Sunday 4 November 2012

My investment history

I'd describe my investment performance over the past 5 years as mixed.

First, the good bits:
Purchasing a property at the bottom of the market in 2009 was comfortably the best financial decision i have made. This has generated good capital gains (as yet unrealised), along with consistently high rental returns after i moved out.

And now the bad bits:
My investments in equities have tended to be impulsive, lacking strategy or sufficient analysis. A couple of ill timed investments before 2008 disappeared to almost nothing.   The investments i made near the lows in 2008 were sold far too early (for example buying a FTSE100 tracker close to 3800 and selling at 4200!). I've also had a tendency to over-commit to positions, rather than building positions & reaping the benefits of averaging should markets decline.  I had a bad experience of placing too much cash in an Indian equities tracking ETF, which subsequently declined rapidly in value. Instead of buying more at a cheaper price, i realised i needed some of the cash and ended up selling the position at a material loss, only to see the value go back up a few months after.

I think the biggest problem i've had to date has been my investment time horizon, thinking of equity investments more as a day trade, or a potential quick profit.  I plan going forward to purchase and accumulate, only selling if my opinion on the fundamentals of the investment changes significantly.


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