Many of us will be familiar with the concept of a stockbroker, fund manager or analyst making a call on a stock; as to whether an investor should sit on it, if they hold it, sell it or buy it. Sometimes these are run as sessions, such as at seminars or published in investor newsletters or videos and can be entertaining if presented in the correct context.
While these sessions and articles can be quite helpful in providing insights as to why the broker, fund manager or analyst arrived at their decision, and also the process they went through to land on that call; they should be considered just as that – an insight to the thinking, and not specific advice.
They may also be helpful in highlighting that investors need to be aware that having bought a stock, its appropriateness to their portfolio can change over time and it may become a sell. There is a saying that ‘Your stocks don’t love you, don’t fall in love with them’, which is effectively saying ‘Keep a clear head when investing’. Other sayings also include, ‘Like the prodigal, it will come back’, ‘It cannot go much lower’ and ‘I’m a conservative investor, it will be alright’ and on the other side ‘This has a lot further to go’ or ‘Its backed by strong management’.
These have been quoted at many ‘Buy’, ‘Hold’ or ‘Sell’ sessions to support the call.
But there is another saying, more native to how markets work that is worthy of consideration.
Let’s see what it could be.
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Ian Irvine – Guest Contributor
Ian has been a keen investor for over 40 years and can draw on his experiences from both investing on his own behalf and also having worked in financial services for more than 30 years. Over this time, he has seen many changes that impact investors’ attitudes to in what and how they invest.
He started his career in what is now referred to as fast moving consumer goods (FMCG) or grocery, working for an Australian margarine manufacturer. In 1986, he was recruited to Westpac around the time of deregulation of the sector, where he spent 10 years before taking a role at AMP and then with ASX for 14 years up to the end of 2017. He continues to be involved with ASX; working on their educational programs.
In 1996, he and his wife established their own SMSF and again the experience and lessons learned regarding managing an SMSF over the years have provided him with many insights and ideas. He enjoys sharing these with others where these are helpful and always suggest that if an investor or SMSF trustee is unsure, that they should seek appropriate advice from a licenced professional.
Ian holds a B. Com (UNSW), and lives in Sydney and enjoys travelling to and meeting investors and SMSF trustee at the educational events with which he has involvement with from time to time.