BOOK REVIEW – ACTIVE INVESTING
How to manage your portfolio like a professional in less than one hour a week
By Alan Hull
In today’s wired world there are an over abundance of products for the average investor; ranging from stock selection services through to software programs promising to pick the next hot stock.
It’s no wonder that the average investor is often paralysed, like a possum in the headlights, by the sheer overload of information.
This book is Alan Hull’s response to this confusion. In it, he demystifies some of the beliefs of investing and empowers you to make your own investing decisions, without risking the family home of your hard earned savings. Hull encourages you to be an active investor.
Hull will show you how to implement a straight forward, common sense investment technique that takes less than an hour a week.
Hulls’ definition of an active investor is someone who manages their assets and trades shares. Whereas Investors manage their assets and Traders trade shares.
The book briefly touches on the fundamental topics such as market capitalisation, price/earning ratios, price/asset and dividend yields.
Hull seeks out blue-chip companies with good fundamentals, and recommends books such as Top Stocks to assist you in your decision process.
Technical analysis also plays a part in the active investors decision making. “We simply want to profit from having the balance of probability working in our favour. I am not trying to be clever, not seeking perfection – just profits,” says Hull.
Chartists may be familiar with the ActVest range indication. This is a series of three lines based around a moving average trendline, with an upper and lower tolerance line which ultimately form a channel around the price movement.
The decisions (and emotions) around buying and selling then become clear cut. For example, as the price moves above the upper line it is an indication to sell and take profits.
Hull also touches on your risk management strategies and the importance of using stop losses. Measures such as these will ensure your account lives to trade another day.
A useful chapter includes some ‘real life’ examples, albeit slightly outdated – the market was somewhat different back in 2007. However this section is useful to see how you would put the strategy into place over four weeks and indeed how it could take just a few hours each week to manage your portfolio.
Hull has dedicated a new chapter to short selling using CFD’s – which gives you an overview of how to implement the range indicator system but in reverse to take advantage of market declines.
This is a great book for both new investors and experienced investors alike. It simplifies the investing process and breaks it down to a manageable system that anyone could implement if they are serious about taking their financial future into their own hands.
5/5 stars
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