I've always been an unlucky investor. I chose Equitable Life to run my first ever personal pension, and you know what happened to them. I bought tech fund star Aberdeen Technology in March 2000, one week before the dot.com crash. I bought the banks just before the credit crunch and sold them at the end of December, just before January's rebound.
Every time I commit to a stock or sector, it falls 30% within a week. Unless it falls 40%. If I sell, it rebounds 30%, as the banks just have.
I am a one-man contrarian signal. If you were to short every stock or fund I bought, you would be rich.
Too quick off the mark
I can put most of my other big mistakes down to my own impatience and short-sightedness. I was too quick to snatch at the falling knife of BP after the Deepwater Horizon drilling disaster, for example.
Similarly, I was too quick to load on banking stocks after the financial crisis. BP and Barclays (LSE: BARC.L - news) both still had a long way to drop. Both were instant 40% fallers.
Anti-Midas (NYSE: MDS - news) touch
I was too hasty to dive into AIM-quoted gold producer Vatukoula Gold Mines (Other OTC: VATKF.PK - news) last year, purely on the say-so of a smaller companies fund manager. My failure to spend time watching the stock was punished by an instant 40% drop.
High (Euronext: HCO.NX - news) -street betting company Ladbrokes (Other OTC: LDBKF.PK - news) was another big-time instant loser. As was last summer's attempt to play the rising oil price with the Junior Oils Trust.
And I can barely stand to think about what happened to Axa Property Trust . Another rash decision, another 30% slap in the face.
I have the opposite of the Midas touch. Every time I touch a stock, it turns to lead.
Absolutely Mullered
Yet when I look down my portfolio today, it's not that bad. As BP steadily recovers, my repeated attempts to catch that particular falling knife are beginning to look a little more elegant.
Ladbrokes is now close to breaking even. Vatukoula Gold Mines is heading in the right direction. RBS (LSE: RBS.L - news) (LSE: RBS), the one bank I held onto, is making good most of its rapid 50% loss.
And I've just accepted Muller Dairy's offer to buy my shares in milk producer Robert Wiseman Dairies at 390p, turning my one-time 25% loss into a 25% gain.
So has my luck finally turned? No, I don't think so.
No friend like an old friend
Looking through my portfolio, many of the best performers are my legacy unit trusts. Artemis UK Special Situations is up 122%. Invesco (NYSE: IVZ - news) -Perpetual Income is up 77%.
Two investment trusts, Baring Emerging Europe and Scottish Oriental Smaller Companies , have more than doubled in value. BlackRock Latin American has tripled.
What do all these funds have in common? I've held them for years.
And that's the only thing I've done that has produced consistently successful results since I started investing. Holding on for the long term should generally produce good results in the end, even if the beginning is a bit dodgy.
Time doesn't heal every wounding investment choice, but it does heal a lot of them. That's why I'll be holding onto BP, Vautukoula, RBS and Ladbrokes.
Living it long
Realising this has changed my attitude to future investments. From now on, I'm only buying long-term prospects.
I'm lining up a balanced portfolio of low-cost trackers and investment trusts, supplemented by steady, dividend-yielding blue-chips, that I can tuck away for a couple of decades.
You see, I've discovered that over six months, I'm an investment disaster scenario on legs. But over five years, and especially over 10 years, I muddle through just fine.
The longer I invest, the luckier I get. So I reckon that over 20 years, at which point I turn 65, I should have a fair amount of good fortune.
Time is on my side. Even if everything else is against me.
> Harvey holds shares or units in BP, Vautukoula, RBS, Ladbrokes, Baring Emerging Europe, Scottish Oriental Smaller Companies, BlackRock Latin American, Artemis UK Special Situations and Invesco-Perpetual Income. The Motley Fool owns shares in Robert Wiseman Dairies.
Originally posted here:
The Link Between Luck And Longevity
Recommendation and review posted by G. Smith
