Strategy versus inflation based luck

[scooterscot]

I invested heavily last week.



Boomed!

Looks like you're hedging your bets...

[Fronttoback]

The best returns are on the stock market, difficult though.

I first invested in the late 1990's, first thing that happened was I lost half my investment, but kept it, and by mid 2000's I had very healthy profit. Rough calculations showed I made about 8% on average, so I shoved whole lot more on in the mid 2000's, the 2008 crash came along and my portfolio halved. Having experienced this before I increased my investment in 2008, because I invested more I was back in profit by 2009. Since then I've made selected investments and more recently a sizeable wadge into various companies during the 2015 stock market wobble.

My calculations are divis plus capital appreciation give me 8% over the long term. In my portfolio around 7 or 8 stocks have become effectively worthless. Always invest in different stocks. On average you make 8% so when you buy a stock, buy others so that when one goes bad the others will compensate.

If the stock market crashes like it did in 2001 or 2008 then wade in big time.

Currently stock markets are fairly or possible overvalued, I think you can invest but not too much and I would be holding money back for the next wobble or crash. It's coming as it always does

Thanks for the long post. It's well known stocks pay 8% yield long term. So you might as well buy the index and save a lot of admin.

Where are the excess returns now? The airbnb trade is still on isn't it? Long wine trading into the new Russian expats on the med? Arbitrage on car purchase prices across UK and ex-colony European countries (via leasing to avoid import duty)? Go long the importers?

[BlasterBates]

Thanks for the long post. It's well known stocks pay 8% yield long term. So you might as well buy the index and save a lot of admin.

Where are the excess returns now? The airbnb trade is still on isn't it? Long wine trading into the new Russian expats on the med? Arbitrage on car purchase prices across UK and ex-colony European countries (via leasing to avoid import duty)? Go long the importers?

Yes you can buy the Index but actually that involves more admin as you would have to buy 100 stocks if you do it yourself. To do it properly you also have to calculate the weighting and you have to buy and sell stocks as the FTSE changes so incurring more transactional costs. If you buy an index based fund you lose 2% a year so you only make 6%.