The panic seems to be subsiding, well at least momentarily, after last week, though share prices still seem to be quite volatile. I’m surprised at how sensitive my outlook is to share price volatility, despite my better judgment. Last week felt like it could be the beginning of the end, even though the rational part of me reasoned that there wasn’t much to worry about. A small bounce and I’m already looking forward to a monster Santa Rally. Those emotions are tricksy little blighters. Continue reading
I’m writing this portfolio review off the back of a pretty horrendous week for my portfolio. The markets have been weak all round and I’m sure many investors will have suffered losses, but with my focus on high quality growth stocks I’ve been hit particularly hard. It’s the worse week I’ve had in quite a few years. At times like these I think it’s important to accept your losses rather than regret them and to look forward to the opportunities and risks ahead. This review gives me the opportunity to take a step back from the carnage and focus on ensuring my portfolio and strategy are well-equipped for what might be coming next. Continue reading
I was going to start this post with a brief commentary about the general state of the market. This is how I have tended to introduce my posts updating on portfolio trades. Reading back through them, it now seems quite amusing how often my degree of optimism changes week to week. While it is quite interesting to have a record of this emotional rollercoaster, I’m going to stop doing these commentaries. I’m trying to become more relaxed about short term price movements and this feels like one thing I can change (along with checking my portfolio too frequently). Preoccupation with the ups and downs of the market doesn’t help my performance. Unless I have good reason to believe a crash is coming, it’s not worth worrying. It may even be counterproductive. Continue reading
My mechanical portfolio experiment has got me thinking more about the dimension of time. Investing is basically a race, more of a marathon than a sprint, but a race nonetheless. Like all races, minimising the time taken to get from A to B is the thing that matters the most. If you didn’t care how long it took to generate returns, you would keep your money in a low risk savings account. We all understand this, but we often don’t pay so much attention to the time dimension in practice. Thinking about the time dimension more explicitly can help you to deal with a notoriously difficult part of investing strategy – how frequently and in what circumstances should you sell?
My portfolio is treading water at the moment. I’m still optimistic about the remainder of the year, which tends to be the strongest season for the stock market. As I mentioned in my last post, I’m going to move to trading at most only once every two weeks so that I don’t end up relying on stop losses too much, or overtrade. I started with one trade this week under this new system. In addition to that, I have to update on a trade made last week. Continue reading
I questioned whether I should be running a more mechanical system back in January. At the time I decided I wasn’t quite ready to hand over the controls to my portfolio just yet, but would set up a mechanical benchmark portfolio to track my performance against. It’s too early to reach any conclusions but the early signs for the mechanical portfolio are good – it’s been on quite a tear this year so far. Continue reading
Deciding how concentrated my portfolio should be is a question I’ve mulled over many times. I wrote about it in a previous post more than a year ago, where I decided that I would benefit from being more concentrated. Unfortunately, I think my reasoning then, while on the right lines, was a little half-baked. As a result, I still feel torn by the conflicting desires to either diversify into more of the attractive-looking opportunities on my watchlist, or to only concentrate on my very best ones. To build a more coherent approach I can confidently stick to, I think I need to go back to first principles. Continue reading