Monthly Reviews / 22 May 2026

Capital Research Review 03

The past four weeks have not produced a dramatic return. The portfolio has remained close to its original starting value, finishing at £1,983.39 compared with a cost basis of approximately £1,999. On the surface, that means the account is down £15.61, or around 0.78%.

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Snapshot
PERIOD END
£1,983.39
CASH BALANCE
£246.34
VS COST BASIS
−0.78%

The past four weeks have not produced a dramatic return. The portfolio has remained close to its original starting value, finishing at £1,983.39 compared with a cost basis of approximately £1,999. On the surface, that means the account is down £15.61, or around 0.78%.

However, the most important development during this period has not been the total return. It has been the introduction of a meaningful cash position and the decisions that have followed from it. I sold Alphabet, realised a profit and then resisted the temptation to immediately replace it with another investment.

That has proved more difficult than I expected.

Selling One of My Best Holdings
At the beginning of this period, the portfolio was worth approximately £2,000. Around £1,780 was invested, while roughly £220 was held in cash. The cash came mainly from selling Alphabet.

Alphabet had become one of the strongest and highest-quality positions in the account. I sold the holding and realised a profit of approximately £40.63. I was pleased to bank the gain. Until that point, most of the portfolio’s recovery existed only on paper. Selling Alphabet meant part of that recovery had become a realised result.

It also created a cash position equal to approximately 11% of the portfolio. That made the account feel more protected. I no longer needed every holding to continue rising because I had money available outside the market.

However, selling Alphabet also created a new problem. I had removed one of the businesses I trusted most.

Alphabet was not a speculative investment that had suddenly risen for no clear reason. It was a highly profitable company with a strong balance sheet, an established advertising business and meaningful exposure to artificial intelligence. I therefore did not want to take the proceeds and immediately invest them in a weaker company simply because I disliked seeing cash in the account.

If I did that, the sale would have achieved very little. I would have exchanged a high-quality business for a lower-quality idea while pretending that I was managing risk.

The purpose of the sale was to create flexibility, and that flexibility only had value if I was willing to wait.

The Account After Alphabet
The following week felt like a transition. The portfolio was worth approximately £1,986.69, with around £220.82 held in cash. The account was slightly below where it began, but it did not feel broken. It had already recovered from the earlier low around £1,860, moved above £2,000 and then settled back near breakeven with cash available.

QQQA, VUAG, ASML and Airbnb were among the stronger holdings. They continued to give the portfolio exposure to large technology companies, the broader market, semiconductor infrastructure and travel.

Gold, Rheinmetall, Realty Income and Meta were less helpful. Gold was down approximately 9.3% and had become one of the largest cash losses in the account. Rheinmetall was down around 26%, making it the biggest percentage loser.

These positions created an interesting contrast with the Alphabet sale. I had sold one of the strongest holdings and continued owning some of the weakest. That can look illogical when viewed only through recent performance. However, I did not want to make decisions solely based on whether a position was green or red.

Alphabet had reached a point where taking profit and building cash felt sensible. Selling Rheinmetall or gold required a separate decision about whether their original roles in the portfolio still made sense.

I continued to believe that gold had value as a hedge, even though its short-term performance was poor. I also continued to believe that higher European defence spending could support Rheinmetall over the longer term. That did not guarantee either investment would recover. It simply meant I needed a better reason to sell than the fact that the numbers were red.

My preferred plan was to use some of the cash to buy Alphabet again if the price returned towards a more attractive level. I began focusing on approximately $365 as an area where I would seriously reconsider the position. The important thing was that I did not want to chase it immediately after selling.

Increasing the Cash Position
During the eleventh week, the portfolio declined slightly to approximately £1,974.37. The fall was around £12.32, or 0.62%. It was disappointing, but it was completely different from the earlier drawdown. The account remained close to the starting value, and no single investment had destroyed the week.

Meta, VUAG and the remaining Nasdaq exposure helped hold the portfolio together, while ASML and Symbotic were weaker. I sold one QQQA share for £25.41, increasing the estimated cash balance to approximately £246.34.

The QQQA sale was a small trim rather than a rejection of the technology sector. I kept exposure to the Nasdaq, but the sale increased my flexibility. This felt like a more measured decision than removing the entire position.

The cash balance was now large enough to be meaningful, but at the same time it increased the pressure to eventually do something with it. Cash looks sensible when markets are falling. It can feel uncomfortable when strong companies continue rising without me.

That is where patience becomes difficult. It is not simply the ability to wait through a decline. It is also the ability to watch opportunities move away without responding emotionally.

The danger was that I would eventually convince myself to buy something average just to end the discomfort of waiting. I needed to remember that holding cash was itself a decision.

A Small Recovery
The final week of this period brought a modest recovery. The account increased from approximately £1,974.37 to £1,983.39, a gain of £9.02, or around 0.46%.

The portfolio remained slightly below the original cost basis, but it moved in the right direction without Alphabet being in the account.

ASML, Symbotic and Rheinmetall were the main contributors. ASML rose by approximately 7.1%, adding around £9.16 to the portfolio. The recovery reinforced my belief in the long-term importance of semiconductor manufacturing equipment.

Symbotic rose by approximately 13.3%, adding around £8.22. The gain was useful, but it did not remove the risks surrounding the position. A company capable of rising 13% in one week can also fall by a similar amount.

Rheinmetall gained around 8.6%, adding approximately £7.45. This was encouraging after a difficult period, although I did not think one stronger week justified aggressively increasing the position.

NextEra Energy was the largest weekly drag, falling approximately 5.9%. Meta and gold were also weaker. The result was a portfolio that improved slightly but remained mixed underneath, which is probably an accurate description of the entire four-week period.

What I Have Learned About Cash
The biggest lesson from these weeks is that cash is not simply money waiting to be invested. It is an active part of the portfolio.

Cash reduces the account’s exposure when markets become expensive or uncertain. It also gives me the ability to respond when a high-quality company becomes available at a better price. More importantly, it creates time.

When nearly all the capital is invested, every new opportunity requires selling an existing holding or adding more money. With cash available, I can make a decision without immediately disturbing the rest of the portfolio.

However, cash also creates its own behavioural risk. I can become impatient. I can feel as though I am missing out, and I can start lowering my standards because I want the money to be doing something. The last four weeks have shown me that raising cash is the easy part. Redeploying it well is much harder.

Selling Alphabet only becomes a good decision if I use the flexibility properly. If I replace it with a weaker business at an unattractive price, the realised profit will not mean very much.

I have also learned that selling a strong investment can be emotionally complicated. Taking profit feels good, but watching the company continue without me does not. I need to avoid judging the decision entirely by what the share price does immediately afterwards.

The relevant question is whether the decision was reasonable based on the information, valuation and portfolio structure at the time.

At the end of these four weeks, the portfolio is worth £1,983.39 and the cash balance is approximately £246.34. The account is slightly below where it began, but I have realised a genuine profit, reduced some market exposure and created the ability to act when a better opportunity appears.

I do not know whether Alphabet will return to the price I want. I also do not know whether holding cash will prove better than remaining fully invested. What I do know is that I do not need to force the answer.

For now, waiting is part of the investment decision.