A model portfolio from way back when: Why we chose these 12 shares

How to create your own model portfolio

Back in 2013 we created this model portfolio consisting of 12 shares as an easy way to be invested in the JSE / local stock market. We selected shares from different sectors, some for growth, some for income. This model portfolio will be re-adjusted over time as necessary. We believed these shares would outperform the rest of the market in the following 12 month period. Click on each to find out more.

1. Mustek

Because it was trading at a discount to NAV and underpriced.

JSE:MST

2. Reinet

Because it was trading at a discount to NAV of over 25%.

JSE:REI

3. Anglogold

Because it was our preferred share for gold exposure.

JSE:ANG

4. Sasol

Because it had a low PE ratio and is a Rand hedge.

JSE:SOL

5. Arrowhead-A

Because of good income from the property sector, 60c guaranteed.

JSE:AWA

6. Fountainhead

Because it had low risk and quality assets / properties.

JSE:FPT

7. JD Group

Because it had a very high dividend yield and was backed by Steinhoff.

JSE:JDG

8. Murray & Roberts

Because this was our chosen exposure to the construction sector.

JSE:MUR

9. Steinhoff

Because it had a low price/earnings ratio and is a Rand hegde.

JSE:SHF

10. Old Mutual

Because this was our chosen financial exposure and includes Nedbank.

JSE:OML

11. Woolworths

Because Woolies was our preferred (food) retailer.

JSE:WHL

12. The Foschini Group

Because the group had a low PE ratio and was expanding into Africa.

JSE:TFG

And how did it go?

Did the shares indeed outperform the market as expected? Yip, they sure did. We always use a stop loss to protect capital from downside risk and had to get out of 5 positions after they fell by more than 10%. The remaining 7 performed well and the resulting hit rate of 6 out of 10 is more than you need when trading with a 2:1 reward to risk ratio. 

12 shares for 12 months

Which 12 shares would you select for the next year? Tell us. Or ask us.

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