Donal Fisher has been investing for around 20 years and his main motivation is to achieve financial security in retirement. While he would like to buy a property to live in after retiring, he also wants to ensure he has a “rainy day” fund.
Currently in his late 50s, Donal still works full-time and has built up a decent pension pot through his current and previous jobs (his background is in engineering, but he now teaches in further education). Over the years, he has invested in everything from cash and stocks to property and commodities, but currently the majority of his savings are in cash as he recently sold his home.
“I’m giving myself six months to decide on where to buy another one,” says Donal. “I’ve considered Spain as an option and have visited Valencia and Alicante in the past to gain a feel for value for money, but may in the end decide to buy in the UK again.”
Away from his workplace pensions, Donal, who lives with his girlfriend and has three grown up daughters from his previous marriage as well as a granddaughter, splits his money between Isas and personal pensions. Within these tax-efficient investments he invests in a mix of direct shareholdings, investment trusts, funds and ready-made portfolios.
Oil, Gold and Adventurous Funds
One of Donal’s more racy investments is directly into gold. He put money into the precious metal around five years ago and have since seen a “healthy increase” in its value. Dona has also invested directly in gold. Indeed, the price of the yellow metal is up 25% over the past year alone. Donald says: “I am considering buying more, particularly as governments around the globe seem intent on printing more currency.”
A more diversified choice among his investments is AJ Bell’s ready-made adventurous portfolio and Donal has recently put money into the investment trust Octopus Renewables Infrastructure (ORIT), which invests in renewable energy assets across Europe and Australia. This is a relatively new trust but Donal says he has been impressed with its “plans and professionalism” and that returns have been good so far. According to Morningstar data, the trust has delivered total returns of 7.81% over the past year.
At the start of last year’s lockdown, Donal sold shares in both BP (BP.) and Royal Dutch Shell (RDSA) at a profit. Both oil companies were subsequently hit by a lack of demand for petrol, oil and gas in the early months of lockdown and are now trading below their fair value estimate, according to Morningstar analysts. Indeed, Royal Dutch Shell has a five star rating from Morningstar, with its current price of 1321p significantly below its fair value estimate of 2500p. The company fell sharply out of favour in 2020 when it cut its dividend for the first time since World War II.
Morningstar analysts say: “In the last five years, Shell has taken the necessary steps to remain competitive in a world of $60/ barrel oil by reducing its cost base, which had become bloated after years of high oil prices. However, the recent crash in oil prices has prompted further action.”
My Shares Soared 700%
But one of Donal’s best recent investments has been in Wishbone Gold (WSBN) where he has seen a 700% increase on his money in a matter of months. He says: “This is a fabulous return, I am only regretting not investing more initially.”
The company is primarily involved in precious metals trading and has delivered a total return of 742% over the past 12 months. However, despite this rapid rise in share price, the longer -term returns have not been so positive: over three years the firm’s share price has fallen from around 51p to around 16p.
Donal is aware that sometimes share buys can be “fortuitous”, as in this case, and says he was initially attracted to the company by its name, which reminded him of a rock band he likes named Wishbone Ash!
And while he has made good returns from this investment, Donal admits that not all of his punts have been as profitable. He says: “I’ve had a few disasters over the years, you certainly can’t win them all. One of the most notable was New World Resources which melted away to zilch. However, if you do your own research, read widely and diversify, then the gains you make from your winners should overcome any losses from these losers.”
Of course, Covid-19 has been a worry in recent months and Donal is concerned about the ongoing effect this may have on markets generally. Luckily, he sold the majority of his Isa holdings a year ago, before the major sell-off in March, as he thought equity markets looked “bloated”. He is now also concerned that inflation may take off, partly as a response to the amount of money being printed by central banks, which could be a disaster for his pension and retirement plans.
Donal says: “At the end of the day, I’d like shift to part-time work when I get into my 60s. But I will have to see what the financial situation is; it is a bit of a worry as I won’t be getting my state pension until I am 67.”