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  • FIRST POST
    • stphnstevey
    • By stphnstevey 9th Mar 18, 8:18 PM
    • 2,790Posts
    • 457Thanks
    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 2
    • ChesterDog
    • By ChesterDog 10th Mar 18, 7:49 PM
    • 881 Posts
    • 1,642 Thanks
    ChesterDog

    If you're only after safe and paltry returns invest in a fund.
    Originally posted by inflationbuster
    I manage about 20% a year, almost entirely from funds.
    I am one of the Dogs of the Index.
    • ValiantSon
    • By ValiantSon 10th Mar 18, 9:03 PM
    • 1,824 Posts
    • 1,693 Thanks
    ValiantSon
    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.
    Originally posted by inflationbuster
    Looks like you still have a lot to learn if you think that returns on investments in funds are necessarily paltry.
    • Alexland
    • By Alexland 10th Mar 18, 9:11 PM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    ...but they are mostly safer so generally a better risk adjusted return.
    • Thrugelmir
    • By Thrugelmir 10th Mar 18, 9:53 PM
    • 58,449 Posts
    • 51,823 Thanks
    Thrugelmir

    I wonder how many of us could have distinguished between BP and RBS.
    Originally posted by Voyager2002
    I'll repeat what I posted earlier.

    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.
    You may overlooked the fact that BP suffered from the Deepwater Horizon disaster. Resulting in the Company suspending dividends for 3 quarters. Likewise the disaster has cost the Company $65 billion and resulted in asset sales to fund this.

    Buying any shares carries a risk. That's the bottom line.

    Do you remember Hanson Trust, Trafalgar House, BTR, Hawker Siddley..............
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Thrugelmir
    • By Thrugelmir 10th Mar 18, 9:55 PM
    • 58,449 Posts
    • 51,823 Thanks
    Thrugelmir
    I manage about 20% a year, almost entirely from funds.
    Originally posted by ChesterDog
    Over what period of time?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Voyager2002
    • By Voyager2002 10th Mar 18, 10:02 PM
    • 12,071 Posts
    • 8,211 Thanks
    Voyager2002
    I'll repeat what I posted earlier.



    You may overlooked the fact that BP suffered from the Deepwater Horizon disaster. Resulting in the Company suspending dividends for 3 quarters. Likewise the disaster has cost the Company $65 billion and resulted in asset sales to fund this.

    Buying any shares carries a risk. That's the bottom line.

    Do you remember Hanson Trust, Trafalgar House, BTR, Hawker Siddley..............
    Originally posted by Thrugelmir
    That was the point. Anyone who bought BP right after the Deepwater Horizon disaster, when its share price was right down and its survival seemed doubtful, eventually did rather well. Whereas anyone who bought RBS when the shares suddenly looked like good value lived to regret the choice. Who among us could have distinguished between the two situations?
    • inflationbuster
    • By inflationbuster 10th Mar 18, 10:58 PM
    • 164 Posts
    • 45 Thanks
    inflationbuster
    Looks like you still have a lot to learn if you think that returns on investments in funds are necessarily paltry.
    Originally posted by ValiantSon
    If i'd of invested in some of the UK's top fund managers i.e., Neil Woodford (whom is well 'advertised' in the press) l wouldn't have done well compared to my equity returns.

    Woodford performance:

    http://www.moneyobserver.com/our-analysis/neil-woodford-out-to-prove-doubters-wrong

    Top 25 fund managers:

    http://www.moneyobserver.com/news/16-03-2017/revealed-25-top-performing-uk-fund-managers-over-past-decade

    I would most certainly put some cash into a fund in the next recession to get some exposure to the US market. Until that time however one is pleased with the returns from equities.
    • ValiantSon
    • By ValiantSon 10th Mar 18, 11:40 PM
    • 1,824 Posts
    • 1,693 Thanks
    ValiantSon
    If i'd of invested in some of the UK's top fund managers i.e., Neil Woodford (whom is well 'advertised' in the press) l wouldn't have done well compared to my equity returns.

