Happy Halloween everyone! I was out for a walk early this morning and I started having some thoughts about the role of margin in the trading account. We have successfully used margin thus far in magnifying our gains without experiencing any apparent undue risk. In addition, I have been adding to my trading portfolio and am now up to 22 positions. O.K. here is the plan. I want to get up to 25 positions in the account, which we will do as we sell off portions of stocks that have gained significantly. After that point, we will only ADD a new position when we have SOLD an old position due to an 8% loss....or other fundamental changes in the company outlook. However, I plan to continue to sell portions of holdings as they appreciate until such time as the margin has been eliminated. At that time we can consider adding additional positions over 25. In addition, an effort will be made to increase the size of new positions in terms of total dollar amount.
Does that sound like a sound strategy? If you have any comments, questions, or words of encouragement, always feel free to drop me a line at email@example.com