GeoffF100 wrote:Cheap trackers were not available 30 years ago. As i understand it, your portfolio turnover was much less than the 100% plus typical of managed funds nowadays, so you would not have incurred their costs. You also invested in stocks which were, on average, riskier than the market as a whole, and earned higher returns as a result. You were also less diversified than a world tracker, but that was not available to you. Less diversified portfolios are riskier, but that can work in your favour as well as against you. Finally, of course, 30 years ago, you did not know whether you would be lucky or not. As it happens you have been lucky. The safe assumption is that we will not be lucky, and do not have any special investing skill.
So, by managing my portfolio differently from the typical managed fund, I am able to get better results. As you are no doubt aware, diversification only helps to a certain level. 15 holdings is the smallest to get adequate diversity, and the benefits taper off as the number of holdings grows. By your argument, holding 350 shares, weighted by market capitalisation, is more effective than holding 30 or so, initially evenly weighted, slanted towards income, kept within certain limits and managed to preserve income. I do not buy your argument.
Nowadays the markets is manipulated by automated trading, institutional dealing, and rumour, not to mention shorting. Trackers can never, by definition, do better than the market, and they respond only to the amount of money invested in them or withdrawn from them and to changes in their benchmark. In effect they are subject to manipulation.
30 years ago I had already been investing for 30 years and had decided which route performed best for me. That was the route which I followed. It is not always a smooth path, sometimes you win, sometimes you lose, but over a long timespan it wins. In April 1987 the FTSE100 was 1949.4 and at the end of 2017 it was 7687.77, an increase of 294%. My income unit value rose from 100 to 669 over the same period, an increase of 569%. I trade infrequently and only to meet my own rules. My case rests.