My approach to investing

The first two times I invested in 2020 were a disaster.

I will spare the details for a future post, but the lesson from those two forays was that I needed a system.

The trouble is, when you start investing, you don't know enough about investing to have a system in place.

There are just so many different theories and ideas and strategies as to how to use your money. 

You can be a day trader, a buy and hold investor or a trend follower or a value investor or a growth investor. 

And then there are the different asset classes like currencies, property, bonds, shares or ETFs or index funds or cryptocurrencies.

It's all so confusing! Worse, it can be intimidating.

Having a system

In 2021, I read widely. The books that made the biggest impressions on me were:

Peter Lynch's book is a must read. Lynch gives a good system for classifying, analysing and investing in companies. Lynch is a growth investor who invests in individual companies. Lynch's approach of growth investing (as opposed to Buffett-style value investing) focuses on individual companies which have the potential to grow revenues and market share. 

This is where Wargent and Moriarty come in. They are value investors (the approach of finding companies that the investor believes that the market has under valued). Their book gives a holistic approach to investing including how to invest, when to invest, asset allocation and understanding your personality. Better still is that their podcast (which has the same name as the book) sets out how value investors should look at the world. Further, while they do invest in individual companies, Wargent and Moriarty focus on ETFs and indicies (which, for a beginner, is less risky) by looking for undervalued sectors and economies.

Finally, Bogle sets out some basic principles. Bogle was the founder of Vanguard whose approach to rookie investors can be summed up in the following sentence: get in as early as you can, buy and hold, diversify through index funds and ETFs and reduce unnecessary costs (such as taxes, management fees, share dealing costs) as much as you can.

My system

Every month, I want to invest money. 

My intention is to invest £500 per month into companies, ETFs or Index Funds. This will preferably be in relation to individual companies but it may be into sectors, countries or (albeit less likely) bonds or even commodities.

Where I invest in companies, I will follow Peter Lynch's system for analysing companies. Where I invest in sector and country ETFs, I will review them initially from the perspective of Wargent and Moriarty by looking at the CAPE (cyclically adjusted price to earnings) ratio and then assessing the economies and companies within the ETFs. I will also take a leaf out of the Bogle book to ensure that the ETFs that I hold are as cheap as possible.

In addition, I want to invest a further £500 per quarter into a FTSE 100 index fund. When I am in a position to save £1,000 per month again I plan to invest into the FTSE 100 more frequently and then slowly but surely increase my investment portfolio. This will follow the Bogle approach of simply buying the index for as cheaply as possible.

This means that by the end of 2022, I intend to have made 16 purchases, holding (at most) shares in 12 companies/ETFs/Funds and a further 4 purchases of shares in a FTSE 100 tracker fund.

I will "recheck the story" for each investment in my portfolio every six months.

In terms of the holding period, I aim to buy and hold the shares in the FTSE 100 tracker fund. I aim to hold the shares in individual companies for at least 3-5 years.

A good starting point

This is a good starting point for the first year.

The downside, is that I may be forced to invest when it is not necessarily appropriate to. Warren Buffett had a quote that investors should "wait for the fat pitch" and making a monthly investment may force me to buy for the sake of buying. That said my biggest problem so far has been in actually making investments. The approach that I have outlined will force me to make one investment per month and force me to analyse and give my reasons for making an investment.

Let's see how it goes!


  1. Your comprehensive approach to investing is both enlightening and inspiring, particularly in the context of Alternative Investments. It's refreshing to see a meticulous examination of long-term strategies that extend beyond traditional avenues. Your insights not only underscore the importance of aligning investments with personal values but also serve as a beacon for those navigating the complex landscape of Alternative Investment Advisors. By emphasizing thorough research and due diligence, you offer a blueprint for success in an often-overlooked realm of investment. Your dedication to diversification and risk management is particularly noteworthy, especially in the context of Alternative Investments where such strategies are paramount. Your blog serves as a guiding light, illuminating the path for investors seeking to venture into Alternative Investment Advisors' territory with confidence and clarity.


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