some preliminary thoughts on an equities strategy

I've been reading a bit about behavioural finance. I'm time poor and as a result probably not as good a share investor as I thought I was...

I'm thinking that perhaps I should adopt an approach of directly trying to replicate the majority of an index (say ASX20, 50 or 200) and then as share growth increases, try to lock it in with some form of index put?

I appreciate there will be an asymmetry between the long and short position but I think that with a bit of common sense and a dash of luck you can outperform even a low fee index fund due to the tracking error.

By buying some or all of the ASX20 you could cover off a significant % of the ASX 200.

Or should I just throw up my hands and park it all in funds to get a mix of beta and alpha and forget about it...

Thoughts?

 

Nigel,

Are you talking about active investing/trading ?

“Or should I just throw up my hands and park it all in funds to get a mix of beta and alpha and forget about it... ”

That would be the last thing I would consider.
I learnt a long time ago that nobody would make money for me....
Oh yes.....long term approach...Personally I prefer to make money today and spend it ‘tomorrow’ instead of hoping (hope is a 4 letter word) that in 20-30 years time I’ll become multi rich.
Certainly there is nothing wrong with beta, alpha, tetra etc......if supported with reasonable amount of cold and wet beer.

If you are ‘time poor’ you may consider ‘Hull Active Trading’ approach Alan Hull - Active Trading

 

Thanks Tropo

I have his Active Investing book...not sure it's possible to actively trade when time poor...but open to the possibility.

Cheers
N