My Investment Process is really simple.
My local banks in the UK currently give interest on accounts at around 1% – which is in reality a negative investment when you consider that price inflation is currently around 2.3% … so saving in a bank account and losing 1.3% a year doesn’t appear to be any sort of option
I have had my fingers burnt in the past when investing in individual shares. It was great fun, but the lessons I learnt were all about not have my eggs all in one basket, and also that information is key – and companies can be rather economical with the truth about their true financial position….. Individual investors are always the last to know when things start going wrong.
I’m still a big believer in the stock market – as it gives a financial return far in excess of anything that you can get from a high street account and I have no fear of markets. I just allow a professional investment manager do his stuff, spread investments around and prepare to ride out the bad times and enjoy the good ones.
I am currently investing my £400 a month in my stocks and shares ISA in two companies.
Black Rock Smaller Companies investment Trust – London Ticker BRSC.L
and Polar Capital Technology Investment Trust – London Ticker PCT.L
The UK FTSE 100 index gives an average growth rate of 8.07% with dividends re-invested over the previous 10yrs
Compare that return with this screen grab of an Investment Trust rank tool from my AJ Bell You Invest account
Click on the image to enlarge – As you can see – the average growth rates over 5 and 10 year periods are far in excess of those from bank savings accounts and even the FTSE 100 average
I decided to pick Black Rock Smaller Companies – on the very basic premise that smaller companies tend to grow faster than large ones. So I invest £400 every other month into BRSC.L which has a 5 Yr av growth rate of 20.03%, and a 10 yr av growth rate of 19.37%
The other investment I make for myself on a bi-monthly basis is the Polar Capital Technology Investment Trust – PCT.L This investment trust gives a 5year av growth rate of 23.59% and a 10yr av growth rate of 21.80%
I’ve only £1200 invested so far, so lets see how they roll over the next few years, and if these fantastic growth rates are maintained