DIY-Investors Sharepicks for 2011

Subscribers to the diy-investors.com website will be aware that we picked two virtual portfolios for 2011. The first took a notional £10,000 and invested this equally into ten shares. The second was more focussed, spreading the fund equally between five shares. Although this is OK as a comparison with the annual ritual that the mainstream newspapers engage in, it doesn't reflect the reality of my approach as an active DIY-Investor.

I have therefore taken up the challenge of  actively managing two (mirror) virtual portfolios, using the same sharepicks as my starting point. However, I am applying the portfolio management techniques (as set out in chapter 14 of my book "Picking Winning Shares", coupled with the selling techniques as set out in chapter 15).

So far, the only change that I have made was to have sold MBL group (incurring a loss to the portfolio of £418), following the deterioration of the price action after the profit warning on 31st January 2011. The proceeds were invested in Pendragon (2431 shares purchased at 23.25p). This has, so far, proved to be the correct move as MBL Group has now dropped to 12p (having had the contract for the supply to Morrisons terminated, as announced on 15th March 2011).

I'm currently monitoring the virtual shareholdings in the two actively managed portfolios and at diy-investors.com, we'll be comparing the passive and actively managed virtual funds quarterly as we go through the year. We'll circulate the first quarter results to our subscribers over the weekend of 2nd/3rd April.

I believe that I can outperform the passive virtual funds - but by how much over the full 12 months? Anyone like to offer an opinion as to how many percentage basis points this might be?