Brian Tora

Brian Tora is Investment Director of Gerrard Limited, part of the Old Mutual Group. He has chaired the firm's Asset Allocation Committee for the past nine years .

He is a regular columnist for The Independent , Fund Strategy , Money Marketing and the Investor Magazine .

General principles and the dangers of looking back

1. Define your objectives.

   It is all very well trying to be clever in the world of investment management, but unless you know what you are trying to achieve, you may just be barking up the wrong tree.

2. Take good advice.

   Nobody knows everything. You are sure to be able to benefit from other people's experience and knowledge.

3. Don't marry your stocks.

   I have seen too many professional investors fall in love with their holdings and fail to realise that they should get out at some stage.

4. Be prepared to take difficult decisions.

   This would include selling something at a loss or buying back a share higher than the price at which you last sold it. All you are doing is recognising you have made an error.

5. Never forget that the price and valuation of a share is a reflection of what other people believe, not just a result of your own opinion.

   If the rest of the world does not agree with you, you may find the shares fail to meet your expectations.

6. Good businesses are dynamic.

   Good investors should recognise that companies and markets are changing all the time.

7. Following fashion is fine . . .

   . . . as long as you remember that a trend is only a trend until it stops.

8. Don't job backwards !

   The worst investment managers are those that enjoy 20:20 hindsight. Revisit your mistakes by all means, but do not live in an 'if only' world.

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