Beginners' Portfolio Up 22%!

This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.

It's nearly two months since our end-of-2012 valuation update, so how is the Beginners' Portfolio doing?

In short, it's up 22.6% since we made our first purchase, of VodafoneGroup (LSE: VOD) (NASDAQ: VOD.US), on 18 May last year. Since then, Vodafone has been on a bit of a roller-coaster ride and by August was nicely up, but the tail end of the year saw a slump as low as 154p -- partly based on tough conditions in Europe leading to falling service revenues. But data revenues are up, and Vodafone's global reach helped it gain a new contract with German giant ThyssenKrupp last week. Ace UK investor Neil Woodford famously sold Vodafone this month, but I'm happy to go against the guru, and I still think Vodafone is a 'buy'.

CompanySharesBuy priceTotal costBid price *ProceedsGain/loss% change
Vodafone 289 168.5p £499.51 163.5p £462.52 -£37.00 -7.4%
Tesco 159 305.5p £498.23 373.6p £584.02 £85.79 17.2%
GlaxoSmithKline 34 1,440.5p £502.22 1,474.0p £491.16 -£11.06 -2.2%
Persimmon 79 617.9p £500.55 898.0p £699.42 £198.87 39.7%
Blinkx 1,319 36.9p £499.68 93.0p £1,216.67 £716.99 143.5%
BP 112 434.5p £499.01 452.9p £497.25 -£1.76 -0.4%
Rio Tinto 16 3,048.4p £500.18 3,519.5p £553.12 £52.94 10.6%
BAE Systems 146 332.3p £497.59 350.0p £501.00 £3.41 0.7%
Apple 2 $458.4 £605.98 $452.6 £548.25 -£57.73 -9.5%
Dividends £91.62 £91.62
Total £4,602.95 £5,645.02 £1,038.58 22.6%

* Bid prices are from mid-afternoon Monday while markets were open, so I could get accurate spreads

The winners

In Tesco (LSE: TSCO), I sided with that other guru, Warren Buffett, who dipped in for a large helping when the price slumped last January in response to a poor Christmas period. Subsequent updates from the UK's biggest supermarket have shown that the company's turnaround plans are bearing fruit, and the share price has regained a good deal of its loss. We're up 17% on Tesco since our purchase on 23 May, and it is definitely still a 'buy' for me.

Our biggest winner so far is clearly Blinkx (LSE: BLNX), the video technology developer, whose shares surged more than 20% earlier this month when the company told us that full-year sales could be ahead of target. I have been pleasantly surprised by the rapid rise we've seen from Blinkx, as I was expecting growth to be a bit slower. But these things can happen with high-tech growth shares, and we should just smile and be grateful when they do.

Persimmon (LSE: PSN) has done well for us as well, as the housebuilding sector has recovered strongly over the past six months. The share price did dip a bit on Monday to 898p despite full-year results showing a 52% rise in underlying pre-tax profit, with a 6% rise in completions and a 6% rise in average selling price. Persimmon is due to pay a 75p-per-share dividend on 30 June, but that will be it until a planned 95p payout two years later.

Valuation

Since the last update, we've had a final dividend from BP to add £10.08 to the pot, a final dividend from GlaxoSmithKline of £7.48, and approximately £3.50 as a quarterly dividend from Apple. The extra cash all helps take us to that 22.6% rise -- and that's offer-to-bid, with all charges accounted for, and represents what such a portfolio would actually raise should it all be sold.

It's still early days and we're in this for the long run, so valuations are not that important now -- but it is nice to see things going well!

Finally, as you know, I consider income from dividends to be a core part of a long-term portfolio -- whether you take it to spend or reinvest it in more shares, there's nothing wrong with good old cash, whatever your strategy.

And that's why I recommend the latest Fool report, "The Motley Fool's Top Income Share For 2013", in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.

But it will only be available for a limited period, so click here to get your copy today.

I also think you should get a copy of "What Every New Investor Needs To Know", as it really does help beginners with some of the basics.

Read Full Story

FROM OUR PARTNERS