    Woodford performance:

    http://www.moneyobserver.com/our-analysis/neil-woodford-out-to-prove-doubters-wrong
    Originally posted by inflationbuster
    Straw man argument. Neil Woodford is not the only fund manager. There are numerous different funds; picking one fund that performed poorly at one particular moment in time is an utterly specious argument.

    I would most certainly put some cash into a fund in the next recession to get some exposure to the US market. Until that time however one is pleased with the returns from equities.
    Originally posted by inflationbuster
    I'm delighted that you are pleased with the performance of your equities, but that doesn't in any way substantiate your view that funds deliver paltry returns.
    • Thrugelmir
    • By Thrugelmir 10th Mar 18, 11:53 PM
    • 58,449 Posts
    • 51,823 Thanks
    Thrugelmir
    That was the point. Anyone who bought BP right after the Deepwater Horizon disaster, when its share price was right down and its survival seemed doubtful, eventually did rather well. Whereas anyone who bought RBS when the shares suddenly looked like good value lived to regret the choice. Who among us could have distinguished between the two situations?
    Originally posted by Voyager2002
    Helps when BP declare and pay dividends in US $ though. As the actual dividend payout has been flat for the past 4 financial years. Without the exchange rate fall the shares wouldn't have appeared so attractive. BP remains a potential target for the likes of Exxon. Given the US's dislike of non US companies.

    If you held a tracker fund in 2008. You couldn't have avoided RBS in any event. As it was the largest bank in the world at the time. Likewise Northern Rock would have been valueless. Barclays shareholders being diluted by the much vaunted warrant issue.
    The list goes on.

    Personally I fish in smaller pools. Riskier but more rewarding as a hobby.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • bostonerimus
    • By bostonerimus 11th Mar 18, 3:45 AM
    • 1,818 Posts
    • 1,167 Thanks
    bostonerimus

    If you're only after safe and paltry returns invest in a fund.
    Originally posted by inflationbuster
    Equity funds are not safe, but their diversity means they have less risk than a single equity in the same sector.

    I imagine you are aware of the statistics of stock and bond market returns and so to maximize your chances of success you should design a portfolio to meet your requirements with the lowest risk possible.......efforts to maximize return without regard to risk are foolish. The effort to maintain a diverse portfolio of single stocks and bonds is time wasted when there are so many fund options......maybe there's an argument for individual bonds, but it's hard to make one for individual stocks.
    Misanthrope in search of similar for mutual loathing
    • Alexland
    • By Alexland 11th Mar 18, 7:26 AM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    Neil Woodford (whom is well 'advertised' in the press)
    Originally posted by inflationbuster
    Generally the higher the press coverage the more I would want to avoid a fund manager. In active my preference is for funds and trusts that struggle to get attention and quietly get on with their job doing what they say on the tin.

    Alex
    Last edited by Alexland; 11-03-2018 at 7:30 AM.
    • ChesterDog
    • By ChesterDog 11th Mar 18, 8:40 AM
    • 881 Posts
    • 1,642 Thanks
    ChesterDog
    Over what period of time?
    Originally posted by Thrugelmir
    I really only started investing post 2008, and then took a while to establish how I would go about it.

    So I'm not suggesting those figures maintain through thick and thin, simply that investing in funds does not mean you have to accept poor returns.

    Percentage returns for previous years (heading backwards from 2017)...

    20, 34, 9, 21, 22, 3, -3, 3

    I don't change things about very much (just peripheral stuff) and Trustnet is currently showing annualised returns of: 1 year 20.9, 3 years 20.9, 5 years 21.2.

