Making Investing Decisions

robertbanking

Hello you very intelligent and amazing individuals that make up these forums. I sincerely hope you are doing well and keeping happy this weekend. 

I have spent the last few months learning about Value Investing, as i always used to put the small amount of money i had in an Easy Access savings account. I feel i have learned enough to make decisions on my own and learned alot of good knowledge. 

I still however after doing alot of research on a stock, might worry about buying a stock when its at an all time high on the stock chart. Further then worrying if a stock will increase revenue for the next few years, despite doing research. Can i please ask whats the best way of removing this anxiety, would simply getting started and having a checklist, recording which stocks perform well and ones that dont perform well, would it help please? Then trying to learn from my mistakes, or does anyone kindly please have any other advice, it would mean the world to me and be highly appreciated any advice you could give.

Sending you lots of good wishes and i truly hope you continue to have a wonderful life. I very much hope you are enjoying this winter period and i wish you all the very best for the future. Very best wishes.  

wmb194

*a lot. Have you actually bought anything yet?

sevenhills

I look at -

The price-to-earnings ratio is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).
The balance sheet reports a company's assets, liabilities and shareholder equity.

A company's price-to-book ratio is the company's current stock price per share divided by its book value per share. (BVPS). This shows the market valuation of a company compared to its book value.

I am sure the experts look at many more things and understand them better than me, so I like to look up the recommendations in the Investors Chronicle.

https://markets.investorschronicle.co.uk/data/equities

It's all just a gamble to me!

Bostonerimus1

Forget about gambling investing in single stocks, the vast majority of retail investors but investment funds that are made up of hundreds or even thousands of individual stocks. I invest in index funds that essentially track large stock market indexes and so you are betting on the economy in general, not a single company.

LHW99

IMO even active funds / ITs are likely to be better than individual stocks unless you really know the company inside out.

Otherwise a (global) tracker or multi-asset fund.

Grandst2

Most professional stockpickers underperform the market over the long term so what hope have you got. Everyone wants to be Warren Buffet but turn out to be Neil Woodford.

Hoenir

Even Warren Buffet isn't infallible. As lost over £250 million trading Tesco shares some years back. Berkshire Hathaway is actually an industrial conglomerate with fingers in many pies. 

aroominyork

Hoenir said:

Berkshire Hathaway is actually an industrial conglomerate with fingers in many pies. 

And while that provides diversification compared to individual stocks, you shouldn't buy it unless you especially enjoy apple pie.

aroominyork

wmb194 said:

*a lot. 

Thankyou for making that correction.

cloud_dog

There are funds that focus on 'value' investing.  Why not spread your risk and let them do the leg work for you?

For example...

https://www.justetf.com/uk/find-etf.html?assetClass=class-equity&region=World&equityStrategy=Value

aroominyork

cloud_dog said:

There are funds that focus on 'value' investing.  Why not spread your risk and let them do the leg work for you?

For example...

https://www.justetf.com/uk/find-etf.html?assetClass=class-equity&region=World&equityStrategy=Value

These are smart beta funds which use algorithms to assess 'value' against a handful of metrics. The three ETFs under 'MSCI World Enhanced Value' are essentially the same and quite hardcore with about 400 holdings. Picture it as starting with the most value-intense holding and, as you add more holdings, you work along the spectrum towards less value-intense. A less hardcore value-focus smart beta ETF is Invesco's PSRW with about 1150 holdings. To see how this plays out in practice look at Morningstar's Stock Style > Weight tables for iShares IWFV and for Invesco's PSRW. You can also dig into sectoral and regional differences: eg iShares has more Japan; PSRW has more US.