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How I invest: aspiring to make a living from buying and selling stocks
There are many profound changes the world is currently going through. Digitalisation, growing artificial intelligence and virtual reality adoption, and shifting to renewable energy and a low carbon future are just a few of the trends which will see our world change dramatically in the coming years.
Seeing the growth opportunities on offer, Swindon-based Damian has been tapping into these themes to build up his investment portfolio. He plans to continue doing so with the aim of being able to retire from the regular 9-5 working hours in the next five years and look after his investments full-time.
Damian has been investing for several years and has built up a portfolio of around £235,000 across his SIPP, Stocks and Shares ISA, Lifetime ISA and other investment accounts. He plans to use his Lifetime ISA investments to help fund a property purchase if he sees an ‘excellent opportunity’.
EARNING MONEY TO INVEST
After graduating with a degree in civil engineering, Damian got into investing after moving to France to work as a design engineer on a high-speed railway project, which he says allowed him to save around £1,000 each month.
‘After my working hours, besides sightseeing beautiful places in Paris and Lyon, I was looking for options for what to do with my hard-earned money,’ he says. ‘Instead of putting the money into savings accounts, I decided to make money work for me, and I started learning about investing.
‘I enjoyed reading about it, discovering the reasons for stock price movements and looking at the macroeconomic aspects of investing.’
At first Damian was making ‘many mistakes’, he concedes, giving the examples of selling a company’s shares as soon as its price went up 5% or replacing companies in his portfolio often. ‘I did not have patience,’ he adds.
Thanks to investing, Damian says he has learned to take risks, such as moving to the UK and deciding to give up his career in engineering to work in a completely different industry.
The main part of his portfolio includes American technology companies as well as technology stocks from emerging markets, namely China and his native Poland.
‘My research and my experience in investing taught me to discover great companies with perspectives and stick to them,’ he explains.
‘And like Warren Buffett, I like to invest in companies whose products I use daily. I work using my Apple devices, and I use platforms of Alphabet (Google) and Facebook for the marketing of my online business. I do not watch TV, but YouTube, which is another service of Alphabet, is my primary source of information. It all shows how significant effect these companies have on my life.’
GREATER RETURNS THAN HIS SALARY
Damian claims the last one and a half years proved that he can generate more money from his investments than his regular job, ‘thanks to a good selection of companies’.
He highlights CD Projekt RED, a Polish video game developer, as his best investment. ‘What is funny, my best and my worst investment decision are related to this company,’ he says, having bought his first shares of CD Projekt in November 2013 and selling them in April 2017.
The investment brought him a 385% return in less than three and a half years, but Damian says his worst investment decision was to sell the shares too early.
Since he sold out, CD Projekt’s share price has skyrocketed an additional 210% in slightly more than two years. The company is now back in his portfolio.
‘Now my approach is different. I buy high growth companies, and I do not sell until something fundamentally changes within their business. I do not try to time the market.’
Another ‘excellent decision’ he says, is investing in Tesla, having purchased shares in the company when the market suffered a sell-off earlier this year. Since hitting a year-to-date low of $361.22 on 18 March, the electric vehicle maker’s share price has soared to around $2,238.
PREFERENCE FOR STOCKS
Damian does not own any UK stocks but says this may change if he identifies a company which meets his criteria. He also doesn’t invest in funds or exchange-traded funds (ETFs) because he prefers ‘concentration on the best companies only’ but believes funds and ETFs can be a good option for beginner investors.
While the market volatility from the coronavirus pandemic has played havoc with people’s portfolios, Damian says the current situation has given him conviction in his investment approach and choices.
‘My investment thesis about the transition to the digital economy has materialised,’ he says. ‘My stock market portfolio is at an all-time high. My technology stocks recovered their losses quickly, and I hope that investors have realised that if the second wave of the lockdown of the economies happens, the technology stocks should not have a reason to drop.’
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DISCLAIMER: Please note, we do not provide financial advice in case study articles and we are unable to comment on the suitability of the subject’s investments. Individuals who are unsure about the suitability of investments should consult a suitably qualified financial adviser. Past performance is not a guide to future performance and some investments need to be held for the long term.