No, the UK stock market isn’t open today – it’s a bank holiday for the coronation of King Charles III. But days like today can be a chance to do some of the most important investing work.
According to Warren Buffett, the most important investment that someone can make is in themselves. With that in mind, here are three investing ideas for when the stock market is closed.
Research
Buffett often emphasises the importance of investors staying within their circle of competence. Expanding my own circle is one way to invest in myself with the stock market closed.
There are a lot of good ways of doing this, but one of the best is researching stocks I own. That can involve reading reports, watching news, or listening to what others think.
This is helpful in a couple of ways. First, it allows me to keep up to date with how the businesses I own shares in are doing and whether my investments are turning out the way I anticipated.
On top of this, though, it also helps me to understand other companies that I might not have thought about. These might be stocks in the same sector or ones with a similar business model.
For example, I own shares in Forterra – a brick manufacturer. Reading the company’s views on the outlook for UK housing can help me think about stocks like Rightmove and Persimmon.
Researching and learning about stocks I own or intend to buy helps me make better decisions. And that’s a great way to invest in myself on a bank holiday with the stock market closed.
Making money
Another way of investing in myself is doing something to earn extra income. In many ways, figuring out how to generate cash is even more important than working out what to invest in.
Take Berkshire Hathaway’s recent investment in Japanese trading houses as an example. A lot of attention is getting paid to what Buffett bought, but the real key is where the money came from.
According to its annual report, Berkshire has issued bonds in Japanese yen at an average interest rate of 0.7%. Investing that at higher rates of return allows the company to make money.
Shares in the Japanese trading houses currently have dividend yields between 2.8% and 5.5%. So Berkshire is paying interest at 0.7% and receiving dividends at much higher rates.
Having a source of low-cost capital allows Buffett to make investments that generate more and more cash. And that’s something that I can work on even with the markets closed.
I can’t issue bonds in Japanese yen at 0.7%. But I can figure out how to generate extra cash to invest and that’s something I can do even when the stock market isn’t open.
Investing when the stock market is closed
Warren Buffett has made a fortune by seizing opportunities when they come around. And I think a bank holiday is a great chance to invest in myself in order to do just that.
Widening my circle of competence should help me spot good opportunities. And building extra income streams should put me in a position to take them when the stock market reopens.
