Uncertainty is something that investors must learn to live with if they are ever to be successful. In fact, they should do more than just learn to live with it; they should positively take advantage of it.
Continue reading “The fog of investing – A nautical parable”Category: Investment strategy
Why you should use investment checklists and a written plan
Most stock pickers don’t use investment checklists or follow a written plan which they can improve over time. I think that’s a big mistake, and it’s probably one of the biggest reasons why the majority of private investors underperform the market.
Continue reading “Why you should use investment checklists and a written plan”How to find shares that pay a reliable dividend
Reliable dividends are the cornerstone of a defensive, income-focused portfolio. But what’s the best way to find these shares, and just how reliable are they?
Continue reading “How to find shares that pay a reliable dividend”A brief guide to dividend Income and capital growth
The returns that you’ll get from participating in the stock market will come from two distinct sources. The first is income from dividends, and the second is capital growth from share price appreciation.
Continue reading “A brief guide to dividend Income and capital growth”How to be a long-term investor
Most investors focus far too much on the short-term. They look at how a company has performed in the last year, and they look at its share price movements over the past few weeks or months. They’ll read the news, follow the latest updates and then move in or out of shares based on what they think will happen in the months ahead.
Continue reading “How to be a long-term investor”Diversifying your shares: Some additional factors
In my last post, I asked, “How many different shares should you hold in your portfolio?”. However, there is more to creating a diversified portfolio than simply owning shares from many different companies.
Continue reading “Diversifying your shares: Some additional factors”How many different shares should you hold in your portfolio?
At its heart, diversification is a simple concept and one with which you’re probably already familiar, but understanding the basics is important.
I would say that at least 80% of your investment results will come from a dedicated and consistent application of the basics and only 20% from anything that looks even remotely clever.
But back to that question: Just how many different shares should you hold in your portfolio?
Continue reading “How many different shares should you hold in your portfolio?”Why closet index trackers need to be regulated out of existence
The point of most actively managed investment funds is to beat the market, but in order to beat the market, they must, in some way, be different from the market.
Continue reading “Why closet index trackers need to be regulated out of existence”Pension fund managers: Are they ignoring sustainability risks?
Most people would expect pension fund managers to take a long-term view of the investments they manage, but as Prince Charles recently pointed out, that isn’t always the case.
Continue reading “Pension fund managers: Are they ignoring sustainability risks?”How to get a progressive dividend income from your shares
Progressive dividends are the Holy Grail for many investors. They want steady, reliable dividends paid out from the companies they own because they want a progressive income from their portfolio as a whole.
Continue reading “How to get a progressive dividend income from your shares”What is defensive value investing?
Since the financial crisis and market crash of 2007/8, defensive investing has become all the rage, and it’s easy to see why.
With what seems like an endless flood of bad economic news, tinged with talk of great recessions and depressions, investors want a “safe haven” where they can park their assets and insulate themselves from uncertainty and capital loss.
Continue reading “What is defensive value investing?”Why a diversified portfolio is easier to manage than a concentrated one
I’ve had a few conversations with investors recently about how time-consuming it is to run a diversified portfolio of hand-picked shares. It seems obvious enough. You have to think about the strategy, and you’ve got to find the shares, evaluate them and buy them. Then you have to check every day to see what your shares are doing, what the economy’s doing, what the Bank of England’s doing, and all manner of other things.
Continue reading “Why a diversified portfolio is easier to manage than a concentrated one”3 Reasons why property investors should consider the stock market
The UK is obsessed with property investing and the property market, but not the stock market. The stock market is generally thought to be high-risk, confusing, and no place for the inexperienced. But is that fair?
Continue reading “3 Reasons why property investors should consider the stock market”Are these 3 investment mistakes costing you 6 percent a year?
The average active, private investor underperforms the stock market by anything up to 6 percent a year.
6 percent may not sound like much when compared to the 20 percent or so that many investors expect, but consider this:
The team behind the Barclays Equity Gilt Study found that the stock market returns about 5% a year after inflation. If we assume that inflation will be 2% (the Bank of England’s target), then this gives a total expected future return of 7%.
If that turns out to be true, then the average active investor will get returns of around 1% before inflation but minus 1% once inflation is factored in.
Continue reading “Are these 3 investment mistakes costing you 6 percent a year?”An alternative approach to stock market forecasts
When the Bank of England first began publishing their “fan charts”, I immediately became a fan of the fan charts. They bring to life the uncertainty which is implicit in most forecasts.
Continue reading “An alternative approach to stock market forecasts”How to be a great investor, by choice
Like any activity where the results are affected by talent, some people are born to be great investors; but most are not. Most private investors fail to match the returns of professional investors, and most professional investors fail to match the returns of a simple index tracking strategy.
Continue reading “How to be a great investor, by choice”The investor’s mindset
The most important thing for active, self-directed stock market investors to have is the right mindset. Having the right mindset can help you ride out the ups and downs of the market and keep you focused on the things that really matter.
Continue reading “The investor’s mindset”When is a good time to invest in the stock market?
How do you know when stock market returns are going to be fantastic? Was it possible to know, in 1985, that the FTSE 100 was going to have an amazing, almost seven-fold run-up over the next 15 years? Or that in 1999 the FTSE 100 was going to go precisely nowhere for more than a decade?
Continue reading “When is a good time to invest in the stock market?”When it’s raining, buy suncream
Being a contrarian investor is a no-brainer for many of the world’s top investors. It’s just the nature of the business. But being a contrarian isn’t always a good idea, nor is it always necessary in order to be a successful investor.
Continue reading “When it’s raining, buy suncream”How to set and use investment goals
Like most long-term projects, it’s important to have sensible goals when investing so that you have a final destination in mind at all times.
Continue reading “How to set and use investment goals”