johnrosier

In summary: Growth at the right price with the emphasis on "the right price".

I invest mainly in UK stocks as that is where I have gained my experience. Where I do have overseas exposure it is generally through holdings in investment funds. I prefer Investment Trusts but also use Exchange Traded Funds. I focus on mid-sized companies   The FTSE 250 is in my view, an excellent hunting ground for companies with good growth prospects and reasonable valuations.   I invest in FTSE 100 companies when there is a compelling reason and also in smaller companies but usually with a market capitalisation cut-off of £50m. Small companies can be incredibly rewarding but they are also far more risky as the share price can move violently on little news and it can be difficult to get out when you need to. Most of my individual stock holdings are in UK companies but I also invest in Exchange Traded Funds in order to gain low cost exposure to overseas markets, commodities or precious metals. Occasionally I invest in Investment Trusts. I favour companies that are valued attractively relative to their rate of profit growth In general I invest in companies where the projected PE ratio is below 15x and the PEG Ratio, (PE Ratio divided by the growth in earnings) is below 1.5x. I tend to steer clear of companies with high levels of debt. I like investing in companies that are hitting new price highs I regularly screen for companies that have hit a new 12 month share price high and then try and understand why it is doing so. If I think I have worked it out, and it meets my other criteria, than it may well be worth an investment. I do not invest in companies where the share price is in free fall. I will wait for it to stabilise and recover somewhat before being tempted to investigate. When making an investment I always set a stop-loss My view, learned through bitter experience, is that you are best cutting losses quickly. Conversely you should let your winners run. As Warren Buffet said “cut out your weeds and water your flowers”! All too often we are tempted to do the opposite. We add to our losers as it reinforces our original decision to buy it: “I was right to buy it at 100p so I must be even more right to buy more at 85p, after all it’s cheaper. Oh, and I will fund my purchase by selling some of my holding in another stock which is doing really well!” My view is that one should sell and move on – it saves a lot of emotional heart ache as well as money.