I have taken from Virgin so far mean the remaining position is essentially free. The profits I have managed to take are larger than the capital I have invested.


Baillie Gifford China Growth Fund

BUY PRICE: £7.92

This purchase was an increase to a position already held. As the name describes, this fund focused on China growth stocks. This fund was specifically selected to get exposure to Alibaba and without having the full risk of holding them as individual stocks. For further details on this see the previous post – Alibaba vs Funds.


Nikola NKLA Logo

Nikola Corp.

SELL PRICE: $18.60

As mentioned above, I sold a small part of the position to take some profits while also reducing the overall allocation of capital to the speculative portfolio. I still hold a position in Nikola, which I intend to hold for the long term. I will probably continue to take further profit if the situation arises.

Workhorse WKHS Logo

Workhorse Group Inc.

SELL PRICE: $18.50

Like the above Nikola trade, I sold a third of my position to take some profits while also reducing the overall allocation of capital to the speculative portfolio. I still hold a position in Workhorse, which I intend to hold for the long term. Again like Nikola, I may take further profits in the future as I balance holding a position while managing risk.

Virgin Galactic Holdings Inc.

Virgin Galactic SPCE


Virgin Galactic has had some significant increases recently, and so I decided to take some profit. Most of my position is held in my ISA; however, I did hold a small position in my Trading 212 account, which I am trying to move away from. I sold the remaining position in the Trading 212 account banking 75% profit.

As mentioned above, I could have held on and get a better price due to more positive news on space flights. However, hindsight is a wonderful thing and timing the markets perfectly is an impossible task.




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