In order of investing, my approach is primarily centered around selecting individual stocks based on thorough analysis. It has a quite good stake of my portfolio.
To illustrate, during my long experience as a Professional Investor at a previous company, colleagues often made predictions about interest rate hikes, the trajectory of the VIX (volatility index), and specific currency movements. However, I firmly believe that such predictions are inconsequential and can be detrimental to an investor. Echoing the sentiment of Peter Lynch, who suggested that dedicating just 13 minutes annually to economics is excessive, with 10 minutes being a waste.
In essence, the essence of investing lies in acquiring companies at prices lower than their intrinsic value. Hence, a focus on fundamentals is crucial. The goal is to procure exceptional companies at reasonable prices.
My portfolio beats the market
While I acknowledge that certain stocks and sectors in the US exhibit elevated valuation levels, I am confident that attractive investment opportunities still exist in today's market.
Furthermore, I hold the viewpoint that the forthcoming fifty years may not match the prosperity of the preceding fifty years in the stock market. The rationale is straightforward—earnings growth in companies is fundamentally tied to economic growth, driven by productivity improvements and the expansion of the working population.
Analyzing the United States and Europe, it's evident that the working population is expected to plateau or experience a slight decline in the coming decades, posing a challenge to sustained economic growth.
Despite this, I advocate for continued stock investment. Stocks serve as a reliable hedge against inflation, and over the long term, they tend to outperform other asset classes.