Monday, June 19, 2017

Resisting My Normal Investment Strategy

I normally prefer to buy stocks of good companies that have been beaten down from their high and hold them until the stock price recovers.  However, this strategy has done very poorly for the past two years.  During this time, stocks I have purchased continued to go lower, and then didn't rebound.

So I have broadened my strategies for now.  While I continue to hold my beaten down stocks, I am now buying the stocks that have been going up, i.e. the momentum stocks.  This goes against my nature since I am buying these stocks near their highs, and expecting (hoping) them to go higher.  

For now, this additional strategy is working well.  In a little over a month, some of my buys are up
as much as 20%.   I plan to use this strategy short term and ride the rally in the momentum stocks.  I will consciously take profits on the way up, since I expect the market may correct sooner than later.

Hopefully, this strategy will yield a net gain when (not if) the market experiences a correction.

For more on Strategies and Plans, check back every Monday  for a new segment.

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

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