Thursday, 14 July 2011

Growing My Own's Investment Strategy

When people ask "What should I invest in?", it's akin to asking "How long is a piece of string?"

It depends on a multitude of things including age, disposable income, lifestyle, time scale, attitude to risk, knowledge, confidence. The list goes on.

With this in mind, I can only talk about myself. So lets consider me:

My age: between 27 and 39, depending on what day it is and who is asking.

Disposable income: more than enough to buy into a few investment funds every month, not enough to buy a meaningful amount of individual shares

Lifestyle: it doesn't bother me if I don't have a lot of the latest bling.

Time scale: indefinite (ie I'm not saving for anything in particular)

Attitude to risk: volatility in  my portolion doesn't make me quake, however that's because I'm confident in the underlying holdings of my portfolio and in it for the longterm. (I won't need the money to pay my bills)

Knowledge and confidence: high for equities and investment funds, medium for bonds, low for other investment vehicles.

All these things are important but I know that during term time from 08:00 - 17:00 (approx), I belong to school. I'm not free to check my portfolio, read articles, do calculations etc.

With this in mind, I have chosen to invest the majority of my portfolio invested in unit trusts, OEICs and investment trusts with a smaller holding in individual shares. I also belong to an investment club, where we hold only shares.

The way I see it is because I am tied up during market hours, I largely choose to back the jockey and the racecourse rather than the race horse. You can click the link to see my thoughts on whether to back the jockey, the horse or the course.

Although I do have individual share holdings and would eventually like more, I choose to keep my holdings in indiviual shares as a relatively small part of my portfolio for now because I have thought long and hard about my constraints.

I feel comfortable with what I do, I enjoy it and I sleep well at night. All I can say is it is right for me.