DIY Investor Diary: 10 private investors share their top tips

Last summer we started a new series called DIY Investor Diary, which showcases how private investors put together their own portfolios.

In each article we outline the investment strategy, the investments favoured, and share top tips on how to become a more successful investor.

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The idea is to try and provide inspiration to other investors, and we would love to hear from more people who would like to be involved. We do not require those featured to be named. If you are interested, please email Kyle Caldwell, our funds and investment education editor, at: kyle.caldwell@ii.co.uk

This article collates comments from investors who have appeared in the series so far, highlighting their top tips or investment lessons.

1) DIY Investor Diary: how I apply Warren Buffett tips to fund investing

The first investor to appear in the series explained how he draws inspiration from legendary investor Warren Buffett. This led him to invest in Fundsmith Equity at launch in 2010.

He said that the fund, managed by Terry Smith, “builds on Buffett’s principles, and the way he invests resonates with what I believe”.

His top tip is: the earlier you invest, the better. This is so that you can benefit from the power of compound interest, achieved through investing for the long term.

2) DIY Investor Diary: how I invest to preserve wealth

The second investor explained that he spreads risk by owning a mix of active and passive strategies (index funds). However, he said that he is increasingly favouring the latter approach for its simplicity in providing the return of a stock market minus the fees levied, which tend to be low.  

Key lessons learnt over the years are to avoid panic-selling, as the stock market recovers its poise over time, and that timing the market is virtually impossible. 

He also stressed the importance of fund charges, which are one of the only things DIY investors have control over. Fees are central to the active vs passive debate, and, as our investor says, it is a question of whether “active funds reward [you] for the additional risk”.

3) DIY Investor Diary: why investment trusts form bedrock of my portfolio

Our next investor explained how he's taking advantage of the investment trust structure to supplement his retirement. He takes around £10,000 a year from his investments – held in a SIPP and an ISA – with investment trusts forming the bedrock of his portfolio.

The investor said that the difficulty of knowing when, or whether, to sell had been his “biggest weakness”.

His top tips for other DIY investors included thinking long term, being patient, and watching out for fund charges. 

4) DIY Investor Diary: why this is the only fund in my SIPP

Next was an investor who has just one fund in his SIPP, Vanguard LifeStrategy 100% Equity. This passive fund provides diversified exposure to global stock markets.

One of the main reasons why the investor opted for just one passive fund was “to keep things simple”.

“It is a very straightforward fund, so I don’t have to think about it much. If I had chosen an active fund, or a couple of them, I would need to monitor their performance more closely. I want to enjoy my retirement and focus on that rather than chopping and changing fund holdings.”

His top tip for fellow investors, and in particular for those who are younger, is to “start as early as possible” to benefit from the wonder of compound interest.

Another tip is to increase monthly investments when a pay rise occurs to “help keep pace with inflation”.

5) DIY Investor Diary: how my ISA and SIPP are invested differently

Our next investor, in his early 30s, manages his ISA and SIPP in different ways due to the rules around when money can be accessed.

Investments in his ISA are more conservative, while his SIPP is more adventurous. This is because he intends to use the ISA for short-term goals, while a SIPP cannot be accessed until the age of 55, rising to 57 from 2028.

His top tip for fellow investors is “not to become too emotionally tied to a holding”.

He said: “It is important to continually reassess your thoughts, thesis and approach. It is always worth challenging your own perspective. And when things change, don’t be afraid to cut losses.”

6) DIY Investor Diary: the four funds I picked to start my ISA

Next, we spoke to an investor in his mid-20s, who opened his first stocks and shares ISA in the summer of 2022. The investor explained that central to his first four fund choices was ensuring that he had plenty of diversification to spread risk.

By investing early, he's in a great position to reap the rewards of compounding.

“The way I see it is that investing as much as I can at a young age is paying my future self. I am investing early in order to be able to retire comfortably.”

7) DIY Investor Diary: this rule takes the emotion out of investment decisions

One investment pitfall is becoming too emotionally attached to a share, fund or investment trust whether it is a winner or a loser.

The next investor explains how he seeks to take the emotion out of investing by enforcing a strict discipline of applying a “stop loss” of 15%. He is a very active trader and a follower of the momentum style of investing.

Key lessons learnt over the years include being both patient and humble. “Don’t get cocky just because your investments seem to be flourishing, and don’t despair if they are suffering. Nothing lasts forever. Most investments enjoy a hot spell, but they can also endure lean times.”

8) DIY Investor Diary: becoming an ISA millionaire was like completing a marathon

Becoming an ISA millionaire involves time, patience and shrewd investment choices. We spoke to an investor who achieved the feat towards the end of last year. He says that the achievement, after 30 years of investing in an ISA and Personal Equity Plans (the predecessor to ISAs), was “like running and completing a marathon”. ISAs were launched 25 years ago.

He started investing in individual shares and then investment trusts. His portfolio switched over 20 years ago to focus predominately on funds that passively track the ups and downs of a particular index.

His reasons for favouring passive over active funds is based on data and wanting to make his own asset allocation decisions.

One top tip for fellow investors includes “ignoring the noise of the markets”. He adds: “Invest in what you believe in. Keep an investment log and write down your reasons for investing. You can then look back on it and learn.”

9) DIY Investor Diary: how I’m aiming for £10,000 annual income from my ISA

For many investors thinking about using ISAs or SIPPs to help fund retirement, the aim will be to secure a reliable and regular income from their investments without inflicting too much harm on the capital.

This investor aims to generate £10,000 of income from his ISA to help fund retirement, including trips abroad to watch cricket. His ISA has 11 holdings made up of 10 investment trusts and one fund. The investment trusts span a range of countries, sectors and asset classes to provide diversification, which helps to reduce risk.

His top tips for fellow investors include doing your research, investing monthly and being patient.

He says: “Drip-feeding on a monthly basis means you haven’t had the money available to spend elsewhere, which means you learn to live without it. And if you do it for long enough, you’ll see the money grow.”

10) DIY Investor Diary: why I’m ‘all in’ on this volatile gilt

Finally, our latest piece in the series showcases an investor who has put the lion’s share – £135,000 – of his portfolio outside his pension into a UK government bond, known as a gilt.  

In the article, he explains why he sees this as “a tremendous one-off opportunity to benefit from a good yield and a significant capital gain”. He adds: “These opportunities don’t arrive very often.”