General Investment Strategy Part 1  – The Past

If you are reading this blog then you may want to know a little more about me and why I am providing advice on this site. In short, its to help people let their money work for them, whilst being wary of greed.

My investment journey began in 2008 with the fall of Lehmann Brothers. Unfortunately I was not in a position to do what those in The Big Short did, but as I compared the share price of Lloyds and RBS to a lame duck in the Arctic Ocean I thought to myself ‘UK banks won’t be allowed to fail – the cost of failure would far outweigh the cost of bailing them out’. And so, I opened an account with Charles Stanley and threw my cash into these two companies…

 

…and it worked.

 

I bought RBS at 22p and later sold for 47p

 

I bought Lloyds at 55p and sold at 108p.

 

I felt on top of the world, like I was an investment guru in my own right.

 

I was naive

 

I was wrong.

 

Armed with my newfound arrogance I proceeded to take my money elsewhere, into the depth of AIM. If the FTSE were a river, then AIM would be this…..

 

red-river

Toxic

 

I now believe AIM to be much like rigged roulette. You are told that the rig is in your favour, but you’re 99% sure that guy who told you that is a liar.

In 2010 I did not know this. I thought I knew how things worked. Precious metal prices were on the rise and I knew that junior gold explorers were the way forward.

So, amongst other shares, I bought tranches of shares in RRR and RGM, and watched them soar from pitifully low prices of 3p and 2p respectively, to 19p and 12p.

By now my portfolio had grown from £15,000 to £50,000. I felt like a king.

Until the price of gold reversed from the $1700 highs. I refused to sell as the share prices dropped, believe that the price would rebound and gold would soar beyond $2000 an ounce. I took the investment presentations of companies at face value and attempted to ride it out.

 

rrr-price-chart
RRR’s share price continued to plummet even after I sold

I eventually sold out at 6p (RRR) and 3p (RGM). My average price was around 9p (RRR) and 8p (RGM), meaning my portfolio had crashed from £50k+ to around £20k.

 

I was still in profit and that’s not to be sniffed at – but it was my greed and my belief in certain charismatic figures that kept me invested in the AIM stocks, and I suffered for that naivety.

 

So, emptying the account I placed  deposit on my first flat…and was done with investing until I matured.

 

which brings us on to January 2016.…

 

One thought on “General Investment Strategy Part 1  – The Past

  1. Interesting what you say about greed getting the better of you, much like gambling you need to know when to pull back. I like your use of personal stories to highlight your message, makes it much more relatable

    Like

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