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28/03/23
Good morning. You are receiving this note because you have expressed an interest in our new Premium Service. Please let me know straight away if you do not want future updates and I will remove you from this mailing list.
To date you will have received a note from me covering the new Premium Service. I have also spoken to most of you to gauge interest. The Personalised Investment Portfolio (PIP), SUMMARISED HERE, has caught the eye of all of you.
I now plan to send, regular notes regarding the service, focussing on PIP for now and returning to other elements of the Premium Service in future notes.
Actions and observations to date:
- Terms have been finalised with Raymond James Investment Services (RJIS) to use their platform to facilitate quicker and more precise investment transactions.
- The RJIS system, although much more sophisticated, feels relatively simple to get my head around.
- I have moved my pension to them.
- Sarah and I are collating the data to understand how long that took, where the delays were, how to do it more efficiently etc.
- I have allocated £150,000 of my pension fund to stepping into and out of a specific investment to take advantages of the 5-10% changes in value.
- I will use this in £50,000 tranches, giving me three rounds of possible additional equity investment.
- The balance of my pension is invested in the equity element of the model portfolio (I have forgone bonds altogether).
- The model portfolio is different to the Fidelity model portfolio as cheaper constituents are available through RJIS.
- A previous false step on my account made it clear that we should use a separate the model portfolio from the investment we use to step in and out of the market.
- Therefore, I am using THIS INVESTMENT (VEVE) to move into and out of the market.
- By using VEVE like this I can clearly see the price and profit/loss in real time and be able to act promptly as needed.
- Data on VEVE is freely and widely available.
- VEVE is a model portfolio component with Fidelity – with RJIS there is a cheaper alternative with which to populate the model portfolio should we need to use the model portfolio with RJIS.
- VEVE covers large companies in developed companies. As such it invests in the S&P500, NASDAQ, Dow Jones, FTSE100, Nikkei, Topix, DAX and CAC etc. – all the major stock market indices.
- The previous recent high was £68.15 on 3 February – it has dropped 7.25% over six weeks.
- That is a signal to buy under PIP.
- Consequently I bought £50,000 of VEVE at £63.21 on 16 March.
- This was not the absolute recent low (it was lower the day before and 4 days after) and is also the lowest price since mid-January
- The price as I type is a little above my purchase price.
- I will now monitor the price and either look to add or sell.
- I will sell if a profit of £1,500+ becomes available.
- I am not yet completely sure of the circumstances under which I would add.
- I will see how that plays out in my thoughts and report back to you.
My current thoughts on how we roll PIP out to you is to keep you updated here and, towards the end of April, look to start moving clients across for a June start. I am minded to limit numbers, or form a queue, so that me / Sarah / RJIS / Fidelity do not become overwhelmed.
Being more cautious in thoughts and approach whilst we take a more lively attitude to a portion of your overall portfolio feels right to me. It would be easy to get over excited.
So that’s where we are, please let me have your observations / thoughts / questions / feedback. The more input I have from you the better we can make the whole Premium Service for all.
06/04/23
Since my last update on 28 March there have been developments in relation to PIP and Raymond James Investment Service (RJIS).
More accounts
With my pension settled down we are now moving my investment ISA, my investment account and TCFP’s investment account to RJIS.
In so doing we will have gone through the process of setting up every type of account we are likely to need. The process has been relatively smooth, minimal “wet” signatures are needed, things have happened in a timely manner and Sarah is on top of things.
I will get back to you with turnaround times etc. towards the end of April.
Cash
Cash above £10,000 held with RJIS earns interest, not a lot but something to offset their costs.
Portal
There is currently no live feed from RJIS to our portal, it is being worked on.
In the meantime, RJIS have their own very simple client login that looks clean and neat on my ‘phone screen. You will all automatically get a login for it from RJIS.
10% limit
I was asked where I came up with the idea of committing 10% of total investment value to PIP.
For most TCFP clients 80% is held in equities and 20% in bonds. It made sense to me to split the bond holding in half and allocate it to PIP.
But I am not wedded to that figure, I can see it growing for some of you over time as your financial plans progress. There has to be an upper limit of course, but I could see the allocation progressing to 20% (the entire bond allocation) or even 25%.
That higher figure has some logic to it too. Down years in equities typically occur (on average) once in every 4 or 5 years (stock markets typically go up 75-80% of the time) so why not allocate 20-25% of investments to something that happens 20-25% of the time?
I’m somewhat attracted to symmetry like that, perhaps overly so, which is why I think it prudent to start at a lower level.
My current investment
As you read this I will be driving my campervan (aka “Bertie”) towards St Austell. In the back two boys will be having a heated debate about whether we stop at Stonehenge or Lyme Regis (to find an intact pterodactyl). We will reach a compromise.
This highlights that, if we need to act on an investment, we need more than one of us with access to do it. RJIS trading cannot be done via a ‘phone or tablet and only sits on my desktop (and soon Sarah’s).
The £50,000 I put into VEVE was (at the close of play on Friday) approaching the point at which profits should be taken. It is clear that the current arrangements to be able to do this are not sufficient and need attention.
