Each year I use the investment criteria outlined by Benjamin Graham in his book The Intelligent Investor to pick my portfolio of bargain shares. The system, contrarian as it may first seem, has stood the test of time, outperforming the FTSE All-Share index in all bar one of the past 12 years and returning a compound annual return of 17.2 per cent in this time, including a record breaking 146 per cent performance in 2003. To put this in perspective, the FTSE All-Share has risen from 2607 to 3088 in the same period - an annual gain of only 1.4 per cent. So £10,000 invested in our first Bargain Portfolio and reinvested every subsequent year in the following portfolio would now be worth £67,233. And there is little sign that this investment strategy is losing its lustre with the 2009 portfolio rising by 53 per cent and the 2010 portfolio already 47 per cent ahead.
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