Page 46 - DIY Magazine September 2018

THE GREAT BRITISH TRADE OFF – Y2Q1 – HUMBUG FIGHTS BACK
I’m planning to achieve financial independence with plenty of noughts on by aggressively investing in funds; The Great British Trade Off competition is one part of that endeavour; most enjoyable, but I’m being soundly beaten by Fagin.
I lost £7,500 in the first year, but Y2Q1 has gone well for me despite the sharp correction at the end of June when I had the worst week I’ve ever had; I lost 33p a minute for every minute of every day (and night) for the entire week.
MY METHODOLOGY: I am useless at fundamental analysis; I’ve spent a small fortune with the excellent Robbie Burns, bought and read many books, studied what Warren Buffet does and doesn’t do, but try as I may I don’t get it.
I’m not a forensic accountant so have to take company accounts at close to face value; sure I know what the different metrics mean but I cannot seem to pick ‘the wheat from the chaff’.
Also I struggle to interpret the statements and the RNS; any bloody fool knows what ‘ahead of expectations’ means, the question I got wrong all too often was, was it already in the price? Don’t even get me started about profits warnings two weeks after a positive annual report.
So, it was logical for me to invest in funds, where I effectively contract out stock selection to the fund manager; costs and charges are a little opaque, but there’s a price to pay for everything in life.
Funds allow me to buy into any sector in any part of
the world with a product that is traded in London; the brilliant Sharescope means I can easily find which funds are currently out performing their sector.
Apart from simple tracker funds almost all other funds have a fairly narrow remit over what they do and don’t invest in, so will always have periods of underperformance, average performance and the outperformance I look for.
If you are looking to outperform the market there’s not much point putting your money into an index tracker is there? I set Sharescope up to hunt for situations where a fund is setting up to be ahead of the curve and always have my money where the action is.
FACTS AND FIGURES: I started the second year of Great British Trade Off with £92,500 and at the end of the first quarter had a running profit of £3720 or 4%; 4% a quarter compounded up is almost 18% a year.
But stock market profits are a bit like chickens, best you don’t count them till they hatch, because until they do.........they’re eggs not chickens. So yeah, a really good start to the year, but better to make the money before I bank it.
My best performing fund has been the Ballie Gifford American Fund
• Banks such as Northern Rock, IKB, Bear Stearns had already failed
DIY Investor Magazine | Sep 2018 46