Monday, 29 January 2007

New additions to the portfolio?

I keep thinking that in order to make my million I've got to keep investing. I have some shares, a stock isa, cash isa and a sharebuilder account which is putting money into a chinese ETF. I put some money in zopa and have the rest sitting in cash in the bank earning as much interest as possible at the moment in the UK (about 5.7%).

So what to add to that list?

Real Estate
Real Estate
Real Estate

However, I can't currently spot any bargains in real estate or anything that I can actually afford. In order to lift my passive income, I have been looking at 'buy to let' - or property I can rent out. However, the maths just doesn't work. 2 bed properties are £150k+ anywhere close to me - they rent out at £600-750 a month. A mortgage on £125k (over 25 yrs at 7%) would require payments of £850 per month. That's an outgoing of £150 per month. Not good business sense - that's before maintenance, insurance, tax, etc. Nightmare.

I can't even find anything to buy for my own home and therefore live in rented accomodation which costs me a fortune per month. The only way to increase my net worth is to cut down on expenses. More on that in another column.

In the meantime until the deal I'm looking for arrives, I'm following these shares closely over the next few weeks and am waiting to pounce on at least one at the first sign of weakness:

BHP Billiton - miners
Burren Energy - oil explorers
HSBC - banker
Associated British Foods - foods and Primark
Begbies Traynor - debt specialists
Close Home - property investors

All except Burren will give me coverage in a sector I don't currently have. In addition I think I should put some more into the stock ISA as I haven't used my full allowance. Perhaps the addition of New Star's Property fund would be a good choice.