At a recent social event, I happened across some other Saltydog subscribers. After some banter about what was a socially acceptable plural term for ourselves as a group, the conversation turned to our various experiences as investors.
Risk was a leading topic. All of us erred on the side of caution, mostly using the Tugboat example portfolio for guidance. We also talked about the amount of time each of us spent on the administration of our Saltydog portfolios. Most of us had a regular routine, sometimes on a daily basis. None of us mentioned that the activity was onerous, but avoided according it hobby status.
The method of dealing appeared to be mainly on line using discount dealing only platforms. We generally regarded this method as efficient and reliable.
I was pleased to be having this discussion at this time because at the beginning of April I had just completed a four year review of my own efforts.
How time flies. I have been investing using the Saltydog data and principles since its inception in early 2010. In the four years to March 2014 my original portfolio of ISAs has grown by 47%.
My attitude to risk has led me to operate in my own category somewhere between Tugboat and Ocean Liner, which I will call, unsurprisingly, Ocean Tugboat. Looking back over my weekly records, and to continue the nautical metaphor, I have over the years reduced the number of times I have swum off the boat while it is still under way. As all seafarers know, this is not a smart thing to do. I have and still am learning lessons. Probably the biggest test has been to stick with the data. This act alone takes away so much uncertainty, which leads me to my second learning point.
There are an infinite number of factors which effect stock market performance. There are a huge number of people earning good livings trying to second guess the system. Why should I try and join them?
As for tactics, being out of the market in times of difficulty is one of the most effective lessons I have learnt. I’ve tried to stop asking myself impossible questions about things like gold, North America, China and Japan. I’m now of the view that learning, or rather adapting to conditions, is a never ending process. This is why the seafaring analogy is so appropriate.
Those of us who are fortunate enough to visit the sea regularly are in a position to observe its infinite range of appearance and behaviour. And all the time, it’s still there and still wet!
After four years I feel that I can now justify promoting myself from deckhand on my Ocean Tugboat. I think perhaps I could hold down the job of third mate. For the time being that will do. I will have more time to stand and admire the view without getting too wet.