This post started as an introduction to the portfolios I’m planning to track on this blog from now until some far away point in the future thereby demonstrating my stock picking credentials 😉 But it seemed like a good idea to reflect on how I arrived at this point in my investing career.
I’ve been interested in the stock market and investing my own money since 2012. I enjoy the challenge of beating the market and the mental work required to assess potential investments. The macro environment is fascinating (and terrifying). The underlying aim has always been to build wealth to give myself greater freedom, security and to improve my life and also those around me.
Since beginning down this road in my late twenties, investing any disposable income I had, I’ve learn’t a great deal. It’s (hopefully) true that making mistakes earlier is cheaper than making mistakes later in your investment career when you might be managing larger amounts of money. I’ll know for sure in another 25 years whether i’ve had a cheap or expensive education!
Perhaps in another blog post I’ll talk about some of the painful lessons I’ve learnt along the journey:
- How anchoring your investment thesis to an idea or belief about the market/company can trip you up when that anchor magically dissolves.
- How you can be right (about a company) but still lose money.
- You can be wrong, lucky and over confident.
- How portfolio management is more important than individual stock selection.
- The market can be irrational. Combine this with shorting and you can potentially expose yourself to a lot of risk.
- Assuming others know more than I do. Assuming others know less than I do.
I am intelligent, numerate and curious but we all know these things don’t guarantee investing success. Human emotions and behaviour play an outsized role and luck plays her part. I’ve gained a large amount of knowledge since 2012 reading and exploring investing alongside my full time job. I’ve read in the evenings and weekends. Books, blog posts, videos, company results…. the occasional annual company report 🙂 I’ve googled a thousand questions from economic history to technical analysis terminology. I feel I have a solid grounding in the investing landscape and have sufficient experience to make me competent. I realise i haven’t been through a real bear market yet for all stocks but i have been invested in gold and oil through their prolonged bear markets. The reason I outline all this is because I am now at a point where i want to take a small step back from what has consumed a large part of my spare mental capacity and time since starting…..
I began it all began to help improve my lot in life. However, I have become more aware over the past few years that my time and mental energy are finite. I do not want to continue to spend these precious things essentially thinking about how to make money and increase wealth. These are worthy goals but I feel I have let them crowd out other arenas which are also important to which I’d like to give more time and energy.
- Are you distracted checking twitter or live prices on your phone when you could be engaged with your partner?
- Reading stock market RNS’s when you could be attending fully to your children?
- Nighttime wandering mind on recent market events when you should be winding down and relaxing?
- Maybe you don’t find time for music nowadays due to those finance podcasts?
- Never ending analysis, rational thought, mental arithmetic…. do you get time to just ‘feel’?
It’s not divorced from the addiction attraction us humans have with social media/electonic devices where we spend countless hours for no obvious benefit. In fact it is probably making us less happy.
So i’m taking a step back, but only a medium sized step…. I’m organising and diarising my investing activities into quarterly and annual reviews. I will spend my energy on investing during these diarised periods and reduce time spent on the markets otherwise. At the very least, my daily or weekly interest will be more casual and i will not be making portfolio changes or re-thinking strategy. It will be tricky as i enjoy the constant newsflow and excitement of the markets.
To support this aim I will be moving towards a Stockopedia Stock Ranks style portfolio with annual rebalancing. I believe this will not only save me time but also improve my returns. I intend to publish my annual returns along with my annual selections and picks on my blog. I also want to have some fun with a couple of ‘model portfolios’ which i’ll reveal and track on a future post.