Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • stphnstevey
    • By stphnstevey 9th Mar 18, 8:18 PM
    • 2,816Posts
    • 466Thanks
    stphnstevey
    Equities Strategy
    • #1
    • 9th Mar 18, 8:18 PM
    Equities Strategy 9th Mar 18 at 8:18 PM
    There seems to be a fair number of intelligent investors on here that have turned there hand to equities

    How do you invest in equities and what strategies do you use?
Page 1
    • bostonerimus
    • By bostonerimus 9th Mar 18, 9:15 PM
    • 1,936 Posts
    • 1,277 Thanks
    bostonerimus
    • #2
    • 9th Mar 18, 9:15 PM
    • #2
    • 9th Mar 18, 9:15 PM
    Forget about strategies.......if you want to invest in equities learn about asset allocation and expect to be invested for at least 10 years.....20 or 30 is better.
    Misanthrope in search of similar for mutual loathing
    • Thrugelmir
    • By Thrugelmir 9th Mar 18, 9:51 PM
    • 58,925 Posts
    • 52,250 Thanks
    Thrugelmir
    • #3
    • 9th Mar 18, 9:51 PM
    • #3
    • 9th Mar 18, 9:51 PM
    There seems to be a fair number of intelligent investors on here that have turned there hand to equities

    How do you invest in equities and what strategies do you use?
    Originally posted by stphnstevey
    Buy and hold. Invest for the long term. If you wouldn't own the shares for 10 years then don't buy them at all.

    Invest into cash generative companies.

    Don't expect to find value amongst larger companies. You'll be getting the news long after others have. Nor will you will access to the detailed research that gets published.

    If you invest in a contrarian manner. Expect to underperform the market as well as out perform.

    Cut your losses promptly.

    At the core of your portfolio invest in a broad diversified fund or investment trust. Boring but safe.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • ValiantSon
    • By ValiantSon 9th Mar 18, 10:53 PM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    • #4
    • 9th Mar 18, 10:53 PM
    • #4
    • 9th Mar 18, 10:53 PM
    Buy and hold. Invest for the long term. If you wouldn't own the shares for 10 years then don't buy them at all.

    Invest into cash generative companies.

    Don't expect to find value amongst larger companies. You'll be getting the news long after others have. Nor will you will access to the detailed research that gets published.

    If you invest in a contrarian manner. Expect to underperform the market as well as out perform.

    Cut your losses promptly.

    At the core of your portfolio invest in a broad diversified fund or investment trust. Boring but safe.
    Originally posted by Thrugelmir
    Perhaps you could explain what you mean by this as the OP could easily take it to mean that they should sell investments that have fallen in value. That would be terrible advice as it would crystalise a paper loss, whereas remaining invested would most likely result in an increase in value over the long term. I'm sure that you didn't mean to suggest this, but that is how the sentence reads.
    • stphnstevey
    • By stphnstevey 9th Mar 18, 11:01 PM
    • 2,816 Posts
    • 466 Thanks
    stphnstevey
    • #5
    • 9th Mar 18, 11:01 PM
    • #5
    • 9th Mar 18, 11:01 PM
    Thanks for this

    I have seen FUNDSMITH mentioned a few times, why are others keen on their funds?
    • Thrugelmir
    • By Thrugelmir 9th Mar 18, 11:07 PM
    • 58,925 Posts
    • 52,250 Thanks
    Thrugelmir
    • #6
    • 9th Mar 18, 11:07 PM
    • #6
    • 9th Mar 18, 11:07 PM
    That would be terrible advice as it would crystalise a paper loss, whereas remaining invested would most likely result in an increase in value over the long term.
    Originally posted by ValiantSon
    This precisely why I made this point. There's no room for sentimentality when investing. More often or not. The money would be better invested in an existing portfolios winners.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • bowlhead99
    • By bowlhead99 9th Mar 18, 11:07 PM
    • 7,975 Posts
    • 14,513 Thanks
    bowlhead99
    • #7
    • 9th Mar 18, 11:07 PM
    • #7
    • 9th Mar 18, 11:07 PM
    Perhaps you could explain what you mean by this as the OP could easily take it to mean that they should sell investments that have fallen in value. That would be terrible advice as it would crystalise a paper loss, whereas remaining invested would most likely result in an increase in value over the long term. I'm sure that you didn't mean to suggest this, but that is how the sentence reads.
    Originally posted by ValiantSon
    If you were investing into 'funds', your advice to remain invested while the values are low makes perfect sense because nobody wants to sell at a low value and miss them going back up over the long term.

