Jan 2, 2021

Cory Diary : Long Term Investment Results

There are few tricks when come to investment and there aren't much magical about it so far from my experience. A lot is common sense and this comes with personal experience or read up of others. Here's my result so far. The drawdown has been low. Gains have been accumulating. Portfolio size has grown many times.

Here's pointers. I think Point 8 is most important.

1. Be Risk Adverse : Position Sizing of each stocks even if average down. One way is to buy another stock of similar traits and average down by industry or different segments. There are usually bad reasons for a high yield stock else is a gem. Again sizing is important.

2. Cut Loss : Never wait for breakeven. Say one invested in stock 50k and loss 25k. A rebound happens and now loss is reduced to 15k but still deep loss. Cut loss if fundamental has change for the worst. Of-course if one is confidence that we can sell with gain and not due to false hope, it could make sense.

3. Take profit/buildup in stages : A speculative stock I may take 50% off table first. In good fundamental stock maybe 15%. There is no hard rule on % range for each stage. Some stocks may never start selling till price point hits. Same for increasing the size in an equity that we do in stages over time. 

4. Use TA for guidance : For some human behavior reasons there are tendency for stocks to move to around resistance levels. Make use of them for entry or exit. Not always.

5. FA for selection : Something to fall back on when broad market is down. You want to bet on something that will be uptrend long term while short term there are fluctuations. Management integrity is important. If we sense or find there is suspicion of potential misconduct or legality, avoid.

6. Diversification : For risk adverse, this can reduce our gains but we also cover our down sides. We can have bonds to minimize portfolio fluctuations however make sure it does what you hope too and not increase your risk. Amount allocation depends on each.

7. Peace of minds : If any position cause me to keep thinking or have sleepless night. Act on it quickly. The actions may cost but in the long run we will have healthy minds and body. And this is needed to manage our portfolio and our life.

8. Treat your portfolio as a holding company : And each stock a company in your holding. Unlike real life owner running their own company, stock investors have the flexibility to adjust the percentage of each company to manage the risk and rewards. With this mindset, is really a business of managing your holding company.

The above best describe my investment behaviors.



Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

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