    It's all equities (in OEICs and ITs). I hold quite a bit of cash, plus p2p, shared BTL and others to spread the risk.
    Last edited by ChesterDog; 11-03-2018 at 8:58 AM.
    I am one of the Dogs of the Index.
    • inflationbuster
    • By inflationbuster 11th Mar 18, 9:20 AM
    • 164 Posts
    • 45 Thanks
    inflationbuster
    I'm delighted that you are pleased with the performance of your equities, but that doesn't in any way substantiate your view that funds deliver paltry returns.
    Originally posted by ValiantSon
    Well l provided a link to the top 25 fund managers with their returns.... If you think they are great good luck to you.
    • Sam_J
    • By Sam_J 11th Mar 18, 9:32 AM
    • 24 Posts
    • 24 Thanks
    Sam_J
    My strategy is to purchase the equity or bond funds that have most outperformed the market for the last 6 months, hold them for 6 months, then switch out to whichever funds are most outperforming the market at that time point. I hold 6 funds in total and switch one at the start of each month. I limit myself to the funds that are available to hold in an ISA on the platform I use.

    I believe that this strategy significantly increases variance/risk over a buy and hold strategy but compensates for this by providing an increased long term return.
    Last edited by Sam_J; 11-03-2018 at 9:40 AM.
    • Alexland
    • By Alexland 11th Mar 18, 9:46 AM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    Feels a bit like turning up to the party when it's almost over and others have already started leaving for the next party.
    • ChesterDog
    • By ChesterDog 11th Mar 18, 9:47 AM
    • 881 Posts
    • 1,642 Thanks
    ChesterDog
    Would the previous two posters mind sharing their performance figures, please?
    I am one of the Dogs of the Index.
    • Alexland
    • By Alexland 11th Mar 18, 10:16 AM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    I don't claim to have achieved above market returns on my equity investments as most of our money is in fairly passive mixed asset funds. I have certainly reduced fees in recent years. Our active investments have done well but the extra gains are insignificant in terms of the total portfolio value.
    • ChesterDog
    • By ChesterDog 11th Mar 18, 10:39 AM
    • 881 Posts
    • 1,642 Thanks
    ChesterDog
    It wasn't you I meant, Alex.

    Our posts crossed.

    Genuinely interested to see results of the different strategies, even if short term.
    I am one of the Dogs of the Index.
    • economic
    • By economic 11th Mar 18, 10:41 AM
    • 2,940 Posts
    • 1,586 Thanks
    economic
    Here is my strategy:

    - Overall have 70% in stocks, 7% in P2P and rest cash.

    - In my stocks portion i have 3 portfolios: pension, ISA and trading accounts.

    - Pension: aim is long term growth as i wont be able to access for another 20-30 years so i have 50% in a managed growth fund, 25% in a US tracker and 25% in a global tracker.

    - ISA: aim is for growth and dividends so i have a mix of growth and dividend stocks. Bulk of portoflio is in index trackers but have single shares like BAC, JPM, BATS, VOD etc that pay good dividends.

    - Trading: to buy individual US shares and other single shares i like plus have some managed funds that i bought - usually because i have maxed out ISA so want to invest more but also because i can hold US shares settled in $ rather then with my broker and i prefer this as it saves me money in terms of fx conversion costs. I have fundsmith and lindsell train global and also amazon, msft, csco etc.

    Overall my portfolio is around 45% index funds, 30% managed funds and 25% single shares.

    I am also 70% in US shares - i like it this way. I hold long term and rarely trade.
    Last edited by economic; 11-03-2018 at 10:46 AM.
    • Prism
    • By Prism 11th Mar 18, 10:46 AM
    • 331 Posts
    • 253 Thanks
    Prism
    Well l provided a link to the top 25 fund managers with their returns.... If you think they are great good luck to you.
    Originally posted by inflationbuster
    Well they are the returns for UK fund managers of UK funds. If you added in fund managers from other sectors then the numbers would be a little different although the numbers don't get much bigger. Trustnet tells me that Nick Train (to pick one from your linked table) for example is the 4th best performing manager (of 1674) over the last 10 years.

    Its important to note that the 2008 crash is included in those 10 year figures. If we took Nick Train's 9 year annualized return it looks much better at 21.8%

    You are claiming that you are better than that and these are paltry returns. I find that a little doubtful.
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