St Albans Investment Group

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Home Investment Strategies
There are a number of approaches to investing – these include:
  • Value
  • Contrarian
  • Dividend
  • Trading
  • Growth

Following a particular methodology consistently, tends to generate better results than a random selection approach.

Value

This is an investment approach fathered by Benjamin Graham (mentor of Warren Buffett) and David Dodd in their investment classic Security Analysis (1934). This involves investing in companies at below their intrinsic value.

In simplistic terms it's like buying $1.00 for 50 cents.

A number of approaches are used to determine a company's intrinsic value. A common approach is to buy companies whose share price is trading below 'book value' or Net Tangible Asset (NTA) backing.

Contrarian

Related to value investing, this method also takes advantage of mis-pricing by the market. In essence, wide spread pessismism can drive a share price so low that it's prospects and value is significantly understated.

Dividend

This method focuses on investing in companies with a relatively high and consistent or growing dividend. As well as the cash benefit of receiving the dividends, the market tends to eventually re-rate stocks that have a relative high and stable dividend.

A form of dividend investing was promoted by Michael O’Higgins in 1991 in The Dogs of the Dow.

Trading

Trading involves buying and selling shares relying on short term gains. Traders use Technical Analysis (charting) tools to assist in buying and selling decisions.

Note: Traders must pay capital gains tax on their profits.

Growth

This strategy seeks out stocks that are deemed to have good growth potential.

A variation on this is a hybrid of growth and value investing that was popularised by Peter Lynch, which is now commonly referred to as growth at a reasonable price (GARP).

The St Albans Investment Group follows a growth style investment methodology very similar to the GARP strategy.

 

Unit Price

Current Unit Price

(as at 30 September 2017)


2.0100


Annualised return

(since 23 June 2008)


7.82%