This blog is primarily to introduce accountability into my investment process (insofar as I have an ‘investment process’).
Too often have I bought shares hastily, on a whim or a tip, fearful that I was about to miss out on a sizeable gain, only to see the investment languish or, worse, plummet.
In some cases it has taken only a few moments of post-trade research [shakes head sadly at the concept] to discover the business frailty that was causing the market to value the shares so cheaply.
The purpose of this blog is to:
- force me to conduct and publish my research and investment rationale before any buy or sell decision;
- store my investment records, allowing me to compare the prevailing case for buying, selling or holding each share against historical decisions;
- help me to discover, refine and document my investment strategy and the processes that I follow to select shares (or other investments) for the portfolio; and
- allow me, after a certain period of time (to be determined), to compare my ‘stock-picking’ performance against the returns that I would have achieved simply by investing the same amount of money in index-tracking funds or ETFs.
The reason that this is all taking place publicly on a blog (albeit one that is not likely to attract a huge number of readers) is that if I were to attempt to undertake this exercise in private, it would be all too easy to lose interest and focus.
I believe that investing in shares is the best (and safest*) way for individuals to increase their wealth over the long term. To do so requires focus, effort and the courage to stay the course. The aim of this blog is to assist with all three of these.
Otherwise I’ll be going back to investing solely in index-trackers.
*over the long-term (i.e. 10 years+) and when conducted in a steady, rational manner.
Photo credit: FreeImages.co.uk