DIY Investor Magazine
| Oct 2017
34
Oddly, I’d probably say this was also one of my best in-
vestments in terms of education. I learnt two main things
from this.
Firstly, a company in a steady price decline is unlikely
to improve in the short to medium term. Secondly, it’s
not necessary to make your money back on the same
investment.
Sell up, and put that money to better use. You have to
think about the opportunity cost of waiting for a busi-
ness to recover.
WHAT ADVICE WOULD YOU GIVE TO ANYONE
CONSIDERING SELF-DIRECTED INVESTING FOR
THE FIRST TIME?
I can only speak in terms of my limited experience, but
the first thing I would say is to expect to make mistakes
and lose money in the beginning. Far better to do this
when you have less money available to lose. Common
investing mistakes are well publicised, but some you just
have to live through to come out the other side.
I currently invest purely in equities and ETF’s, so can’t
speak on the subject of funds. I would suggest that if
YOU HAVE TO THINK ABOUT THE OPPORTUNITY COST
OF WAITING FOR A BUSINESS TO RECOVER
you have the time and the interest, investing in individ-
ual stocks can be very rewarding both financially and
intellectually.
Obviously the returns are nice, but more than anything
I have enjoyed the academic challenge of individual
stock selection.
If this isn’t for you, I’d stick to putting your money into
funds. Just watch those fees, as they can eat up returns.
For someone interested in building their own portfolio, I
think it’s essential to work out what type of investor you
are and what type of investments you are drawn to and
understand.
Never invest in anything you don’t understand, and
never buy something just because someone else
recommended it. Read a lot, educate yourself and give
yourself the time to begin to develop a framework.
Understand that this is not a ‘get rich quick’ kind of
thing. I wrote on Twitter recently that ‘you can get rich
slowly or get poor quickly’. If you go in with the mind-
set that you need to make loads of money quickly, you’ll
likely do the exact opposite.
Above all, never stop learning.
