I’m no investing genius. But I don’t think I have to be to make good money investing in shares.
In the last 6 months, or so, I have achieved an increase of 56% in the value of my basket of shares in my Davy Select account. Let me tell you how I did it.
In the fourth quarter of 2020 I had a hunch that UK share prices were seriously under-priced for two critical reasons:
- The uncertainty surrounding the Brexit negotiations between the UK government and the EU and the spectre of the UK economy going over a ‘financial cliff’
- The Covid 19 pandemic was having significant, and worrying, impact on the economies of the world as a consequence of the forced closed downs needed to curb its spread
I saw these two spectres overhanging the UK stock market and economy as creating a depressing, downward pressure on share prices.
And I did a little basic research. I bought a couple of editions of the Financial Times and Investor’s Chronicle, and my hunch was broadly confirmed be many of the stock market commentators.
I figured, too, that the UK economy has a long history of trade and commerce, a well-established, mature political and financial environment, and a well developed financial sector.
And London is recognised as one of the leading cities in the world with a magnetic allure for people from all over the world due to its colonial history, its monarchy, the rule of law, the legal system, parliament, and so forth.
So I decided I would take a well informed (I believed) punt in the UK economy and bet that it would recover quickly once the Brexit question was settled and Covid was tackled.
I set out buying UK shares and creating my own UK portfolio. It is this folio that has shown the 56% increase in value in 6 months or so. And this does not take into account dividend income.
Most of the shares I have purchased are long established blue chips. Shares like Lloyds Bank, HSBC bank, Vodafone, BP, Barclays Bank, GlaxoSmithKline.
The UK economy is now showing robust good health as it recovers from the Covid 19 pandemic faster than most economies.
So my plan is to do nothing, sit tight, and just hold these shares.
As I said at the outset, I am no investing genius. But a broad appreciation and feel for a country and its economy, together with some basic but important research and an open mind, can allow anyone to make financially sound decisions and achieve excellent returns from buying little bits of companies.
The general philosophy which I employ, and which I have learned over the last 35 years of investing, is the basis of my online investment course. You can learn more about that course here.
