Question No. 10

"What Skills Do I Need
to Be a Successful
Pension Manager?"

Our Response

It's not skills you need particularly.

What you really need is the right attitude and desire.

As long as you can log on to a computer you already have all the 'skills' you require.

Once you've chosen your desired 'Pension Plan Provider' it's all down to you and the choices you make. 

What investment decisions are you going to make?

When will be the right time to buy your chosen share(s)?

When will be the right time to sell your chosen shares?

Don't worry - you will not be alone on this website. The answer to all those questions, and many more, will be covered.

The information on our website will show you, step-by-step what you need to do.

The idea of the website is to force you into a different way of thinking.  That thinking is nothing new, but most investors don't, or won't, employ it.

So the real skills that you will need are discipline and patience.

In the paragraphs that follow, we give you a synopsis of the varying levels  of understanding that you'll need.  Starting with the Big Picture.

"The '30,000 ft.' View
(aka The Big Picture)"

We call this overall view the 30,000 ft view. 

Here's what you shouldn't be doing:  buying and selling, and more buying and selling. It's called churning.  Always looking for that quick profit.  The only people getting a quick profit out of that strategy are the brokers.

You would need to be a fully-seasoned veteran to trade like this and most of us are certainly not that.

Or maybe you started late and want to make up some ground.  Thinking you can make a quick turn here and quick profit there. Chances are - you won't.

No!

Don't do it.

Here's what you should be doing: looking at the long term (no matter what your age).  Where long term is 10 years or more.  Research well and buy at the right price.  By all means get out when you have to, but that may not be very often.

Even if you started saving as late as 60 years-old, you must still invest with a long term philosophy.

"The '10,000 ft.' View"

The Fundamental Analysis on our website is mostly about what Warren Buffett calls 'Value Investing.'  His mentor was a chap by the name of Benjamin Graham - he became known as 'The Father of Value Investing'.

But there was another chap - Philip Fisher.  He became dubbed 'The Father of Growth Investing'.

Investors today are either 'value' investors or 'growth' investors.  On our website, we make a case for being both. 

What does Warren Buffett think?

Warren Buffett is known to have said: "I'm 85% Graham and 15% Fisher."

Well, after you've read about both systems on our website, you decide whether you want to be 85/15 Graham/Fisher or 50/50 or whatever.

In the section 'Fundamental Analysis' on our website, you'll get a good description of both of those systems.

Study them well.

"The '1,000 ft.' View"

If now you've decided on your system for investing (remember, this is a marathon not a sprint) you need to decide on what individual shares you are going to invest in.

If you are planning on beating say, the DJ30, then do your research on the constituents of that Index.  Some of those constituents you may disregard immediately.  Perhaps, after a more detailed look you are left with around 15-20 to pick from.

N.B.  The DJ30 (a.k.a. Dow Jones Industrial) only comprises of 30 stocks.  It is a better idea to use the FTSE100 (a.k.a. Footsie) as your benchmark.

Do your research on the FTSE100 and pick out the ones you like.  For sure it won't be all 100 of them.

Picking out the ones you like doesn't mean that you're going to invest in all of them.  That would be nonsense.

"At Ground Level"

'Ah, now this is where the rubber hits the tarmac.  This is where we do a more detailed analysis of individual companies.  We do both Fundamental Analysis' and 'Technical Analysis'.

It's all much better explained on our website but briefly we use 'Fundamental Analysis' to flag up a company (a.k.a. what to buy) and we use 'Technical Analysis' to tell us when to buy (or sell).

The skills, or techniques you'll need to do 'Fundamental Analysis' are all explained on the website and are not too difficult.  Anyone of average intelligence will have no trouble. 

For 'Technical Analysis', you will require some software.  The program we use is extremely cost effective (i.e. cheap) but there is also free stuff out there on the net.

We don't do free (except for our iPhones).  We're old school.  We believe that you get what you pay for.

Conclusion

And that's all there is to it.

Here it is broken down:

1. Look at the Big Picture

2. Decide if you're going to be a 'value' investor or a 'growth' investor, or a bit of both.

3. Decide what individual companies you want to put on your watch list(s).

4. Do the analysis of those companies, both Fundamental and Technical.

That's it.  Just Four steps.

How many special 'skills' did you spot?  Not many.

And you won't.  Our website wasn't prefixed with the words 'Common Sense' for no reason.

That is the real skill that you need. 

Footnote

As a newbie, you may want to read the other "Frequently Asked Questions" on this website.  Doing so, will give you a good introduction to running your own DIY Pension.

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