Christopher Morris, a qualified part-time accountant, has been investing for around 30 years. He says: “I started investing when I was at university. I very much consider myself to be an investor, not a saver, as I’m looking for capital appreciation.
“Anyone who saves in the current monetary climate is not doing themselves any favours, and is just giving their money away because savings rates are less than inflation.”
Morris, who is now in his 50s, says he holds a diversified portfolio of shares and funds, and uses tax-efficient ISAs where possible.
He says: “I tend not to stick to any particular methodology when selecting shares or funds for my portfolio; I simply examine the individual holdings, look at the wider economic environment and try to consider the future prospects.”
The key he says is to be flexible and not stick too rigidly to one particular style, or certain funds or stocks. Morris says: “I try to keep up to date with things. If the circumstances change, I change my mind.”
Taking Advice from the Sage of Omaha
The pragmatic approach led him to change his investment outlook early on. Morris explains: “One of the biggest investment disasters I made was when I started out.
“I tried to do as much research as possible, including reading companies reports and obtaining analysis of different fund managers. Information was harder to get hold of back then, and challenging to connect. It was all paper reports, rather than information from a range of sources that can now be accessed online.
“At the time a well-known fund manager recommended investing in index trackers, on the basis that any increase in fund values was often swallowed up by the fees. I read similar recommendations in a number of books on investment, so I followed this advice.”
This turned out not to be the best course of action. “The fund manager who persuaded me of the benefit of tracker funds was none other than Warren Buffett. But if I had invested in Buffett’s own fund I would have seen far better returns.”
Morris says he now believes it is best to make your own investment decisions, and not be swayed too much by those in the industry. As a result, he takes a more active approach to his investments. His holdings include a number of global funds, technology funds, as well as some individual holdings in oil company shares.
Fund Picks for Growth
One of the tech funds is Morris’ portfolio is AXA Framlington Global Technology. As he points technology and other single sector funds are by their nature higher risk, but he says the fund has delivered decent returns in recent years.
According to Morningstar data this fund, managed by Jeremy Gleeson, has delivered annualised returns of 23% over the past five years. This strong performance, relative to its benchmark, means that the fund has a five-star performance rating.
Morris has not given up on passive funds entirely however, as he invests in the HSBC FTSE 250 Index, which he says has delivered better returns than some larger company trackers. As a passive fund this also has relatively low fees.
According to Morningstar data this has delivered annualised returns of 9.6% over the past five years.
Top Oil Stock Picks
When it comes to oil stocks, Morris says he holds both BP (BP.) and Royal Dutch Shell (RDSB) in his portfolio.
BP is currently trading at fair value. Morningstar equity analysts point out that this oil giant is reducing its cost base to survive in a world of lower oil price.
Shell, in contrast has a four-star rating, meaning it is trading below fair value. Morningstar senior analysts Allen Good says the company is well placed for a world where oil prices are lower, and has restored its cash dividend.
Morris admits that investing in individual shares is higher risk, and won’t be for all investors. But he says that these investments have paid off for him.
“I have been very lucky so far, and have used analytical websites, like Morningstar.co.uk, which I highly recommend, to research shares and funds. Investors today have no idea how fortunate they are. They have a huge amount of financial information now available at the click of a button.
“That’s not to say that investment is an exact science. I have been wrong often, in spite of all the analysis and hard slog – but this research has undoubtedly helped.”
Morris says that while the outside world can look uncertain at present, he believes that it also creates investment opportunities.
He says: “I don’t see the point in worrying about something that is outside my control. It is better to seek opportunities, than sit around biting your nails. For example, Brexit opens new opportunities, interest rates heading upwards can stop inflation getting out of control, while an ageing population means less impact on the workplace as robots start to take over.”
Climate change is another big shift which he says requires recognition of the need to control pollution and protect the environment. Firms that come up with workable and affordable solution stand to profit from societies awareness of climate change and willingness to deal with it, he adds.