We will ultimately have three people able to trade but only at my behest. I will continue to monitor the prices and ask a colleague to buy or sell should I be unavailable. I will also leave very clear instructions to colleagues before I embark on any future trips.
As ever, please let me have your observations and questions. The more input the better.
11/04/23
A very quick update before I disappear for the remainder of the school holidays… My ISA
My ISA is now with RJIS and fully invested, this seemed to be a very smooth and quick process.
Once Sarah and I have got our heads together I will report back with news on turnaround times etc. for moving money across to RJIS.
VEVE “VEVE” is the “ticker” for the Vanguard Developed World ETF which is the ETF we will use to move into and out of the market. It covers 2,199 companies and is 83% large cap. It is very visible and easily bought and sold. On 16 March I bought £50,000 worth of this investment at £63.21 which was more than 5% lower than a recent high. Since then the price has been as low as £63.06 and as high as £65.38. Once it hits £65.75 (representing a £2,000 profit) it will be sold.
As ever, please let me have your observations and questions. The more input the better.
18/04/23
This week’s update is as follows…. PIP
I have now exited from my first £50,000 additional investment. Seeing that the price of VEVE at the previous close was quite close to my target price I set a limit order at the beginning of the day on 12/4/23. During the day that price was reached and the holding was sold automatically, making a profit after dealing fees of £1,982.
That represents a gain of 4% over a period of 27 days. The price has subsequently risen further, something that your general portfolio will now be benefitting from. We will now wait until the price of VEVE next gets very close to £63 and or a new recent high is established followed by a subsequent 5-6% drop.
New Strapline? Over the last few weeks I have had excellent, and much appreciated, feedback from each you. One observation was that PIP, particularly moving into and out of the market, was a departure from our “Boring But Effective” remit. I can’t argue with that observation.
Perhaps for you – the 5% of clients to whom the Premium Service has been suggested – there should be a new strapline. How does “A Little Less Boring, A Bit More Effective” sound to you?
26/04/23
My update this week confirms that two clients have asked us to start the process of moving money to Raymond James (RJIS) to allow the Personalised Investment Portfolio (PIP) element of the new Premium Service to be implemented.
Sarah and the team will arrange for the necessary reports and paperwork to be prepared. The complete process will take some weeks, however the disruption to your investment strategy, as cash is moved from Fidelity to RJIS, should be only a matter of days. In mid-May I wish to start the process with two more clients and do the same in mid-June and mid-July. We will then pause until mid-September.
What is your preference currently? Please think about you have going on (e.g. house moves, holidays etc.) and how you feel about the concept. Once you have please reply to this note stating one of the following:
- May
- June
- July
- September (at the earliest)
I will then be in touch and act accordingly with an outline proposal a follow up Zoom etc. And please don’t worry, I will not hold you to your answer!
24/05/23
Since I last emailed, about a month ago, a fair bit has happened.
Clients There are six of you in the process of moving and Sarah is working through what needs to be done. A further three are waiting in the wings for a mid June start and a few more of you are yet to decide for sure. Sarah is managing the workflow very well and so far things have run smoothly. Things will be a bit slower these next few days as it is half-term next week, things will still happen in the background but it won't be until 5 June before we are back at our desks.
Strategy It has been six weeks since the first "in and out" cycle was completed. The investment we are using for this part of the PIP strategy (VEVE) has fluctuated little since.
On 4 May the price was 27p away from the point at which I would have bought again. It is now 3% above that price. Perhaps I should not have waited for that last 27p? Hindsight is wonderful, but discipline is better. The target price as £64, it was not reached so no investment was made. We continue to wait. Patiently. With discipline. £64 remains the target price as it is 5% below the most recent high at the start of February 2023.
23/06/23
It has been a month since I last sent an update.... Clients
There are now nine of you in the process of moving across. Some money for some of you has already arrived at RJIS. It now a matter of biding our time until the "price is right", more on that to follow. Progress as been as expected and the processing procedure relatively straightforward and we are getting better at managing the process.
Strategy In the last month the investment we are using (VEVE) has fluctuated quite a bit but not significantly enough. Our target price is £64, and we have been as close as £65.66, which is not very close. We did set a new recent high figure though. On 13 June the price reached £67.85. This price close to the previous high price (set more than six months ago) and is more "accurate" as it incorporates all the updated economic data and sentiment etc.
It is therefore "sturdier" in my opinion and therefore our new yardstick. 5% less than that figure is £64.46 and that is therefore the price at which we will buy. As I type the price is £66.25 which is 2.36% below the new high.
20/07/23
Here is an update on cash balance interest and the new target buy price for PIP.... Cash
RJIS has increased their interest rates. All cash balances above £100,000 attract 3% pa interest which will be added to your account rather than paid out. This is a 70% increase from 1.75% and goes a long way towards offsetting RJIS' platform fee.
PIP Strategy The we are using (VEVE) for PIP reached a new recent closing high of £68.60 last night.
That's the highest closing price since December 2021. That means the price we will now buy VEVE for you is now £65.17. If VEVE drops to that level then we will buy it for you and then sell it again once it increases to £67.78.