Thursday, April 10, 2014

I've long taken the view that if anyone's going to make mistakes with my money, I'll be the one to do it - and I'll pay myself the management fees while I'm at it. And you should be prepared to make mistakes - everybody does. Successful investors just make fewer and hopefully smaller ones.  Yes, you can go it alone in an SS ISA. You should read up on things first though - make it a hobby, an interest. Do some research on different strategies, diversification and assessment of your goals and risk tolerance. Temperament is extremely important. Ask yourself the following question:  "If a stock or the whole portfolio drops by 10% in a single week will I be able to sleep?" Because at some point it will happen.  A popular approach is income investing, which focuses on finding solid companies that have a record for paying and increasing dividends. You then keep reinvesting the income and it all just carries on compounding up. Motley Fool UK has some good starting guides. There's a chap over there that runs an instructional Beginner's Portfolio very much along those lines.  ETFs are useful too - you can do perfectly well by choosing about 6 dirt-cheap trackers and pound cost averaging into them over time. The great Warren Buffet himself recently advised his future widow to use just trackers and treasury bonds.  You need an "investment thesis", whatever you do. "Buy and hold (preferably forever)" is a very useful principle, but obviously if they suddenly uninvent the semiconductor you might want to rethink your position in Apple...The late Fred Schwed's book comes to mind, 'Where are all the customers' yachts?' 
Schwed invited investors to ponder on why the expensive gleaming craft moored in Manhattan harbor belonged to stockbrokers and bankers. 
Can I put my own stock selection in an ISA or do I have to buy funds with opaque fee structures and rely on some guy in a striped suit who will never lose money to invest for me? How do you do it and who do you go to for advice? It seems to me that those who could advise are looking to line their pockets to their advantage and not get the best deal for you.

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