PIN subscribers with good short-term memories will understand the irony of the headline and the first sub-heading. Just three months ago, when reviewing the quarterly performance of the PIN Property Fund (a fictional fund consisting of 10 property-related UK companies that we created just over five years ago), the world was a completely different place and, after a stunning Q4 which saw the PIN Fund appreciate by 18.3%, hitting 73% in total for the year, the headline read “It doesn’t get much better than this”, with a sub-heading of “Strong in all areas”.

A lot can change in three months. In fact, to be much more accurate, an awful lot can change in just six weeks. I remember “looking in on” the housebuilder share prices in the third week of February and thinking “this quarter is going to be even better than the last quarter for the PIN Fund”. At that time, the share prices for housebuilders like Taylor Wimpey were soaring, up 20-22% since the start of the year, and the biggest focus points in the UK were (now trivial) problems like Brexit negotiations and a lack of construction workers.

So how bad was the first quarter for the shares in our Fund? Brutal - from peak to trough they collapsed by more than 50%. However, for the quarter overall, the Fund lost 29.8% of its value, compared to a 25% fall in the FTSE 100 Index. But it is worth noting that over the past two quarters combined, the FTSE 100 is down 22.6%, while our Fund is down 17.0%. Also, since the creation of our PIN Fund 5.5 years ago, total returns are still a healthy 57.7%, while the FTSE 100 is down by 17.4% in the same timeframe.

Where do we go from here? Well we certainly don’t panic sell. It would be hard to argue that most of the bad news coming from the COVID-19 pandemic has not already been written into most share prices by now and when taking a “post-COVID” long-term view of the market, with nearly all epidemiologists expecting a vaccine to be available before next autumn, I think it is actually time to consider buying.

I use the word “consider” only because I believe that the real trough in prices will come at some point later in the current quarter (Q2). However, as we only write quarterly updates for the PIN Fund, I will buy now. The Fund has been holding £9,000 in cash ever since Zoopla shares were delisted from the London Stock Exchange in Q3 2018 (we sold them at a 90% profit), with the intention of using that cash to “buy into the dip” and this is one hell of a dip to buy into. Purchase prices listed below were at time of writing, (after close of markets on Friday 3 April 2020).

I have decided to split the £9,000 allocation equally into three different housebuilder shares: Barratt Developments, Taylor Wimpey and Bellway.