True investors can go for long periods of time against the supposed wisdom of the masses and be able to cope with the psychologically corrosive delay before benefiting from their sound analysis. They have to show perseverance, sometimes waiting years before other investors realized their mistake and appreciated the virtues of a good solid company with steady rising earnings.
A portfolio of good companies
We should not rely on a few shares doing dramatically well. To go home winners, investors need to be consistent and not to rely too heavily on any individual share.
Tennis and the investor
The requirements of consistency, persistence and patience can be explained using a tennis analogy:
Some players are extremely talented and are able to adopt a playing style to win a match. They have brilliant stroke play or a winning serve, say. Most players are not like that. The rest of us should concentrate on our strengths, to win by not losing; to keep the ball in play as long as possible allowing time for our opponent (Mr Market) to make a mistake.
Knowledge of the past
Investors develop a sense of the history of stock market be
I'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk
investing is about making the right decisions, not many decisions.