Luckily, you’ve got just over £28,000 ready to be invested as well as the proceeds for the Lindsell Train fund if you do sell it, so I’d suggest achieving greater diversification by putting this cash to work.
I think adding funds or investment trusts would make the most sense to spread your risk while sparing you the challenge of having to keep up with lots of different companies during your precious retirement years.
Since you’ve got your eye on dividends, I think some income funds would suit you well. Firstly, how about City of London, a UK equity income fund that has shown strong historical performance.
The trust is a “dividend hero”, having raised its annual dividend for 57 consecutive years. It yields 5.1pc currently and has a low ongoing charge of 0.37pc, which has helped it outperform rivals over the past 10 years.
Beyond the UK, I think your portfolio would benefit from an element of exposure to Europe, a region that is lower risk than the emerging markets and hosts some quality companies that should hopefully provide your portfolio with greater geographical reach, dividends, and growth.
Take a look at Blackrock Continental European Income which aims to provide an above average income return from its equity investments without sacrificing capital growth.
Its 41 holdings, which include semiconductor firm ASML, Nestle, and Novo Nordisk (now Europe’s largest company on the back of its weight loss drug), yield 4.3pc. Since launch in 2011 it has easily outpaced its benchmark, returning 182pc compared with 132pc.
The bond market is also an area to consider, given the sharp rise in yields this year.
Jupiter Strategic Bond is a good one-stop shop investing in bond markets around the world and offers a yield of 4.7pc. With central banks at or close to the peak of the rate hiking cycle, and bond prices near multi-year lows, now is a good chance to invest.
Although short-term, we could see more pain for bond prices before they pick up again, if inflation remains higher for longer than investors anticipate.
Safe-haven bonds (like gilts and US Treasuries) rallied this week after war broke out in the Middle East, showing that bonds are still a source of stability in a portfolio when markets are worried, even in this period of volatile inflation data.
Finally on your Dunelm holding, I know you described this as a risk that didn’t pay off, so I’m guessing you must have bought it sometime during the covid-era DIY investing boom when its shares went through the roof.
However – it has been recovering well since last September, so it may be one to keep a hold of.
The share price is up around 40pc year-on-year and it is trading on a price to earnings ratio of 13.8, which isn’t dirt cheap but looks attractive compared to other retailers like B&M European Value Retail at 16.3, Peta at Home at 15.9 and Moonpig Group at 20.6.
Plus – all the analysts except one have either a hold or buy recommendation on the stock.
Wishing you a happy and healthy retirement and good luck with your investment journey.
