a href=http://Www
Www.amey.co.uk is simple but impressive. Here is a feet-on- the-ground, well-managed company, adaptable, profitable and recently promoted to the FTSE 250 Index.In another life, I worked for Wimpey so I call my contacts in the building business Amey has a good reputation I ring City friends Analysts like Amey. I like Amey too, so they are going into my ISA.The other company I am keen on is Bristol United Press Trouble is the Daily Mail likes it too While I dither, they buy the whole company. For a variety of reasons the three other companies are eliminated.I still need an ISA for Mrs B. I turn to the file I keep, headed: “Shares I really, really, really like but don’t own.” There I find SFI, the group that operates pubs, hotels and restaurants, mainly in the South-east.
I have been meaning to buy these shares again since I sold them 18 months ago. Then, after holding them for six months, I walked away with a 25 per cent profit.I re-examine the fundamentals and, if anything, SFI is even stronger than when I first chose it for my portfolio. Again, I talk to people and there is universal approval for SFI. Coffee shops and sandwich bars have been added to the Litten Tree pubs. The Bar Med operation is so strong they charge for entrance and premium-price the drinks.
Brokers like SFI and forecast profits are rosy.Chairman Tony Hill has recently bought a further 10,000 shares at market price. The clincher is that management has committed itself to a target 35 per cent annual growth rate SFI is now in Mrs B’s ISA.BACK TO school. I have spent a day at a desk in a Dusseldorf classroom with a dozen private investors from Europe. We wrestled with share selection and the criteria we should tell investors to use to identify companies with a proven pedigree.The Belgians insist on following the American system, five years of historical figures and graphs. The Dutch prefer at least 10 years of data, projected for at least four years. The Germans are worried the whole thing is getting too complicated for the novice investor. I agree with the Germans.These differences, combined with the fact that national information providers do not present company facts in a standard format, mean we are unlikely to find a formula which suits everyone.But there are four matters of principle on which we members of the World Federation of Investors do concur.n Buy shares in companies with a proven success record and growth potential.
You seek shares your research shows are companies you will be happy to own for at least five years, barring accidents.n Invest regularly and ignore market volatility. If you invest what you can afford at regular intervals you are bound to benefit Long-term, the overall trend is up.n Reinvest all dividends. The beauty of investing in a successful company is that usually you benefit from two sources – your capital increases in value as the price rises, and successful and profitable companies pay you a dividend Always buy more shares with that. You will be amazed at the difference it makes to your profits.n Diversify your portfolio. Despite the most diligent research not every share you choose will be a winner. You cannot guarantee which stock will perform better, so you have to spread risk and opportunity Diversify in company size and market sector. This means lower risk.Responsible investors should avoid high-risk stocks.