2020: What a year for individuals and investors

There has been bone silence from me. Blame 2020. Home schooling. Well wasn't that a total nightmare. Once you worked out that it was an impossible task for any sane individual, it was much better, but like anything, it was a process getting there.

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2020 has been weird no matter what your demographic

It has intensified any situation, for my mother alone, it makes her more alone, for me as a working mother with no time, it makes less time, for young adults, totally tough getting a new job, your new job evaporates and you are left wondering what next. Some industries have been whacked to outer space with business owners and employees left staring aghast wondering what to do next, a lucky few have been left better off.

What about ASX share investors in 2020? What about beginners like me?

In the market free fall, I felt brave buying ASX small caps and blue chips in small parcels. It felt almost unreal at the time, but in the hideous free fall of the share market, I felt brave, buying ASX small caps and blue chip shares. Watching the share price fall the next day, waiting, buying again in small parcels. Our advice was to buy quality companies in small parcels. And that is what I did.

What do Share investors do now? Do I take profits, do I hang on, do I buy more?

I always think other people are braver than me. But I had a go and pressed buy. It has worked out. Shares have risen. On paper, I've made money. Not on every share, but on most. Overall I'm up. I've got a solid mix of ASX Small Caps and Blue Chips but I admit, I'm now a bit confused on where to go from here. Do I take profits, do I hang on, do I buy more?

Small Caps - small companies fighting to be bigger than they are

I think I get Small Caps. I get small companies, fighting to be bigger, fighting to be more than they are. Maybe as an individual, I relate to it. I get that you put a small part of your money into a stock that Under the Radar Report has recommended, is well-run, is cheap, has a good niche, and has big plans.

Don't you just love the sound of it? I do.

And yes, I've invested in some absolute knockouts that were on our Best stocks to buy. Don't I wish I'd put everything into Macquarie Telecom (MAQ). Currently up 111.5%. Fortunately, I put in a few thousand and I'm very very happy. But I also bought Medical Developments (MVP) (I know I should have taken profits when I was told to but didn't because I was working too hard, my kids needed to get to netball and soccer and life got in the way), but it's okay. I'm hovering on break even. Tassal (TGR), Volpara Health (VHT), Austal (ASB)! ooh, don't I love that one and Hansen (HSN)!

Small Caps I get. You trade them. You are there to make money from them. You diversify, You buy 7-10. You invest to your risk profile and hopefully with luck, timing and some quality research you are up, and up and you re-invest for another day.

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The top 200 ASX shares: should you trade them or are they simply buy and hold investments?

Blue Chips, or the top 200 I find harder. In another age, my mother always said that you just hold onto your shares. Is that right? or have times moved on? The horse and cart is no longer a great investment and in the Great Depression led to a lot of lost money and a new engine. With COVID and climate change are we literally just getting a new world engine? Is it more than that? Is it still right to buy and hold your big named ASX shares? Disruptive is a word I previously only associated with my kids.

BHP: To keep for eternity or do you take profits?

Back to my mother who got BHP shares for her 21st birthday, which was well over 60 years ago. She  gives them to my nieces and nephews now for theirs. I bought only 100 of them at pretty much their lowest price during the COVID buying frenzy. I wish I'd bought more. But I've made just shy of 50% on my $2,500 investment. I kept wanting to buy more, but the price kept rising when the rest of the market was falling, and I couldn't face it. I wasn't brave enough. What do I do with these shares now? Do I sell, take the profit and put the money into another company? I don't think I'm going to get 50% returns again on BHP any time soon.

Maybe the real question that I've been debating is, should you trade Blue Chips or are they simply buy and hold investments?

CBA hasn’t delivered the goods thus far

I bought in a few price points during the COVID crisis and my average price is $62 and it's 15% of my portfolio. I've made a rookie mistake and I've got too much of my portfolio in banks. Combined with NAB 18%, ANZ 5% it makes a total of 40%! CBA is the one bank that is most expensive. I think I should sell at least a portion of it and recycle my investment money.

Making a decision that's right for me

Under the Radar's Blue Chip Report's advice has been to retain CBA for dividends, but I’ve got to take a leaf out of the Blue Chip Portfolio’s decision and make a decision that’s right for mine, I guess. Mum would say, oh you keep it and over time it will rise in value and give dividends. But I've got 15% of my investment locked away. Shouldn't I put that money to better use somewhere else targeting better growth?

Not even Professor Trelawney in Harry Potter was very good at looking into the swirling mirrored ball. Investing, I think I have to take a risk, be proud, take my profits and go my own way.

I'm going to sell BHP and sell at least half of my CBA shares. I'll monitor the market closely for the intra day/days market fluctuations and throw my hat in the ring again. For better for worse.

I'm working out that my personal risk profile is not dividends, it's growth.

If you are interested in learning more about the Blue Chip Stocks and how to invest in this area, read more here.

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Caroline Mark

Caroline Mark is the Founder and Publisher at Under the Radar Report, which provides independent ASX share research to help build investor’s share portfolio. Under the Radar Report is licensed to give general share financial advice only (ASFL: 409518). The author is not licensed to give personal financial advice and this commentary is for general information only.

Under the Radar Report is licensed to give general financial advice only (ASFL: 409518). The author does not own shares in any of the stocks mentioned.

Under the Radar Report is licensed to give general financial advice only (ASFL: 409518). The author does not own shares in any of the stocks mentioned.

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