What about the UK

Making money in dear old Blighty

Since I have abandoned trading in the UK you may think I have nothing to say about that market. In fact I am helping my daughter and son in law and, more recently, my wife to invest in the UK with some degree of success.

Neither want to be bothered with regular trading or watching the market. So, again using Vector Vest, I have designed a system which should enable them to make decent money while changing their selection of shares no more than twice a year. There is a caveat: if I see the market heading for a cliff, I would advise them to liquidate . Then wait, with cash ready, until the market looks more promising.

A tortoise on speed

My daughter bought her first batch of shares in August and should be replacing them about now. Her selection and the profits achieved were as shown below (details of individual shares are to be found by typing in their symbols at yahoo finance of google finance):

	Six month profit	profit per week over six moths	profit per week since 23/1
TSCO	13.1%	0.5%	1.3%
WTB	27.5%	1.0%	1.4%
BNZL	11.5%	0.4%	5.4%
DGE	15.9%	0.6%	1.3%
REX	4.4%	0.2%	-0.6%
LGEN	18.4%	0.7%	0.8%
Average	15.1%	0.6%	1.6%

The figures speak for themselves. The return over 6 months was 15.1% which compares with the FTSE which rose by 9.3% over the same period. The weekly increase achieved was 0.5% which, if sustained for a year would yield 31%.

I also show that since 23^rd January the shares have increased by 1.6% per week. The significance of this figure will be revealed in a moment.

The shares are selected on the basis that they are in the FTSE 350, they have a consistent and predictable earnings performance, high quality fundamentals, improving dividend payouts and the share price has lagged somewhat. 

The backtesting which I carried out before recommending this selection of shares predicted a decent outcome and what was achieved was in line with the prediction.

My daughter had ethical constraints on her final selection and these were taken into consideration so the pick was not exactly the one made by the filter, but it was close enough.

The tortoise gets supercharged

I ran the same filter for my wife on 23 January. The shares selected and their performance were as follows:

	profit since 23/1	profit per week since 23/1
INCH	14.3%	3.4%
ITV	8.7%	2.1%
ABF	12.0%	2.9%
ISYS	4.9%	1.2%
OXIG	7.9%	1.9%
Average	9.5%	2.3%

That average of 9.5% compares with the increase in the FTSE over the same period of 2.9% The rate of return here is astonishing. If it continued for a year it would yield over 100%.It also compares favourably with the return on my daughter’s portfolio which achieved 1.6% per week since January 23. This suggests that the idea that the portfolio ought to be refreshed every six months is valid.

We pass 14000

And how about the US market. The Dow has poked its nose above 14000. Its a little over 150 points below its all time high. Will it get there is the big question. I am fully invested so I guess I am on the side of the bulls. As always I am ready to throw in the towel at a moment's notice If I see the bears appearing in the wings.