Stocking picking / Investment subscription websites

bigadaj

Sounds like you actually want a few investment trusts.

Marine_life

bigadaj wrote: »

Sounds like you actually want a few investment trusts.

Have been looking at those but need to do more research.

I have invested a small amount in a PE investment trust as a first toe dip.

slowpoke_rodriguez

Investors Chronicle is well worth the £40 a quarter subscription. The tips are often worth further investigation and some of the articles open new avenues. The share search and analysis is good.
I also use ADVFN (free for a month or two, then a bit pricey) and Investegate for up to the minute company news.
Most share investments are prompted elsewhere though, completely at random.

Be prepared to spend a few quid to learn what you're doing.

grey_gym_sock

Marine_life wrote: »

I am qualified (ICAEW) accountant and work in M&A so I know a bit about those things.

that does seem relevant to stock picking. however, professional active fund managers often have comparable relevant background; and they also have the backing of researchers and data sources which you probably don't have; and they can work on stock-picking full-time, unlike you; and yet (as a group) they generally fail to outperform the market after deducting their charges, though they may outperform a little before charges.

if you buy-and-hold shares for long periods - as you say you intend to do - then your costs may be substantially lower than the total costs of holding an actively managed fund. so you do have 1 advantage over professional active managers.

however, your costs for buying individual shares will probably be at least as high as just buying a tracker fund for UK shares (i assume you're only looking at buying individual shares for the UK equities allocation of your portfolio) - unless you're investing very large sums. so it comes back to whether your picks can beat the market.

and note that, while you can measure your picks' performance against a suitable index (if you keep decent records), a lot of performance (good or bad) is down to luck, so it may take a very long time - decades - to determine whether you have (positive or negative) skill.

none of the above is to say you shouldn't buy individual shares. providing you don't take excessive risks. and you know what you're getting yourself into.

it is easy to think that you have some relevant skills, and are quite smart, so it should be easy to outperform the market. but investing doesn't work quite like that. you can have relevant skills, and still underperform. so long as you're aware of that, feel free to go ahead if you still want to.

I am however, not a sector expert so while I can interpret financials, valuations, PE ratios etc. I would not claim to be an expert of individual industries. I also recognize that a lot of the market moves are not driven by logic. I am not looking to make money as a day trader, essentially I am buying into companies that offer good yields with a view to holding over an extended period and with a reasonable amount of security underpinning the yield (either financial e.g. dividend cover etc. or non-financial e.g. the company has a stated policy linked to paying a high or increasing dividend and has the cash cover to back up that claim). I expect that individual shares will make up no more than 10% of my portfolio and I am looking for diversity across sectors and geographies to spread the risk.

only putting 10% in individual shares keeps the risk down. and long holding periods are good to keep your costs down - or, to look at it the other way round, frequent trading is almost certain to give poor results.

the 1 bit i'd question is the focus on dividends. financial academics don't seem to think there is any advantage in going for high-dividend shares - for instance, they don't think a high dividend yield is a good proxy for a "value" share. and it will tend to make you omit certain market sectors.

also, in the current environment, it seems plausible that some higher-dividend shares have been bid up in price by investors hungry for any decent yield, now that bonds yield so little. so it may be a bad time to go into higher yield shares.

OTOH, we are currently stuck in a period of very low economic growth, in which defensive companies (providing relatively essential goods and services) may do better than companies who will only do well in a boom. and some defensive companies are also high-yield, though not all.

if you buy a broad range of companies from different sectors, and hold them for a long time, IMHO the results will probably be OK. it may or may not beat just buying a index fund, but will definitely be a lot more effort - are you basically looking for a new hobby? and it will be hard to tell whether out-/under-performance is luck or skill.

Marine_life

grey_gym_sock wrote: »

are you basically looking for a new hobby?

A little bit.

I'm not necessarily focused on beating the market (although that depends what you mean as the FTSE currently yields about 3.5% so I would be aiming to beat that). As well as good yield I want some upside capital potential but that's not my number 1 criteria.

Thrugelmir

grey_gym_sock wrote: »

none of the above is to say you shouldn't buy individual shares. providing you don't take excessive risks. and you know what you're getting yourself into.

Deepwater Horizon is a reminder of why even Blue Chip companies can be hit by the unexpected. All shares carry risks in various guises.

dunstonh

Thrugelmir wrote: »

Deepwater Horizon is a reminder of why even Blue Chip companies can be hit by the unexpected. All shares carry risks in various guises.

And the credit crunch decimated the banks and there wouldnt be too many sharedealing investors who didnt have banks in their portfolio when that happened.

Kendall80

My brief flirtation with the likes of Motley Fool made me realise that they use their articles in an attempt to affect small - mid cap share prices. Either to get down to an entry price or to cover their own shorts. With the usual funny endings... "Check out these 5 shares - guaranteed multi-baggers - download our guide now"