Our club has always taken a fairly structured approach to investing. We were very keen to establish some sort of strategy early in the life of our club and this is why our first meeting after the inauguration of the club was a Strategy Planning meeting. As our Club evolved and our experience and confidence increased, we revised the strategy and formalised it in 2001 when we produced our Investment Strategy document. Our Club has been very successful in terms of the returns we have had from our investments and we are proud of this success. We strongly believe that a considerable factor in our success has been the thought that has gone into our strategy and the discipline of following it.  The Strategy sets out the concept of a "3 sub-portfolio" approach with each having its own, well defined characteristics.

Please read our strategy and please let us know what you think. A quick summary is provided below.

Strategy Overview

The club's assets are split into three sub-portfolios:

Companies that we believe will produce a steady return over a number of years. Detailed analysis of a company's fundamentals are required and a buy proposal document must be produced before the club will consider a purchase. In practice, this portfolio has frequently been underweight as (a) it requires a fair bit of effort to perform the necessary analysis and (b) it has been difficult to find companies that we are all happy to agree on!

This sub-portfolio provides a means by which we can make higher risk investments, invest in markets or instruments that we wouldn't otherwise consider, etc. Less analysis is required than for the Fundamental sub-portfolio. A buy proposal document must still be produced but a cut-down version is used reflecting the less detailed level of analysis required.

Shares are bought and sold on a regular basis using clearly defined criteria. To provide diversification, shares are selected on alternative months using 'value' and 'growth' criteria. Further details can be found in the mechanical investing section.

A more detailed presentation on our club's strategy and how it works was given to the Mobius Investment Club in December 2004 and can be found here.  The theme of this presentation has been revisited for presentations to the annual National Investment Club Conferences that started in 2007.

Annual Reviews

We formally review the strategy each summer. In order to assist the review, the performance of each of the three sub-strategies is analysed and we determine whether it they have met their stated objectives.