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Nick Train's three rules of thumb

Nick Train outlines the principles that drive his investing decisions
October 22, 2020
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Many investment professionals are in agreement that a good way to reduce risk is to diversify, and the fewer investments you have the greater the concentration risk. But Nick Train, manager of funds including Finsbury Growth & Income Trust (FGT) and LF Lindsell Train UK Equity (GB00BJFLM156), maintains a long-held belief that concentration can actually reduce risk.

“We’ve always been enormously influenced by Warren Buffett and Charles Munger,” says Mr Train. “And they’ve always argued for having a few eggs in your basket and watching them very closely. Owning a few things in which you’re confident in the resilience is less risky than owning a wider range of assets or securities where you have much lower levels of confidence – both in your understanding of the assets and their sustainability.

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