Investor Views: 'My Post-Covid Plan'

Private investor Sabrina Thornton says lockdown caused her to look again at her finances 

Emma Simon 15 December, 2021 | 11:24AM
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Woman facing piggy bank

The pandemic has caused Dr Sabrina Thornton to reassess her financial priorities. Sabrina, who works at the University of Sheffield as a senior lecturer says: “The lockdown made me look at a whole range of things in a different way. There was a lot of uncertainty at the time and this made me want to ensure I was taking steps to build a safer and more secure future.”

“I have reassessed my finances and worked out a plan for investment and saving.”

Sabrina was encouraged to look at stock market-based options, which are more risky but potentially more rewarding. “I didn’t really know where to start initially. Even signing up to a platform and working out whether you want an ISA or a dealing account can be a bit daunting.” 

Sabrina, who is in her early 40s, is aware that far fewer women than men among her peers have their own investment plans and portfolios. But she adds: “I think it’s important though to build my own financial security and I have been glad I have taken this step.”

Sabrina has opened both a Stocks and shares ISA and a general investment account with AJ Bell as well as a SIPP account.

When it comes to investment Sabrina has invested in a couple of funds alongside some direct shareholdings. One of her first investments was into Fundsmith Equity, the popular fund run by Terry Smith. This Gold-rated fund has delivered excellent returns to investors in recent years, and Sabrina says it has given a good start to her investment portfolio. 

According to Morningstar data the fund has delivered annualised returns of 18.18% over the past three years. 

Direct Shareholdings

Sabrina has also invested directly in a number of company shares. “I tend to buy shares in companies I know well and have had personal experience buying their products or using their services. I will do research, but often follow my gut instinct based on whether they are delivering for their customers.”

She currently invests in around 14 different companies, and when choosing stocks she has tried to diversify across different sectors and regions, with holdings in the UK, Europe, Japan and the US.

For example she currently has a holding in the UK-based housebuilder Redrow (RDW). This company has benefited from a buoyant housing market in the UK in recent years, and a series of Government initiatives designed to boost the number of new homes built and help first-time buyers onto the property ladder. According to Morningstar data, Redrow investors have seen total annualised returns of 15.34% over the past three years, comfortably outperforming the 6.71% returns from the FTSE 100 over this period. 

Sabrina also has a holding in the luxury goods company and recent stock of the week LVMH (MC), which owns the Louis Vuitton brand, as well as the Moet and Hennessey labels. This is another company that has seen its share price soar in recent years, from €147 at the start of 2016 to €710 today. 

Morningstar analysts say this company has “a portfolio of leading brands in several luxury niches, which should allow it to generate economic profits well into the future”. Over half the company’s profits are from its fashion and leather brands, where it also owns Fendi and Loro Piana as well as Louis Vuitton. Alongside its wine and spirits business LVMH also owns the Dior and Guerlain perfume brands, and the luxury jewellery brand, Bulgari. 

When it comes to US stocks Sabrina has holdings in American Express (AXP), Amazon (AMZN) and Apple (AAPL), all of which have benefited from a large increase in technology shares.

Lloyds and Oatly Have Disappointed

Sabrina typically has just a small amount invested in each of these holdings. “I have looked to consolidate some of my holdings, and have sold a couple of stocks that have not performed as well and used this money to top up other holdings.”

For example she recently sold a holding in Lloyds Banking Group (LLOY), after the shares in this bank did not appear to progressing. The share price fell after she invested, so when it climbed back to break-even point she decided to sell and reinvest her money elsewhere in her current holdings to strengthen further the earnings. 

However, a recent investment in the oat-milk manufacturer Oatly (OTLY) has not delivered anticipated returns. “The share price had been buoyant initially, but it has gone down quite significantly since I invested. I don’t want to sell it and crystalise these losses so I am just leaving it and hoping for some recovery. Fortunately I only have a small amount invested in this company.” 

Sabrina says: “It can feel like you are taking on a lot of risk when it comes to investing. You certainly need a strong heart. I never saw myself as an investor, but I am glad I have taken this step, and starting to take control of my financial security and future retirement.” 

 

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk