Consistent Strategy

robertbanking

Hello you wonderful and helpful people, that always provide excellent advice and you are all exceptional here. I do hope you are having a relaxing weekend so far.

I please kindly wondered in regards to managing a portfolio of stocks for instance 10 - 15, the best way to constantly achieve profits over the market average each year? For instance is it best to reduce holdings that have grown a certain percentage and find new stocks, or maybe add to stocks that are performing better than expected please? If anyone kindly had any thoughts on the best way to manage your portfolio and select new stocks each year i would be forever grateful.

Thank you so much for your time and your support. Look after yourself and keep healthy. With my every best wish. 

Albermarle

I please kindly wondered in regards to managing a portfolio of stocks for instance 10 - 15, the best way to constantly achieve profits over the market average each year?

I think we would all like to know that !!

 For instance is it best to reduce holdings that have grown a certain percentage and find new stocks, or maybe add to stocks that are performing better than expected please? 

If you ask 10 people that question you will get 10 different answers, as there is no right or wrong answer, it is all down to opinion/personality.

dunstonh

I please kindly wondered in regards to managing a portfolio of stocks for instance 10 - 15, the best way to constantly achieve profits over the market average each year?

There is no way possible to achieve that.

For instance is it best to reduce holdings that have grown a certain percentage and find new stocks,

Usually not.

or maybe add to stocks that are performing better than expected please?

No. Sometimes the opposite is better.

An economic cycle is around 15 years (and some events seem to cycle over longer periods).   In the cycle, you will get periods that will suit certain assets but not others.  You will never know in advance when it is going to change or how long it will be for before it changes again.

Notepad_Phil

Very few people are able to consistently beat the market average and I doubt that any of those people are posters on here.

I have occasionally dabbled in individual shares but I only do it for a bit of fun and with a very small percentage of my total portfolio. The rest is mainly invested in passive global funds which over the long term get closer to the market average and beat  the vast majority of fund managers who are paid a lot more than me to try to beat market averages.

Albermarle

The rest is mainly invested in passive global funds which over the long term get closer to the market average and beat  the vast majority of fund managers who are paid a lot more than me to try to beat market averages.

Also not sure what the big deal is in 'beating the market average' ,unless you are a professional with an objective to do that.

Getting the market average via trackers etc is perfectly OK for the vast majority of investors, and should bring good growth in the long term, which is the general idea.

wmb194

There have always been strategies around running your winners, cutting your losses or doing something in between e.g., Google 'top slicing.' Finding new companies and collective investments to invest in is an ongoing process and you can find ideas all around but a time worn one is to regularly read something like the FT and its investment magazine, Investors' Chronicle.

OP, you regularly ask these theoretical questions but have you actually invested in anything to date? One way to learn is to get stuck in. You don't need to risk a lot of money, indeed you could run a hypothetical portfolio easily enough.

Linton

Having an aim of making profits above market average does not make sense for serious investing.  The problem is that the techniques for maximising return( eg choosing a small number of companies that you "know" are going to do well) also maximise losses if they fail.  This can approach gambling where there is a small chance of making a large gain and a larger chance of a wipe-out.

If you are investing for a purpose such as retirement or buying a house a better approach is to invest to minimise the chances of failing to get the return you need.  This implies caution.

Audaxer

robertbanking said:

I please kindly wondered in regards to managing a portfolio of stocks for instance 10 - 15, the best way to constantly achieve profits over the market average each year? 

I wouldn't recommend trying to manage a portfolio of individual stocks unless you are a very experienced and knowledgeable investor. I think even experienced investors on here are more likely to have a number of well diversified funds and/or Investment Trusts covering different sectors. Some will instead have one or more multi asset funds to give them a globally diversified portfolio. 

robertbanking

Thank you very much for all your posts and support, i truly appreciate your input, that is very kind of you.

Audaxer that is a very sensible recommendation to look into a number of well diversified funds and/or Investment Trusts covering different sectors, i will start my research here. I truly appreciate your input with this, rather than the risk of selecting individual stocks.

wmb194 thank you so much for your post i found that very valuable in particular 'top slicing' and regularly reading the FT for new investments ideas. I have invested in a few dividend stocks to date such as Coca Cola however i could have found a better entry point as i bought when the stock was relatively high. I was going to possibly look into a few more volatile stocks that did not pay dividends that had more prospects for growth. 

I appreciate all your input, you are all amazing here. Thank you so much for your valuable posts.  

barnstar2077

Personally, I would just pick a globally diversified fund and invest in there and forget about it.  The trouble is it isn't very exciting, so it is very tempting to dabble, but that would be a mistake imo.

Albermarle

barnstar2077 said:

Personally, I would just pick a globally diversified fund and invest in there and forget about it.  The trouble is it isn't very exciting, so it is very tempting to dabble, but that would be a mistake imo.

As is often said on here, long term buy and hold investing is boring, but ultimately the best way for the average investor.