    However, Thrug seems to be talking about his strategies for investing into individual equities, cash generative companies etc.

    When you are going out on a limb to select individual companies rather than buying a fund that holds 'the market generally', you will inevitably select some which do not perform as you wish and a fall in value can be an indication that something in your initial investment thesis was wrong; or a reason to invest that you had initially found compelling, no longer holds true.

    If you belligerently hold on to the shares in the belief that you wouldn't have made a mistake and what goes down must go up, you end up being a holder in HMV, Blockbuster, Enron, Northern Rock etc as they become less and less valuable and then go pop. Better to recognise your mistakes or poor choices and cut them, rather than hold on believing 'this one owes me money because I paid x for it' as some naive investors can end up thinking.

    To an extent, with funds it's different as though they can suffer a permanent loss of value through bad investment choices, they don't end up calling the receivers in and having no money to pay out to owners, as individual companies can and do.
    Last edited by bowlhead99; 10-03-2018 at 4:47 PM.
    • Voyager2002
    • By Voyager2002 9th Mar 18, 11:10 PM
    • 12,143 Posts
    • 8,262 Thanks
    Voyager2002
    • #8
    • 9th Mar 18, 11:10 PM
    • #8
    • 9th Mar 18, 11:10 PM
    This precisely why I made this point. There's no room for sentimentality when investing. More often or not. The money would be better invested in an existing portfolios winners.
    Originally posted by Thrugelmir
    I also think that this is terrible advice: as is often pointed out, past performance is no guide to future results.
    • Alexland
    • By Alexland 9th Mar 18, 11:22 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    • #9
    • 9th Mar 18, 11:22 PM
    • #9
    • 9th Mar 18, 11:22 PM
    I wouldn't buy individual assets for which I was likely to need to make an urgent decision to reduce losses. I prefer funds where losses are buying opportunities.
    • ValiantSon
    • By ValiantSon 9th Mar 18, 11:27 PM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    If you were investing into 'funds', your advice to remain invested while the values are low makes perfect sense because nobody wants to sell at a low value and miss them going back up over the long term.

    However, Thrug seems to be talking about his strategies for investing into individual equities, cash generative companies etc.

    When you are going out on a limb to select individual companies rather buying a fund that holds 'the market generally', you will inevitably select some which do not perform as you wish and a fall in value can be an indication that something in your initial investment thesis was wrong; or a reason to invest that you had initially found compelling, no longer holds true.

    If you belligerently hold on to the shares in the belief that you wouldn't have made a mistake and what goes down must go up, you end up being a holder in HMV, Blockbuster, Enron, Northern Rock etc as they become less and less valuable and then go pop. Better to recognise your mistakes or poor choices and cut them, rather than hold on believing 'this one owes me money because I paid x for it' as some naive investors can end up thinking.

    To an extent, with funds it's different as though they can suffer a permanent loss of value through bad investment choices, they don't end up calling the receivers in and having no money to pay out to owners, as individual companies can and do.
    Originally posted by bowlhead99
    Perhaps wrongly, I assumed that he wasn't recommending investing in individual companies as that would be crazily high risk for a small investor (and especially one new to investing), so I took all comments to be about funds.
    • Thrugelmir
    • By Thrugelmir 9th Mar 18, 11:29 PM
    • 58,925 Posts
    • 52,250 Thanks
    Thrugelmir
    I also think that this is terrible advice: as is often pointed out, past performance is no guide to future results.
    Originally posted by Voyager2002
    This applies to funds not directly investing into equities. Totally different scenarios.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • bowlhead99
    • By bowlhead99 10th Mar 18, 12:06 AM
    • 7,975 Posts
    • 14,513 Thanks
    bowlhead99
    Perhaps wrongly, I assumed that he wasn't recommending investing in individual companies as that would be crazily high risk for a small investor (and especially one new to investing), so I took all comments to be about funds.
    Originally posted by ValiantSon
    The questions were about people's strategies for investing into equities and the comments in his reply were were about what types of shares / companies he would aim to invest in and some approaches he would take.

