Welcome back to week 3 of our journey to £10,000!
If you are stumbling across this group of posts for the first time, it’s great to have you here. You may also be interested in looking back at week 1 of this journey where I discuss this project in greater detail.
For those of you returning, you will already be familiar with the goal of this project which is to grow an investment account to £10,000 in the shortest time possible and share the journey. You will remember three target dates have been set, each one harder than the previous…
Bronze – Target completion by the end of December 2026
Silver – Target completion by the end of June 2026
Gold – Target completion by the end of December 2025
The updates in this article will see this portfolio reach 16.5% of the goal
Last week change +0.8%
As always, a quick disclaimer – although my lack of experience may be apparent, I feel it is really important to make sure it is clear the perspective from which I am approaching this project…
Disclaimer:
I am not a financial adviser, and the information I share is based solely on my personal investment journey as an average individual. Please remember that past performance of the market is not a guarantee of future results. Always do your own research and consider seeking advice from a qualified professional before making any financial decisions. Only invest what you are willing to accept losing.
Last Week’s Portfolio Performance
Last week looked good for the portfolio. All stocks increased in value with the exception of Coca-Cola, Sandvik and Procter & Gamble. The overall return was up by 0.59%.
The uninvested cash earned 10p in interest.
This Week’s Investments
This week, a slightly larger figure of £100 will be divided up in the same fashion:
- 20% towards growth stocks
- 40% towards dividend stocks
- 40% towards ETFs
Growth Percentile
Continuing from week 1, I will divide the growth portion of my investments for the week between Cameco and Sandvik.
Cameco is perceived as overvalued using Simply Wall Streets analysis, but this could be due to a lower profit margin this annum. Cameco’s earnings per share are expected to grow over 40% per annum for the next 3 years and I still have a positive outlook on the potential contribution this stock could make towards my goal.
Dividend Percentile
This week, I plan to add a new stock to the portfolio in the form of a Real Estate Investment Trust (REIT), adding a completely new sector to the mix. REITs offer investors a way to invest in commercial property without needing to have the upfront funding to purchase the property in its entirety. The company I will be incorporating within my dividend percentile will be Realty Income Corp. (O).
Realty Income Corp. (O)
By investing in the Vanguard S&P 500, we are already exposing some of our capital to this company. 0.10% of the S&P 500 is allocated to O, amazingly this is 23,410,474 shares at the time of writing at $53.38 per share. Incredibly, this 0.10% of the Vanguard S&P 500’s financial allocation makes them the largest investor in O holding 15.9% of its shares.
O’s portfolio of properties is extensive claiming to cover 90 industries. While I have not driven down to pick apart all 90, the top 10 include:
- Grocery stores – 10.4%
- Convenience Stores – 9.4%
- Dollar Stores – 6.5%
- Home Improvement – 6.0%
- Restaurants – Quick Service – 4.9%
- Drug Stores – 4.8%
- Automotive Service – 4.5%
- Health and Fitness – 4.4%
- Restaurants - Casual Dining -4.2%
- General Merchandise – 3.3%
What does this mean for us as investors? It means that our risk is diluted across varying sectors helping to smooth the effects of any sector specific issues.
In addition to this safety net, property for business is a must in most cases, thus is a cost most businesses have to factor in. While a company may look at changing locations to manage their costs either through the reduction of rental fees or improving operational deficiencies, they will ultimately need property in some form.
Realty Income also has an enormous financial backing meaning they are able to continue purchasing property and outpace smaller competitors strengthening their position in the market.
Another layer of security is the net lease method Realty Income use for their properties. This sees their tenants covering associated expenses such as taxes, maintenance, insurances etc… this means Realty Income is protected from any spikes in costs making their ability to predict cash flow accurately.
Referring to Realty Income’s official homepage, they boast 654 consecutive dividend payments to their investors and are currently operating with a 5.88% dividend yield, meaning for every pound invested you would see £0.0588 return per annum. Realty Income has taken the title of The Monthly Dividend Company and take pride in this.
Simply Wall St. have given Realty Income a “below fair value” rating using their discounted cash flow analysis. With the company forecasting 19% growth per annum over the next 3 years and a reducing debt, I see this as a great time to take part in investing within this stock.
ETF Percentile
Finally moving on to ETFs, the Vanguard S&P 500 remains my preferred safe investment…
The ETF allocation of my weekly investment will be spent here.
Next Week…
Keep an eye out next week for a further update on this portfolio as we journey our way to £10,000.
If you missed last week, you can find it here
If you like these articles and are interested in the progression of this portfolio, hit the like button at the top or bottom of this article. Your input means a lot will help to shape the future of this blog.
Have a great week!
