Trading Update

The lesson I have learnt from the recent market correction is the importance of diversity in a portfolio.

My growth portfolio only has one bank and has US technology, US biotech and oil stocks. It has been relatively unaffected by the recent volatility. My mortgage portfolio on the other hand contains two banks and a UK real estate stock. It has been hammered by the correction, with the three stocks all down over 20%.

I hoped that owning a real estate stock would increase the diversity of the portfolio but British Land often seems to just follow the banks. Maybe it is because the current crisis concerns mortgages - leading to bad sentiment towards real estate.

Thankfully there have been two bright sparks in my mortgage portfolio - eBay and BHP Billiton.

The eBay share price has finally got some serious upwards momentum - heading for $40 for the first time in well over a year. The listing count is finally rising now that last year's pricing changes have been anniversaried and investors are relieved and able to focus on the other positives.

BLT has been going up all year. Analysts were plain wrong when they assumed that commodity prices would fall this year. Prices have gone up and taken BLT's share price with it.

My bank stocks will recover and I am looking forward to some nice dividends in October. But for the moment I am grateful for the limited diversity that I had.