Photo by: Steven Depolo
Is it really necessary to pay a fund manager 1.5% a year to buy you shares in GlaxoSmithKline? How hard can it be to recognise that GSK is a decent company with reasonable prospects over the long term and then to buy it at a time that it is not grossly over priced?
Surely it should be possible to generate returns that beat inflation, whilst avoiding stomach-churning volatility, by managing your own portfolio with a mixture of common sense and some tried and trusted ideas?
I am not an investment expert, nevermind a professional, but I hope to learn more about the process as I go along and also to enjoy the experience. I have been investing regularly into ISAs for 7 or 8 years now and hope to continue doing this so that my ISA will eventually become a decent contributor to my retirement. That day when I can gently tap my employer on the shoulder and inform him that his services are no longer required is my target!
There is a universe of old, successful companies out there which pay steady, predictable and growing dividends year after year. My goal is to identify these companies and, when they are selling at decent prices, add them to my portfolio to be held, hopefully, forever. If, in the future, bonds look to have the potential to beat inflation, then I will gladly diversify by adding a sensible percentage of these too. In combination, hopefully, this will produce a stable and growing income stream that will be sufficiently reliable to fund a few years of contented pottering.
I will try to use this blog to share my progress and hopefully learn more about how to manage a portfolio as I go along the ever-changing road of hills, potholes, and improvised explosive devices that is investment management.