Little By Little

Thursday, 13th May 2021 14:31 - by Moosh

I am a big fan of building a holding in multiple small sized tranches. This method means I don’t have to be petty about getting a specific price and I am insensitive to paying multiple commissions as it keeps my broker in business.

For those who are curious about this method but resistant because of a belief that it’s a waste of time compared to the high adrenaline standard lump sum large buys, then the following may be of use to you.

Investors/traders usually employ a gambling style of investing using stop losses, which is the basic method the industry spins to new investors with a ‘capital preservation’ reason...wake up people, it’s just a ploy for brokers to get extra commission from you for getting it wrong. If you’re going to pay ‘extra’ commissions to your broker, do it with you in control via regular investing rather than using stop losses.

But back to the point of this post, which is a few examples of multiple or small tranche investments. Specific companies and prices are irrelevant, just see that reasonable % gains (shown here after commissions) are repeatable.

1. £148.88 >>> £33 profit, 22%
2. £210.36 + £168.73 = £379.09 >>> £53 profit, 14%
3. £259.34 + £154 = £413.34 >>> £46 profit, 11%
4. £52.99 + £121.49 = £174.48 >>> £26 profit, 15%
5. £325.49 >>> £32 profit, 9.8%

This is just a handful of recent wins but these are the sizes of tranches I generally buy, with most aiming to be between £50 and £150 per tranche. In some companies I buy and hold, others I build profit shares, while occasionally there will be trades in parallel to long-term holds. The key is flexibility.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.