Archive Monthly Archives:
Using watch list holds
Investor watch lists and toe holds can accomplish much. Watch lists or model portfolios enable risk free monitoring but for best performance I use toe holds. Putting skin in the game serves to focus my attention.
Read MorePortfolio measurements size positions
Portfolio portion measurements or the percentage dedicated to each investment and the effect that inevitable changes have on those portions needs attention.
Read MoreCosts drive position size
Costs drive investor position sizes. Minimum positions for affordable costs keep costs per share low. Investors know minimum position sizes for affordable costs. This second sizing factor gets the transaction costs right. This effectively puts a financial barrier or threshold in place for owning an individual share position.
Read MoreResearch confirms investment counts matter
Investing academics and holding counts in multiple studies conclude 16 stocks are the ideal number, with 5% to 7% of a portfolio held in each position. The range is surprisingly narrow. Most suggest between 15 and 20 stocks as the best number. You and your top research assistant, Google, can find endless numbers of studies.
Read MoreMoney making stock issues
Considering how many stocks to hold ranges between 5 to 30 stocks with an exception. There are 5 Factors to consider: Number of holdings, Size of positions, Diversification, Risk and Psychology. This post is part 1 of the 6 part White Top View series, Introductory Portfolio Management – Counts and Sizes.
Read MoreCheck market direction trends
Part 4 of 4: White Top View, Market Direction series. Yesterday we began our discussion of five key stock market direction pointers. Today we conclude that discussion. Digging deeper into economic data can refine the results but there is little practical reason to do so. The basic approach works well. Trending up produces a rising stock market; tending down produces a falling stock market. When the trend is up, confidently take stock positions. Go long by buying shares. Purchase stocks that benefit most from economic growth. If the trend is down, get out of the market by selling stock positions and going to cash. Alternately in a down market, sell short to profit from falling stock prices.
Read More5 Star market compass
Part 3 of 4: White Top View, Market Direction series. Get a fast read on the most likely stock market direction. Some easy observations and a few simple questions can give you a reliable and useful indication of stock market direction. Among your contacts, neighbors, friends and family, observe and ask questions on the five following points: Careers advancing or are jobs being lost? People concerned or confident about employment? New cars being bought or old cars repaired? Houses being purchased and renovations made? More people upsizing or downsizing? You can spend weeks delving deeply into economic reports or listening to the droning and arguing of pundits, experts and politicians. Or use this simple alternative approach which works very well.
Read MoreInvestors hold patient cash
Investors hold patient cash, and that willingness to patiently accumulate cash distinguishes the winning investors who outperform indexes. However, as soon as an opportunity presents itself, they move fast! But when Pam was ready to invest the savings she had patiently accumulated, she needed guidance. She wanted to know how to quickly find the best investments so she would take advantage of investment opportunities. On the other hand, Pam was concerned that buying before doing a thorough research job would hurt her investment performance and portfolio value. She needed to learn how investors deal with uncertainty and misinformation and avoid following the herd while using patience and doing good research.
Read MoreLook forward with data
Part 2 of 4: White Top View, Market Direction series. Investors use data to look forward, typically about 6 months. While not strictly a prediction, it expresses near term expectations of economic direction. That so called predictive function can strongly suggest the most probable future. That can tip us off to both opportunity or danger in the markets. We can use it as either or both a big money-maker or capital saver! The desire to know the future direction motivates much research. Seeking, compiling, identifying and reporting indicators keeps many people busy.
Read MoreFind money making stocks
Win by picking winners!
Look among the stock market leaders for the winners. That is how to find stocks that consistently make you money. Stocks that lead the charge upward in bull markets consistently produce profits for shareholders. Go there and pick among the leaders to build a portfolio of winners.