Ask Money: Should I copy Share Sleuth’s successful portfolio?
Companies analyst and columnist Richard Beddard helps an admirer of his Share Sleuth portfolio.
3rd December 2019 10:35
Companies analyst and columnist Richard Beddard helps an admirer of his Share Sleuth portfolio.
I'm impressed with Richard Beddard's work and looking to invest in the Share Sleuth portfolio for the next 10 years. I would be very grateful if he could give me his view of the best way to get started. For example, should I simply buy all 25 shares in one go, or buy two shares a month over the next 12 months, and is timing an issue?Name and email supplied.
Richard Beddard, Money Observer's Share Sleuth, says: This is probably the trickiest question I'm asked, for two reasons. First, financial advice is regulated in the UK and I am not authorised to give it. Second is that although the share component of my own portfolio closely resembles the Share Sleuth portfolio, I personally would not copy a model portfolio such as Share Sleuth unless I had created it.
Let me explain (my apologies if I am teaching you to suck eggs): to succeed at long-term investing, I believe that you have to really believe in the shares you own, which means doing some of the legwork. My aim in writing about the Share Sleuth portfolio is to show people how I do it, and give them ideas. I think all the companies I write about are worthy of people's attention but readers must form their own conclusions, perhaps by trying to find fault with my conclusions.
There is another more prosaic reason for not copying another person’s portfolio without verifying it: although I believe that I have many years of investing and writing ahead of me and I am generally committed to writing for organisations that make my work widely available, circumstances can change unexpectedly and you may not always enjoy the access that you currently have.
Finally, the portfolio is constantly evolving and by buying the shares in the current portfolio you may be, for example, buying shares that I am actively considering selling. To show people how I currently rate the shares in Share Sleuth (and also some other shares I follow), I rank them. You can see the top five every month in Money Observer magazine's Share Watch column, and the full list once every five weeks on Interactive Investor (the rankings are usually in articles that refer to “shares for the future” in the headline). For someone starting a portfolio and wishing to investigate the shares that I am following, that is probably a better list to start with.
Regarding buying investments all at once or phasing money in, we'll only really know the best outcome in hindsight, as it depends what happens to share prices of the individual shares after you buy them. I am a phaser not because I think that will necessary give me a better return or reduce risk (although that may well be the case - look up pound or dollar cost averaging), but because I like to take things gradually, giving myself time to get to know each investment before the next decision. Indeed, you will probably be aware that I limit myself to a maximum of one trade per month in the Share Sleuth portfolio.
I hope you find this response helpful. While I cannot give financial advice (i.e. tell you what you should do), I do enjoy corresponding with investors who share an interest in buy and hold investing and the kind of company I follow, whether they are taking their first steps or are seasoned investors.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
Disclosure
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This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
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