Wednesday, November 14, 2007

Sticking To My Stock Investment Strategies

The August, 2007 correction and the volatility of early November, 2007 have tested my conviction in the investment strategies that I use. I am pleased to say that I haven't wavered yet and am staying with the strategies. Here are the strategies that I am using:

Diversified equity portfolio (domestic and foreign) with a bias toward large cap growth. This is the majority of my stock portfolio and it is managed by a professional advisor on an asset based fee. I have hired a manager because I believe it is important to be invested in the stock market AND I know the manager will keep me invested during the volatile times when I might cash out. My personal inclination is to trade and time the market, which is not necessarily a good strategy as I wrote in Afraid Of Investing In The Stock Market?.

Even though it has been painful to see the declines of the past few days, I have not withdrawn any funds from this segment.

Modified Unemotional Investor Growth portfolio. For a small part of my portfolio, I use a modified Unemotional Investor Growth system to buy and sell stocks. Since I starting using this system in late 2004, I have had positive returns with each portfolio. The most recent results were shared in the 11/12/07 Stock Purchase Update.

One selection from the 5/28/07 buy list, Potash (POT) has not received a sell signal and I continue to hold this position. Originally, I delayed purchasing the 10/15/07 updated buy list. Yesterday, I decided to buy Southern Copper (PCU) and CNH Global NV (CNH) because they were below the price on 10/15/07, when I thought they were a little over priced.

Core Long Term Stock Holdings. For another small part of my portfolio, I have purchased three stocks that I believe will have large returns in the long term, Google, Amazon and General Electric. Even though Google and Amazon have recently declined 20%, I am still holding on to these stocks.

Foreign ETFs is the area where I don't have a good buy and sell strategy yet. I purchased the China ETF (FXI) and the Brazil ETF (EWZ) in early September, 2007 and sold out in October, 2007 because both had a 25+% gain in six weeks. Since FXI has declined below my October sell price, I have repurchased some shares, but I have not repurchased any EWZ yet.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

Photo Credit:, Derek Lilly

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

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