RE: nims7 Jan 2017 00:09
Hi Daniel that's a good question. You are right I don't have a crystal ball, however I am very cautious when I go in with a large investment e.g. Vod I got in at around £1.89 with a £12.5k investment broker fee and stamp duty was around £72 and when I sell another £12.50 + £1 levy which was a total cost of £85.50 ish not looked at the exact figures. I sold at £2.087 I think that was the executed price but not checked account today which worked out o be about £1.3k profit. I did similar with gfs and BT.a over the last few weeks.
The thing is I do get it wrong but buy stocks where if there is a drop then the divis can return something and ensure companies are strong, e.g I have invested I Sbry and I am still down, although hopefully I will recover losses, I have been in that stock for a few months now. My method isn't perfect and if there was massive news to shock the markets then trust me we all will be down.
In terms of going out quick, I could've waited for £2.20 or £2.50 in VOD and would have made a healthy return however I do get nervous quick and like to bank a quick profit and hold cash for other opportunities, I.e just waiting for 3rd week of Jan to be over and buy some good stocks on the drop. I luckily have lost enough over time to now take a more calm approach before buying a stock, reading company statements including the CEO perspective and drill down on the cash flow statements as they can tell you a lot on how a company is managing its money.
Many unfortunately do not take that much time before investing, and I would say 90% go on gut, I am now one of the 10% that goes on value, so for me 3% to 10% return per trade is fine, if the return I made so far is the only profit with no loss then I'll be happy in 2017. The other thing is it does not matter if you traded 1yr, 10yr or 30yr what's important is to find a strategy that works for you. For me I now a days only go long, I don't short and do not like that side of investing, I also do not like trying to build a long term fund, for me it's quick short profit, which helps keep me real and massage any egos I may have. The stessful part for me now adays is finding quality time to research, as I prefer spending time with family and like posting on this board as you can learn a lot from other posters to improve strategy.
However I love calculating Graham numbers for ftse 100 and comparing the numbers, there are still some companies in ftse 100 that are undervalued, and if you do the due diligence then a crystal ball will. It be required.