This weekend marks the third year of my ‘proper’ investing journey (i.e. investing with a decent amount of money). Whilst I have been investing for longer than that, it was with far smaller sums, and fortunately I made most of my mistakes during this time. So today I wanted to share a few things I’ve learned that may help others going forward.
I finished re-reading Ben Graham’s ‘The Intelligent Investor’ earlier this week. There’s little needs saying about this book, as any investor worth his salt has read it. Amongst the many, many important concepts and ideas Graham illustrated, one stood out to me that I hadn’t considered before.
One of my favourite investing aphorisms is the following:
“Don’t just do something, stand there!”
The line has been attributed to any number of people (Eisenhower and Clint Eastwood amongst others), but has since been appropriated by the investing world. Well, this year so far has been a true test of my ability to resist doing something in my portfolio.
I had a brief chat with @wheeliedealer the other day on Twitter. I was responding to a post of his, in which he shared a chart of one of my holdings, Advanced Medical Solutions (LSE: AMS):
— WheelieDealer (@wheeliedealer) April 12, 2018
So it’s finally happened.
Let me phrase that.
So something has finally happened.
Since beginning my portfolio in August of 2015, returns have been largely stable and definitely favourable. I always bang on about letting your portfolio do its thing and not checking it every five minutes, which to be honest has been easy for me so far. A nice, relatively linear upward line in my portfolio value since it began has certainly helped me sleep at night.
2018 has started a little differently.
As we settle into 2018, I’ve been giving some consideration to valuation. Specifically, what we can expect for the year ahead. Having now had the opportunity to review the returns obtained by fellow investors it seems clear 2017 was a very good year indeed. My 42.72% return, as outlined here, was, for me, exceptional and unlikely to be matched this year.
But with such a large run-up last year, are equities expensive? Are we, dare I say it, approaching a bubble?