Embarking on the journey towards taking greater control over your own investments can be a daunting prospect, but sometimes life changing events can be the catalyst.

Around four years ago Andy decided to take a permanent job after many years of contracting and was very pleased with the new role and the opportunities it presented as he moved towards his retirement.

TAKING CONTROL

However, one drawback was that it brought in less cash every month so that got Andy thinking if he could make a difference by taking charge of his own finances.

This process led him to consider his long-term plans. Inspired by a work colleague and friend who had consolidated his own pension pots Andy opened an ISA (individual savings account) and SIPP (self-invested personal pension).

He then set about consolidating two executive pensions related to his contracting company and a defined benefit pension, assisted by an IFA (independent financial advisor).

Deciding whether to consolidate pension pots is a complicated decision, especially those involving defined benefit plans, so Andy did the right thing to consult an investment professional.

After much thought Andy decided not to pay an IFA to advise him on where and how to invest the money, but instead took the decision to teach himself the basics of investing.

Andy went about the task in a methodical way, saying, ‘I decided to teach myself as much as possible using YouTube, investing blog posts, and Shares magazine.’

‘I learnt about the pros and cons of stocks verses funds/investment trusts, compound interest, comparing growth charts relatively and the basics of company finances.’

FOLLOWING THE GREATS

Before starting out on the process Andy didn’t know anything about how a company made money but taught himself enough so that he could identify if a company was profitable or not.

Andy reasoned that to give himself the best chance of success, he should study the best investors and that led him to famed investor Warren Buffett.

Taking a leaf out Buffett’s play book Andy has adopted a long-term ‘buy and hold’ investment strategy with an investment horizon of five years or more and he tries to learn as much as he can about a company before investing.

Speaking like a true Buffett disciple, Andy says: ‘If you don’t understand it, don’t put your money there.’

DOING THE RESEARCH

Andy gathers information about a company from its investor relations website to ‘get a feel about a business’ and uses Google Finance to compare companies relatively which he says is a great asset.

Researching an investment idea, whether an investment trust or a stock is a ‘real thrill’ said Andy, especially when it turns out well. Successful investments he has made include Baillie Gifford’s Scottish Mortgage Trust (SMT).

When asked about his worst performing investment Andy pointed to robotic software firm Blue Prism (PRSM:AIM) although he said he was able to sell the bulk of his holding before it crashed down to £8.

The least favourable aspect of investing for Andy is ‘that sinking feeling when the markets panic over something or nothing and you know that your investments are heading south for a spell’.

Andy suspects that sometimes share price falls are manufactured or ‘helped-along’ by the big players to create a buying opportunity for themselves as ‘things always seem to recover’.

Now that Andy has managed his own investments for a while, he is more circumspect of investment firms touting their fund management services.

When one well known investment firm approached him recently to manage part of his savings he had a chance to compare the firm’s flagship fund holdings to his own and soon realised ‘what the score was’ and passed on the opportunity.

A BLENDED APPROACH

Andy’s portfolio is a blend of investment trusts, exchange traded funds and hand-picked individual stocks. He said that although he now feels ‘sure-footed’ about investing he is not totally confident to go down the all-stock route.

There are always new things to learn in investing and Andy said he would like to develop the necessary skills to spot the next Amazon or Microsoft, and potentially earn 100 times on his investment.

Ultimately Andy wants to grow his investment portfolio into a big enough pot so that he can live off the annual growth and dividend income without eroding the capital base, giving him something to pass onto his children.

Achieving that goal will depend on Andy’s personal financial circumstances at retirement, his lifestyle, and the amount of income he requires in relation to the size of his pension pot. Andy is a homeowner.

Outside of investing Andy leads an active lifestyle, spending as much time as possible outside, running in the park with the dog, riding around the countryside on his bike and swimming in open water.

Part of the reason says Andy is that ‘at the back of my mind I’m thinking it’s important to stay in shape if you want to enjoy the fruits of your investing in a long and healthy retirement which isn’t too far off for me now’.

WOULD YOU LIKE TO FEATURE AS A CASE STUDY
IN SHARES?

We are looking for individuals or couples who can discuss their experience with investing and some details about their portfolios.

Anyone interested should email editorial@sharesmagazine.co.uk with ‘case study’ in the subject line.

DISCLAIMER: Please note, we do not provide financial advice in case study articles and we are unable to comment on the suitability of the subject’s investments. Individuals who are unsure about the suitability of investments should consult a suitably qualified financial adviser. Past performance is not a guide to future performance and some investments need to be held for the long term. Tax treatment depends on your individual circumstances and rules may change. ISA and pension rules apply.

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