Still not a bad result though.
Agreed - I only wish I could find another manager of a UK based company portfolio with a similar performance. I'm currently (possibly too) heavily reliant on Finsbury/Lindsell Train UK in this sector.
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Still not a bad result though.
ReallyVeryFoolish wrote:Dod, perhaps I am being more dim than usual. But if top slicing a growth stock isn't selling, what is it? It seems to me you are indeed selling growth stock to reinvest in income stock. I can't understand why you say you aren't selling growth stock to generate an income. It seems exactly what you are doing. Albeit not living off growth stock cash sale proceeds, but using an income stock as a device to then yield that cash. That has turned out to be a very bad strategy indeed for me.
ReallyVeryFoolish wrote:if top slicing a growth stock isn't selling, what is it?
Aminatidi wrote:but this would be a small sum and almost a bit of a "play" allocation.
tikunetih wrote:Aminatidi wrote:but this would be a small sum and almost a bit of a "play" allocation.
IMO not a good idea to allocate money to investments with such apparent weak conviction...
1. We know for certain that volatility will occur. For positions that are not held with utmost conviction, periodic volatility and market stress will in all probability simply act as triggers to invite meddling - satisfying the investor's desire to "just do something" - causing deviation from the long term plan and very likely negatively impacting long term returns. Essentially some variation of buy higher, sell lower.
Far better to hold investment positions in which you have conviction, thus making it psychologically easier to "hold fast" during the stressful times.
For many investors, much of the path to decent long term returns comes from simply avoiding doing the damaging stuff vs. a focus on knocking it out of the park.
2. I'll return to an analogy I used a few weeks ago on another thread: imagine if you were invested in a fund and received a monthly factsheet where the manager disclosed that they had "almost a bit of a "play" allocation" to some positions in the portfolio. How impressed would you be with that and the lack of seriousness that such a turn of phrase signals? Not very!
So, conduct yourself with your investment decisions as you would expect a professional investment manager to behave if they were managing your entire portfolio for you. Thoughtful, serious business only. No f@#!&5$ around. Don't lower your expectations and standards just because it's you in the hot-seat instead of some professional you've outsourced it to.
Aminatidi wrote: I know several people who do something similar i.e. main portfolio which is deliberated and held long term and a small allocation or even a separate account sometimes to have some fun with to satisfy the "bit of a gamble" instinct some of us have (though I don't consider investments a gamble in same way I would the bookies).
Dod101 wrote:It is your money and the benefit of running it yourself is that you can do exactly what you like with it. If you want to use some as a ' bit of fun' money, why not? Obviously if you are paying someone else good money to look after your funds that is different.
If someone was to prioritise indulging a gambling whim, or to minimise their own feelings of discomfort during periods of market stress, then that is entirely within their gift to do so. However, they should be clear that doing so will almost certainly impair their returns, and significantly so over time, unless they possess very unusual levels of skill/luck.
An informed PI would therefore make their choice with eyes wide open:
(a) pursue better returns by operating in as thoughtful, professional and disciplined manner as they can achieve; or:
(b) operate in a more indulgent manner, taking fun gambles from time to time, acting on their gut feel and doing what feels psychologically easier.
I'm simply telling people their future self will thank them for choosing (a), even if in the shorter term that path is a more difficult one to stay on, but it's not my decision.
Itsallaguess wrote:If by taking this approach, the bulk of 'optimum Green Room returns' can carry on ticking away and 'doing their thing', and the process which allows for the long-term 'distraction' necessary for that to happen is some relatively low-level Red Room excitement, then doesn't that just fall into the important 'know thyself' aspect of personal investment?
Of course, it's 'self-diversion', but it's actually being done with clarity and purpose, and is based distinctly on an investor knowing themselves well enough to allow themselves to do it - for 'the greater (Green Room) good'...
TUK020 wrote:Although the majority of my portfolio is focused on income (I am probably 6-12 months from retirement), I have devoted a chunk (around 10%) to a group of growth oriented ITs. The purpose of this section of the portfolio is to shore up the long term capital value of the portfolio, and if need be, be traded in for income ITs later.
This includes Scottish Mortgage (SMT), Monks (MNKS), Foreign & Commonwealth (FCIT), Alliance (ATST), Witan (WTAN), Caledonia (CLDN) and RIT Capital Partners(RCP).
The bulk of these have much less flashy recent returns than the likes of SMT & MNKS, but with an eye to a longer horizon, I have been looking for ITs with proven durability over decades.
Over on the IT board, there was previous discussion about the benefits of family trusts which has led to the inclusion of Caledonia & RIT.
This link for the IT Investor (found via Monevator) has proved very useful:
https://www.itinvestor.co.uk/2020/06/20 ... -compared/
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