    Sometimes you just have to read the questions and the answers as written rather than read into them what you think the questions and answers should be.
    • rathernot
    • By rathernot 10th Mar 18, 8:43 AM
    • 256 Posts
    • 74 Thanks
    rathernot
    There seems to be a fair number of intelligent investors on here that have turned there hand to equities

    How do you invest in equities and what strategies do you use?
    Originally posted by stphnstevey
    Use funds or investment trusts so you get the benefits of diversity.

    Don't try to pick individual stocks yourself IMHO.
    • Voyager2002
    • By Voyager2002 10th Mar 18, 10:53 AM
    • 12,143 Posts
    • 8,262 Thanks
    Voyager2002
    The questions were about people's strategies for investing into equities and the comments in his reply were were about what types of shares / companies he would aim to invest in and some approaches he would take.

    Sometimes you just have to read the questions and the answers as written rather than read into them what you think the questions and answers should be.
    Originally posted by bowlhead99
    I think that for most of us, the essential strategy for equity investing is to use an equity-based collective vehicle (OIEC; Investment Trust; ETF) to spread the risk. That is of course just the starting point...
    • Voyager2002
    • By Voyager2002 10th Mar 18, 10:58 AM
    • 12,143 Posts
    • 8,262 Thanks
    Voyager2002
    This applies to funds not directly investing into equities. Totally different scenarios.
    Originally posted by Thrugelmir
    Well, maybe...

    I wonder how many of us could have distinguished between BP and RBS. And if such a distinction is not possible, then a 'buy and hold' strategy is going to make sense, obviously with sufficient diversification so that an individual company failing is not going to result in disaster for the portfolio.
    • BLB53
    • By BLB53 10th Mar 18, 11:41 AM
    • 1,306 Posts
    • 1,089 Thanks
    BLB53
    Keep it simple...a multi asset low cost global fund like Vanguard Lifestrategy will get the job done for many. Be sure to match you level of equities with your appetite for risk/volatility.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • LHW99
    • By LHW99 10th Mar 18, 1:47 PM
    • 1,317 Posts
    • 1,215 Thanks
    LHW99
    And if you do decide to look into individual shares, learn about stop losses
    • John-K
    • By John-K 10th Mar 18, 4:10 PM
    • 654 Posts
    • 1,016 Thanks
    John-K
    There seems to be a fair number of intelligent investors on here that have turned there hand to equities

    How do you invest in equities and what strategies do you use?
    Originally posted by stphnstevey
    I put about half of my gross income into broad-based trackers, then avoid looking at it.
    • TBC15
    • By TBC15 10th Mar 18, 5:06 PM
    • 493 Posts
    • 250 Thanks
    TBC15
    I don't invest in individual equites as I neither have the time or the skill to do a good job of it.

    That's why I prefer leaving it to someone who does have the time and the skill, a good fund manager.

    It works for me.
    • inflationbuster
    • By inflationbuster 10th Mar 18, 5:43 PM
    • 167 Posts
    • 46 Thanks
    inflationbuster
    Honestly no one can teach you how to pick and choose equities on a bulletin board. I learnt it all the hard way when l started investing late 2008 during one of the worst recessions in our lifetime.

    I was perhaps very lucky to miss allot of the carnage of companies going bust and put most of my offset mortgage into a plethora of FTSE 100 and FTSE 250 stocks that l felt would survive the recession. l used Wikipedia (the full list of company members are there) and FT stock filter to help me build a portfolio.

    It was a baptism of fire l can tell you that!

    I made plenty of mistakes along the way with one company going bust and numerous companies raising cash via rights issues and open offers. But l learnt a heck of allot as well it was probably for me the best time to learn the markets and made my best returns to date during 2009.

    To this date l still find it fun hunting out companies from the two main markets. But it's handwork researching. Think of it as another hobby as it will consume your time.

    Check out the Naked Trader book on investing if you're serious.

    If you're only after safe and paltry returns invest in a fund.
    Last edited by inflationbuster; 10-03-2018 at 5:48 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

148Posts Today

1,725Users online

Martin's Twitter