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Q & A: Focusing investments By Hannah Ricci
I have been buying and selling shares without any real gains or losses for the past five years or so and my approach to stock selection is quite aimless. Could you recommend any worthwhile training courses in this subject? AW-W/Yorks Adviser: Philip Pearson, partner at P&P Invest, Southampton Many people adopt a similar approach towards investment as you, aimlessly buying and selling stocks because they have a feeling that they might increase in value. This approach is haphazard and without any logic - you have just as much chance of losing money as gaining and in reality it is little different from gambling. An informed decision is always best when considering investment, so you need to gain in-depth knowledge and develop some expertise in stock selection. But this approach is impractical when considering the stockmarket as a whole, given the number of companies quoted and the time required for research. An alternative approach is to focus on a particular sector of the stockmarket that you are interested in and build up your in-depth knowledge of this limited sector. Rather than going on a course, I would suggest you get reading. The strategy I have outlined is detailed well in Jim Slater's famous book, The Zulu Principle. This shows how a complete novice can become an expert by devoting their time to a specialist subject and gathering information on it from a wide variety of sources. If you have the discipline and motivation to do this then you will be in a better position to identify good buying opportunities within the UK stockmarket.
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