MR MONEY MAKER: Being a Boxing Day sloth makes for long-term wealth

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Boxing Day used to be the day for long walks, for some, watching the local hunt charge off into the hedgerows, for others a football match or the sales.

It’s a flight of fancy for most of us these days and especially this year. So as 2020 draws to a close, Boxing Day may involve doing some credible impersonations of sloths dozing on the sofa.

But what does this have to do with your investments? A lot. Not only may it be a good time to review your holdings, but also to remind yourself to leave your well constructed portfolio alone, so it can continue to do its work while you are still in a somnolent state.

Not only may it be a good time to review your holdings, but also to remind yourself to leave your well constructed portfolio alone

Why Does It Matter?

Every week we seem to be bombarded by yet another investment fashion fad or top tip. And yes, I plead guilty to being part of this as well as making errors of my own. 

There are many mistakes and bear traps with investment, but two that I have made are firstly not investing and thus missing out, and secondly, fiddling too much with my investments.

The first is easy to achieve as doing nothing means that you are considering your ideas, or rather, you are not confident enough to do anything. 

The second point though, is one that my industry will rarely emphasise – once you have made your decision, then leave it. If you are a fanatical day trader then you will be of a nervous disposition and probably have already acquired a twitch. 

All you achieve by constantly chopping and changing is to benefit your broker or platform provider with transaction fees. Slow cooking makes for beautiful food, slow investment makes for longer-term wealth.

What Should I Do?

Once you have decided upon your financial goals, your portfolio is there to fulfil them over a timescale you think suitable – hopefully a long one. 

Now we search for those companies and funds likely to achieve your aims, and despite what the scary headlines would show you, this does not have to be a lottery win or a bet on a one-armed bandit.

Any Suggestions?

I like to have something steady which will allow me to snooze peacefully during my locked down Boxing Day.

Where do I find this? I have always been a fan of Investment Trusts, but prefer those which operate with a reputation for consistency in terms of performance and income and at a low cost.

In fact you can have quite a choice, as there are three investment trusts that you buy just like ordinary shares, but which have had a long track record of rising dividends.

City of London, Bankers and Alliance have lead the way and increased their dividends for a staggering 52 consecutive years. Now that is a good example of financial consistency for any aspiring sloth like me.