Lessons from 25 years supporting retail investors

To mark the 25^th anniversary of DIY investment platform Stock Doctor, Lincoln Indicators Co-Founder and Managing Director, Tim Lincoln, has shared the three key lessons that he has learned over the past 25 years about business, the investment industry, and investors.

Stock Doctor is an online cloud-based platform that gives retail investors access to quantitative research that identifies both stocks at risk of corporate failure and ‘Star Stocks’ – the stocks Lincoln Indicators proprietary data-driven approach identifies as having strong financial health, that may be suited to meeting an investors long-term growth or income objectives.

Since inception, Stock Doctor Star Growth Stocks portfolio has delivered 17.25% over its 25-year journey to 28 Feb 2022. Its Star Income Stocks have delivered a total return of 14.04%, including a yield of 5.85%, since inception in 2012 – delivering a much stronger income return than traditional income investments such as term deposits or bonds.

Mr Lincoln said the market had gone through many ups and downs over the past quarter of a century, but some lessons hold true across market cycles.

Lesson one he says, is that mum and dad investors are not mugs.

“They have good BS detectors and want to make investment decisions based on facts and data, not opinions or hype,” Mr Lincoln said.

Lesson two, according to Mr Lincoln, is that the customer is king, but the financial services sector has neglected them for too long.

“Whether it’s the recent Royal Commission or the ongoing legislative reform and regulatory change across financial services – it’s clear that the sector for many years forgot that the customer comes first,” he said.

And lesson three is that while it is good, and necessary, to adapt over time, some things should never change.

“While today more and more people are investing – including waves of younger investors – the fundamentals of our investment approach remain the same,” Mr Lincoln said.

“We’ve expanded our offering to include managed funds with the same quantitative model for stock selection and continuously enhanced the Stock Doctor platform experience, but our investment philosophy – investing in the numbers, not hype or opinions – has not. And this will never, change,” Mr Lincoln said.

It’s an approach that resonates especially strongly with long term investors, with some 45% of Stock Doctor subscribers staying with the business for 10 years or more.

Moving forward, the firm will continue to support retail investors wanting to do-it-themselves with Stock Doctor, but it has also built up a burgeoning managed funds business for clients who prefer to have their funds professionally managed, with over $850 million funds under management.

“As we begin 2022 – Omicron, inflation, the Russia-Ukraine crisis and more unknowns – there’s more noise and volatility around the markets than ever before. Objective analysis and facts have never been more important for investors looking to navigate the share market through this turbulent time,” Mr Lincoln said.

“There are some 2,000 stocks on the ASX and most investors do not have the time or technical expertise to perform deep financial analysis and due diligence across these companies. Our proprietary research methodology analyses the financial statements of every company on the ASX within 48 hours of the results being released. It helps investors identify financial healthy companies versus those at risk quickly and easily.

“It is also during this time of volatility, that investors with the right tools armed with trusted stock research, can identify opportunities.”

“Ensuring thorough analysis that cuts through the hype and all the market noise is critical to share market success, and we help investors do just that.”