Being “selective” with your stock selection doesn’t mean you’re missing out… it’s about sharpening your focus to pick the best stocks for every trade you make!One of the challenges many investors face is how to chose stocks to invest in. How do you know which stocks, or how many for that matter, you should buy at a given time? Unfortunately, there are no easy answers really… but there are some general principles that will help guide you.
They include the following thoughts:
- Limited capital should mean less stocks in your portfolio… otherwise, commissions will eat up your profits and add to your losses.
- You have too many stocks if you don’t have intimate knowledge of each one.
- Stick with liquid, high volume stocks – it’s easier to buy and sell these when you chose to.
- If possible, choose stocks from multiple sectors until you become an expert in one.
Limit your Choices…
It’s easy to become overwhelmed by the multitude of choices out there… but investing shouldn’t be complicated. I’ve chosen 5 stocks with solid fundamentals to demonstrate how the average investor can make money by simply focusing on a handful of choices. In fact, as you’ll see, even one stock is enough to make consistent returns in the long run.
To demonstrate this, I’ll be using the principles outlined in the Evening Investor Strategy. Be sure to carefully read the articles and interact with the contents as you go along. I always take the time to answer each and every question/comment left by you.
The 5 Stock Challenge…
| Stock Symbol | Date Purchased | Date Completely Sold | Purchase Price | Stop Loss #1 | Stop Loss #2 | % Gain | Running Total |
|---|---|---|---|---|---|---|---|
| AAPL | 2011/06/21 | 2011/08/04 | $319.70 | $379.74 | $379.74 | 18.8% | 18.8% |
| GMCR | 2011/06/14 | 2011/07/14 | $76.63 | $91.19 | $88.12 | 17% | 35.8% |
| XOM | 2011/09/26 | 2011/XX/XX | $70.80 | $76.90 | $74.54 | % | % |
| HANS | 2011/08/11 | 2011/08/26 | $78.44 | $83.69 | $83.49 | 6.7% | 42.5% |
| HS | 2011/08/11 | 2011/08/18 | $32.35 | $34.97 | $34.97 | 8.1% | 50.6% |
| *This table is based on trading according to the principles of the Evening Investor Strategy and is used for information purposes only. These are real examples used for illustrative purposes only. They are not designed to reflect my current holdings. These are not recommendations, nor is any information found on this site (please see disclaimer). For more information, consider the Evening Investor Strategy Articles. For real-time data, please visit the Weekly Newsletter. | |||||||
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