Ask Colin

Why have you increased you holdings in the three LICs?

The full question was:

I have noticed that you have opted to allocate 12% each to your LICs double what you allocate to an individual stock. I was wondering if you could please share your thought processes about how you arrived at this allocation.


Actually, as of this week I have 18% of capital in each of the three LICs. This is shown in Portfolio Disclosure as soon as I complete the purchase.

What I am doing is to have  about half my capital in the three large, conservative and long established LICs. You are right that I had 12% of capital allocated to each of the LICs until this week. What has changed is that I sold out of the two ETFs I had, having learned what I wanted about how they operate, and the released capital plus part of my cash reserve has gone into the three LICs, so that each is now 18% of my capital. I have not updated the Stock Journal yet.