[AMA] I Invest for a Living
Last edited 29/11/2018 - 19:55 by 1 other user
I primarily invest in shares for a living. I have been investing for over 30 years. I am self taught and have minimal formal training in investment management. I used to rely on a full service broker until I realised most of the recommendations were conflicted with the brokers other commitments. Whilst the results were just OK I realised that I was taking too much risk for the reward.
I prefer shares to other investments because the transaction action costs are minimal and the liquidity is very good.
- I have invested in real estate previously and did OK but only because of the leverage with debt. There was a lot of work (tenants, R&M, agents, irregular cashflow) etc) which I was not keen on and the leverage was a concern because it works both ways Over the last 5 years
- I have also looked at bonds and hybrids but nah, the returns are lower and the risk is only slightly better.
- I have used LICs/LITs/ETFs previously the but returns are equal to or just below AVERAGE (Caps intended). Having said this I have recommended this type of investment to relatives and friends who are not interested or are time poor.
I spend about 20 hours per week on reading and research. I never buy a stock unless I have spent at least 1 hour researching the business (and I use a wide range of paid for services that save me lots of time). I usually invest in stocks with forceable growth, predictable income and low debt. However I will occasionally allocate up to 10% of my portfolio into 2 or 3 riskier stocks with good medium and long term momentum.
I am sure these comments will come up so I will pre-empt the reply.
- There is no investment that is not without risk to capital except for deposits in Australian banks that enjoy a Government guarantee up to $250K.
- You can lose lots of money (leaving it on the table) by not investing)
- When investing the risk of capital loss is best ameliorated by diversifying investments. I use 25 stocks with 50% exposed to Australia and 50% international.
- Never ever invest in businesses that you do not understand how they make their income.
- The only IPOs a broker will offer you are the ones not to invest in. The good deals are reserved for their best clients who pay them thousands in fees.