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  1. #1

    New start for 2018 - help please !

    I am an amateur investor but have been doing it for 50 years ! I have analysed my family’s SIPPs for 2017 and since 1/4/2016. One has gone up this year by 27% (all in US shares) , another 26% (in UK investment trusts changed once a month if I think they will continue a losing run) and my SIPP is a disaster making only 3% - serves me right for taking risks.

    I need to do better, as at some stage I might need to use it (I am 70 now). I have 100,000. What should I put it into apart from my favourites of : BIOG, FGT, FJV, HRI, HSL, IBT, MNKS, PCT, POLR, WWH, ATT, TRG, Castlefield Buffetology.

    I already have holdings of TEM, BUR, IGC, IBT, FJV, SEC, JMI, BIOG, BRSC, FGT, BNKR & WWH, FQUIT. Max value in any one share is 7,337 in FQUIT. Total value of those shares now is 41,000 (too much boitechnology I hear you say.....)

    Help please – and no scolding please – at least its my own money that I ‘gambled’ with.

  2. #2
    I can tell you what I'm doing.

    Stocks are quite expensive .. So I think you have to plan for lower likely returns at some point – whether that comes in the form of a crash, or a period of directionless markets.

    So if it's a crash, you probably want to own Quality stocks; if it's a low return 10 years, you want to minimise fees .. So I've been retreating back to the safety nets of Fundsmith and Lindsell Train Global, *and* buying more of those kinds of stocks individually.

    I'm a serial fund collector, but you don't really gain much diversifying beyond about 8 stocks – so I know holding several hundred/thousand via dozens of funds isn't efficient.

    And when you look at some of these giants, from Google to Johnson & Johnson, they are sort of like funds themselves (they buy up tech start-ups, rivals, and own multiple brands/franchises) – except sans fees, you find they provide about twice the income (not a bad thing if returns are going to be harder to come by) .. Or the other route is to take more risk: more Emerging Mkts, more sector bets (like Biotech) – but of course you have to be happy with a wider range of possible outcomes

  3. #3
    So, no longer Lifestrategy or Global Index Funds/Trust/ETFs?

  4. #4
    Speaking as another amateur investor (starting in 1966 in a very small way) but with more than a decade in advising others professionally as well until around 20 years ago, I can't see much to query in your choices of holdings, though like KL I wonder if you are spreading your money too widely and paying too much in fees for the privilege.

    Given that many equity markets are considered pricey by a number of professional investors and commentators (but not all), the watchword at the moment could be not to expect too much gain in 2018 after a pretty good 2017, and to protect what you have by avoiding any investments that have been bid up by more than is justified by changes in their fundamentals.

  5. #5
    Then I would start thinking about defensive strategies:
    a) Are my holdings displaying continuing share price momentum?
    b) Do I have any statistics on how they have performed in the past when the going has been tough?
    c) Which ITs or funds or individual companies have a track record of coping with bad times, such as rising costs of loans to fund the business, reduced demand for their products and services?
    d) Which ITs are willing and able to change tack in different environments (such as those that can invest various proportions in equities, cash, gold, property, bonds according to where they think reduced volatility lies)?
    e) Which managers both 'stick to their system' and take account of the fact that their operating environment has shifted direction?
    f) Which companies have a bullet-proof 'moat' against competition and can keep selling at the same margin even in bad times, because their customers have no alternative but to buy, even if it hurts?
    g) Which companies generate net cash and don't rely on borrowings?
    h) Which ones are flexible in their running costs (easy to mothball or restart production, easy to move activities geographically to suit changes in those countries that are strengthening or weakening)?
    h) Do I now have too high a percentage of my assets linked to the fortunes of any one or two or three specific holdings - excellent if you hold the right ones and they keep motoring upwards, but do think about what you stand to lose if they start motoring the other way!


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