Nick Train: Frequent trading and overdiversification lead to poor investment strategies

QuotedData weekly news update

clock • 2 min read

Finsbury Growth & Income trust manager Nick Train has criticised professional fund managers and amateur investors for often chasing the latest “hot idea”, showing no patience for stock growth.

Speaking in a weekly webinar held by QuotedData, Train argued that portfolios "never really stay stable long enough to get the benefit of a good investment", as a result of trading too frequently.  He noted that some investors tend to overdiversify their portfolios, which can often result in unintended changes in holdings ratio. "Suddenly [you] look up and realise, ‘I thought I was running a concentrated portfolio, but actually I have got 70% stocks now and I do not really know why I own half of them'," Train stated. "We have disciplined ourselves to try and avoid those types of mista...

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