About Steven Dotsch


StevenHi

My name is Steven Dotsch, I am 55, married with two sons and was born in Amsterdam.

From a very young age, I learned the value of money and saving. In fact, I started saving money when I was only five, washing my father’s car. I started to invest in Dutch shares when I was fourteen.

Since then, I have invested in many different types of companies, both in The Netherlands, as well as in the United Kingdom, including:

  • large-cap companies
  • mid-cap companies
  • small cap companies
  • tiny-cap companies
  • growth companies
  • dividend companies
  • unlisted companies
  • start-up companies

Following university in Amsterdam, I pursued a career in merchant banking in The Netherlands. Since 1989, I have been living and working in London. Click here for my LinkedIn profile.

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I left the City in 1998 and since then, have been involved both as a founder as well as an early stage investor with a number of online and mobile telecoms ventures, including Ukonlineinvesting.com – a now defunct website which was aimed at longer term investors interested in making better informed investment decisions.

I don’t live forever . . .

Over the years, I haven’t been terribly impressed or satisfied with the advice received from so-called independent financial advisors, nor with the returns from the funds they suggested, nor with the returns of several private pensions I am a member of.

So I have now taken responsibility for most of my own and my family’s share portfolios and pensions and have therefore become my own ‘investment manager’. Given this, I am an avid reader of investment related books and journals honing my finance and investment skills ever further.

And since I have taken the reins of our investment and early retirement plans, I believe my wife and I are well on our way to retire richer than we thought possible – and perhaps even earlier than planned. Though as I only started to implement my own plans less than 10 years ago, it may well take a bit longer than if I had started much, much earlier.

Luckily my boys have still 50 years or so to go before the current official State Pension Age, if there is still a State Pension then. So, I am not worried at all that they will be able to retire, if they wish, much earlier and richer than I will.

So, what is my investment strategy than?

I am not allowed to give specific financial or investment advice but I would like to share the investment strategies I use, in particular at Dividend Income Investor.com

Of course to put all this in some perspective, it’s worth knowing my ‘philosophy’ regarding stocks and shares investment in general.

Controlling risk, if possible

I do not believe that using a ‘risk-free’ approach of putting all my surplus money into a savings account will secure me a comfortable retirement. I for one, have never come across a savings account millionaire.

I believe that in order to secure a comfortable retirement, I will need to take some ‘risk’. And as my kids have 30 or 40 years to go before early retirement, I believe they can afford to take a higher ‘risk’.

No exotic trading strategies, at least not anymore for me

I don’t regard the stock market, forex market or any other market as some kind of cash machine that allows me to create automatic long-term wealth.

While for some people it may work, I am not particularly interested in spread betting, CFD trading and other similar options – all, in my view, higher risk trading strategies (and I like to sleep easy at night!)

Experience has taught me that I have much more success as a longer-term investor in stock and shares, than as a short-term trader of assets. I regard myself as a long-term investor not a day trader. However, I am unlikely to buy and hold shares forever. In particular, if their share prices are historically overvalued.

The market is always right . . . Not

In terms of market cycles, I never believe that there are ‘special times’. I realise that all times are different. Of course, history may repeat itself in some form or other, but in most cases the trigger and/or the outcome is likely to be somewhat different.

I am a firm believer in long-term trends and cycles – not only economic or financial but also demographic.

Cash-rich, asset-poor, or vice versa – it all depends

I do not mind periods when I am fully or partially invested in cash or cash equivalent, commercial property, gold or other commodities, or solely invested in stocks and shares.

I believe each market has its ‘time’ at some stage. I also realise that being in any market at the wrong time can be lethal and I try to act accordingly. I try to rotate types of investments, sectors and geographies.

All types of assets can and will go up, but also down!

I realise that prices of any asset can go ‘up’, but are also likely to come ‘down’ again. I intend to sell when the price of an asset is historically overvalued. I intend to earn a lot of money if I am able to buy an asset when it’s historically undervalued.

As I am starting to build the Dividend Income Portfolio I prefer share prices to be much ‘lower’ and dividend yields ‘higher’, as I am currently cash rich.

Only interested in real value, i.e. dirt cheap assets

I do not like buying shares (or any other asset) when real value is hard to find and when dividend yields are (extremely) low. Currently, I am far less concerned about the market value of my share portfolio than I am about the sustainability of my dividends.

Of course all in a tax-free environment

Where possible, I concentrate our portfolios in tax-free environments such as a stock and shares Individual Savings Accounts (ISA) and Self Invested Personal Pensions (SIPP).

At the end, we just get paid, right?

I see investing in stocks and shares very much as a way of other people – companies – paying me a relatively secure future cash stream – dividends and capital gain.

Currently, I primarily invest in stocks and shares to generate an income, preferably a high and increasing one, rather than securing a capital gain.

And that sums it very much up.

Please do not hesitate to contact me if I can be of assistance.

Many thanks

Steven Dotsch
Managing editor
Dividend Income Investor.com

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