2006-05-09
Intro to Stock Picks
Look at this, posts two days in a row. Is this a sign of the apocalypse?
I mentioned yesterday that in the stock market, I am letting my winners run. I thought I would start a series of posts on what I am doing in my account and why. I am in no way suggesting that all (or even any) of the investments that I am making are appropriate for anyone who is reading this diary, but I am very passionate about the stock market and just wanted to share my enthusiasm with anyone willing to read about it.
For a refresher on my background, I am 33 years old, married with three young kids. I am definitely in the asset accumulation phase of my life, i.e. trying to save not trying to live off my savings. Since I am young and have a long savings horizon, I have built my retirement account to be aggressive. In fact, it is far too aggressive for what I would ever recommend to anyone else (do as I say, not as I do). Nevertheless, I have had spectacular gains over the last few years that translate into real money, so I am going to stick with my aggressive stand for now.
If you are reading this and you are not saving for your old age, then stop reading right now and open a retirement account at Vanguard or Fidelity. If you know nothing about investing or are intimidated, then follow Scott Burns Couch Potato Portfolio. It is simple and easy and should give you reasonable returns. The other suggestion that I would make is to join or start an investment club. It has really helped my wife understand how the stock market works and she and her friends have a lot of fun with it.
Over the last couple of years, I have allocated my money into three areas of roughly equal weight. 1/3 of my money has been invested in foreign (including emerging market) stocks, 1/3 has been invested in natural resource and commodity stocks and mutual funds, and the last third has been invested in U.S. domestic equity mutual funds. The preponderance of my gains in the portfolio have come from the foreign and natural resource allocations, though the domestic has done pretty well.
I am currently rethinking my specific holdings in each of the three segments and will be talking over the next couple of weeks about what I am thinking about doing with my investments. Over the last couple of months, I have been actively selling my domestic mutual funds and reallocating the money into individual stocks and options plays that I think have superior return potential given where I think the economy and broader markets are heading. I will do a quick write-up on each of these companies and talk about what I like about them and why I think they have high return potential. Besides sex, there are few things that I find more enjoyable than researching stocks ideas. I guess if I cannot be a pimp, my job is the next best thing.
-- rockabillie at 9:46 a.m.