Shifting my investing style

Many people tend to pigeon hole themselves into a particular style of investing they identify with – Value Investors, Growth Investors, Income Investors, Index Investors, the list goes on and on. The talks and courses I’ve attended to date also tend to teach a singular method to investing, maybe because it is easier to sell and structure into a course / talk.

I used to be very clear on what my style was – High growth stocks all the way. However, over the past year, I’ve transitioned to a more income approach as seen by my portfolio comparison below:

Portfolio comparisonPortfolio pie comparison

Why the shift?

The main reason for the shift is my gut feeling that we are at a late stage bull market cycle and I need to be more defensive in my stock picks. You may or may not agree with this assessment, but my gut has rarely failed me in my 5 years of investing.

With that said, I may have gone overboard in my shift to income investing as more than half of my portfolio is now in slow growing income stocks. This is why I have held off on adding more income to my portfolio and have been eyeing any weakness in high growth tech stocks as evidenced by my recent buys into Facebook in July and Tencent earlier this month.

Going forward, I hope to maintain a 50-50 growth to income stock portfolio. This may impair my ability to continue to churn out market beating gains but at least I can sleep better at night, knowing the certainty of my dividends.

So how would I define my investing style?

Course providers / Speakers say that you should stick to a single tried and tested method to achieve market beating returns.

To my undisciplined mind, I don’t care for a single consistent approach. I buy stocks that I feel will give me a return, the reason for that return does not have to be consistent. Who cares it is because the stock is undervalued, or if it pays me a sustainable dividend while I wait for the company’s recovery, or if it is overvalued but will eventually grow into its valuation. As long as you potentially give me a return, I’m in. I feel this level of flexibility is important to survive different market cycles.

I suppose my investment style is anything goes for capital appreciation. I guess I won’t be conducting any courses / talks soon.

Summary

I used to laugh whenever I read that a fund’s investment philosophy was for capital appreciation. It was like duh, isn’t that the aim of investing? But now that I’m running my own “fund”, I get it. It just means being flexible and nimble in the face of market changes.

Something I’ll be continually shifting in light of current market conditions.

Happy Hunting,
KK

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