Beginners' Portfolio Up 22%!

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LONDON -- It's been nearly two months since our end-of-2012 valuation update, so how is the Beginners' Portfolio doing?

In short, it's up 22.6% since we made our first purchase of Vodafone Group (LSE: VOD  ) (NASDAQ: VOD  ) on May 18 of last year. Since then, Vodafone has been on a bit of a rollercoaster ride. By August it was nicely up, but the tail end of the year saw a slump as low as 154 pence -- partly based on tough conditions in Europe leading to falling service revenues. But data revenue is up, and Vodafone's global reach helped it gain a new contract with German giant ThyssenKrupp last week. Ace U.K. investor Neil Woodford famously sold Vodafone this month, but I'm happy to go against the guru, and I still think Vodafone is a buy.

Company

Shares

Buy price

Total Cost (pounds)

Bid Price*

Proceeds (pounds)

Price Change

Vodafone

289

168.5 pence

499.51

163.5 pence

462.52

(7.4%)

Tesco

159

305.5 pence

498.23

373.6 pence

584.02

17.2%

GlaxoSmithKline

34

1,440.5 pence

502.22

1,474 pence

491.16

(2.2%)

Persimmon

79

617.9 pence

500.55

898 pence

699.42

39.7%

Blinkx

1,319

36.9 pence

499.68

93 pence

1,216.67

143.5%

BP

112

434.5 pence

499.01

452 pence

497.25

(0.4%)

Rio Tinto

16

3,048.4 pence

500.18

3,519.5 pence

553.12

10.6%

BAE Systems

146

332.3 pence

497.59

350 pence

501

0.7%

Apple

2

$458.40

605.98

$452.60

548.25

(9.5%)

Dividends

       

91.62

 

Total

   

4,602.95

 

5,645.02

22.6%

*Bid prices are from mid-afternoon Monday while markets were open so I could get accurate spreads.

The winners
In Tesco (LSE: TSCO  ) , I sided with that other guru, Warren Buffett, who dipped in for a large helping when the price slumped last January in response to a poor Christmas period. Subsequent updates from the U.K.'s biggest supermarket have shown that the company's turnaround plans are bearing fruit, and the share price has regained a good deal of its loss. We're up 17% on Tesco since our purchase on May 23, and it is definitely still a buy for me.

Our biggest winner so far is clearly Blinkx (LSE: BLNX  ) , the video technology developer, whose shares surged more than 20% earlier this month when the company told us that full-year sales could be ahead of target. I have been pleasantly surprised by the rapid rise we've seen from Blinkx, as I was expecting growth to be a bit slower. But these things can happen with high-tech growth shares, and we should just smile and be grateful when they do.

Persimmon (LSE: PSN  ) has also done well for us, as the homebuilding sector has recovered strongly over the past six months. The share price did dip a bit on Monday to 898 pence despite full-year results showing a 52% rise in underlying pre-tax profit, with a 6% rise in completions and a 6% rise in average selling price. Persimmon is due to pay a 75 pence-per-share dividend on June 30, but that will be it until a planned 95 pence payout two years later.

Valuation
Since the last update, we've had a final dividend from BP to add 10.08 pounds to the pot, a final dividend from GlaxoSmithKline of 7.48 pounds, and approximately 3.50 pounds as a quarterly dividend from Apple. The extra cash all helps take us to that 22.6% rise -- and that's offer-to-bid, with all charges accounted for, representing what such a portfolio would actually raise should it all be sold.

It's still early days, and we're in this for the long run, so valuations are not that important now -- but it is nice to see things going well!

As you know, I consider income from dividends to be a core part of a long-term portfolio -- whether you take it to spend or reinvest it in more shares, there's nothing wrong with good old cash, whatever your strategy. And that's why I recommend the latest Fool report, "The Motley Fool's Top Income Share For 2013," in which our top analysts identify a share they believe will provide handsome dividend income for years to come. But it will only be available for a limited period, so click here to get your copy today.

I also think you should get a copy of "What Every New Investor Needs To Know," as it really does help beginners with some of the basics.


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