Making Quicker Decisions

DairyFarmer

Hi everyone,

I find that i am very slow at making decisions, in terms of managing my money. I found various stocks in 2024 i wanted to invest in after doing some research. I feel i am needing confirmation from others that a stock or investment would be good, rather than making decisions myself.

If i had the courage to invest in 2024 in the stocks i researched i would have made around 30% now. How can i improve my courage to be happy with making decisions about my finances myself please? 

I am in my 50s and wanting to create some additional income for my retirement. 

Best wishes.

Brie

You sound very risk averse which is not necessarily a bad thing.  So maybe the thing to do is to talk to a professional about investing rather than a bunch of internetters.  The pro should be an independent financial adviser not someone tied just to a particular firm.

But if you did want my advice I'd say you might be happiest investing a set amount each month into a share ISA where the money is going into some sorts of mutual funds so there's the relative safety net of 1 fund that is made up of numerous/hundreds/thousands of shares so that it is less of a worry to you.  

jimjames

DairyFarmer said:

If i had the courage to invest in 2024 in the stocks i researched i would have made around 30% now. How can i improve my courage to be happy with making decisions about my finances myself please? 

Very easy to look back at the ones you could have made 30% on and ignore the ones that would have lost you 30%. From the sound of your post you've not got an existing portfolio and if that's the case then building up investments using funds would be a much less risky option than trying to find the stocks that might rise 30%. That's not a realistic return to be looking for long term.

DairyFarmer

Brie said:

You sound very risk averse which is not necessarily a bad thing.  So maybe the thing to do is to talk to a professional about investing rather than a bunch of internetters.  The pro should be an independent financial adviser not someone tied just to a particular firm.

But if you did want my advice I'd say you might be happiest investing a set amount each month into a share ISA where the money is going into some sorts of mutual funds so there's the relative safety net of 1 fund that is made up of numerous/hundreds/thousands of shares so that it is less of a worry to you.  

Thanks for the response, i think you are correct that i should see an independent financial adviser. I will look into the mutual funds you have mentioned. 

jimjames said:

DairyFarmer said:

If i had the courage to invest in 2024 in the stocks i researched i would have made around 30% now. How can i improve my courage to be happy with making decisions about my finances myself please? 

Very easy to look back at the ones you could have made 30% on and ignore the ones that would have lost you 30%. From the sound of your post you've not got an existing portfolio and if that's the case then building up investments using funds would be a much less risky option than trying to find the stocks that might rise 30%. That's not a realistic return to be looking for long term.

Thanks for the comment. I will look into building up investments using funds. 

Albermarle

Thanks for the response, i think you are correct that i should see an independent financial adviser. I will look into the mutual funds you have mentioned. 

With an IFA, good to be aware of a few  things.
1) They are not suitable for small investors. You need at least £50K probably double.
2) Their charges mount up over the long term, although they may end up saving you money.
3) They will almost certainly never recommend you to buy individual shares.
4) They will be wanting to look at the detail of your overall personal and financial position. So they will need details about your family, any properties you own, cash savings, pension provision, your objectives etc.

Alexland

I can see why you would hesitate to buy individual companies because anything could happen - you could perhaps get rich or lose it all.

Sometimes even the employees don't know what's going wrong in a business so what edge do external shareholders have?

IMHO its better to invest with funds which diversify across enough holdings you get a flatter risk profile and a more predicable long term outcome.

At the moment multi asset fund series aimed at different risk levels such as the HSBC Global Strategy series are looking attractive as they mix stock market exposure with fixed interest bonds which pay a good long term rate. Or if you want a bit more risk then perhaps a global index tracker fund.

IvanOpinion

A couple of suggestions to ease analysis paralysis
- drip feed money into the share by buying a bit each month (make sure the purchase costs do not outweigh the investment return)
- look for a fund/ETF that contains one or more of the companies you are interested in
- keep things simple and 'buy the world' using a global index tracker

Eyeful

1. Stop trying to shoot the lights out.
Academic research repeatably show that after charges & fees Professional Active Fund Managers with all their resources fail to beat a simple Major Global Index most of the time. So i doubt you will be able to either.

2. Stop investing in single shares.
Learn simple investing instead. This boils down to using a low cost Global Multi Asset Fund where you only need to pick the share/bond split that you are happy with.
Examples:
https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds
 https://www.assetmanagement.hsbc.co.uk/en/intermediary/capabilities/multi-asset/hsbc-global-strategy-portfolios

3. Watch this video: https://www.kroijer.com/

george4064

As others have said, just invest via diversified index funds and avoid the ‘if I bought this or that I would’ve gained 30% last year’. By buying global diversified index funds you are practically investing in every investable company in the universe, so you don’t win or lose, you simply get the broad market return. Guaranteed.

wmb194

Another way is to build positions slowly. So you think something is promising but you start out small. The nice thing about the commission free brokers e.g., T212, Freetrade, CMC Invest is that this is no longer financially prohibitive.