O.K....let me try and answer this question the best I can.
My goal in writing this blog is not about writing about stocks that anyone needs to 'chase'. I do start with stocks that are moving higher that particular day. It is my belief that identifying stocks moving higher that also have strong underlying fundamentals may also represent equities that are likely to move higher in the future as well.
Time will tell if that strategy will be successful. It appears to be working for me.
Regarding your losing a lot of money in the market, that is really a terrible thing. But perhaps you are not alone as this market has been merciless in destroying the value of equity after equity. For example, General Motors (GM) is now sitting at a 54 year low. ouch.
My strategy has been and continues to be to attempt to build a portfolio of stocks that have the brightest prospects. I sell my stocks quickly on declines to avoid developing large losses. I sell my holdings partially as they appreciate to targeted levels. Generally I sell 1/7th of my holdings if they reach levels of 30%, 60%, 90%, 120%...etc. appreciation levels. Similarly, I sell my entire position if the stock should drop 8% after an initial purchase, break-even--if I have sold once at a 30% gain, or at 1/2 of the highest appreciation level of sale. In other words, I sell an entire position if the stock should dip to a 30% appreciation level after having already had a partial sale at a 60% appreciation target.
Sounds a bit complicated? It is. But it is keeping me afloat.
In addition, I try to respond to market influences by monitoring the actions of my own portfolio. That is, if my maximum holdings are 20 positions, my minimum is 1/2 of 1/2 of that or 5 positions. "Neutral" would be at 10 positions.
Starting out I would place 10 positions into equities and 50% of my account would be in cash.
If a stock got sold at a gain by appreciating I would add a position. If sold on the downside, I 'sit on my hands' and continue to add to cash. I replace positions if I sell a holding when I am at my minimum of 5 positions. Likewise, I sit on my hands if at my maximum and have a buy position by selling a portion of a holding that has appreciated.
Complicated? You bet. But I am doing it and it appears to work. I am currently at 5 positions.
I write up lots of stocks. Only a few I own. You can monitor my own activity by reading my blog. All of my entries are there going back to 2003. Read a few entries and you will start understanding my investment philosophy and my actual trades.
In addition, in the interest of transparency, I have my portfolio posted over at
Covestor. My stock picks are otherwise monitored over at
SocialPicks. And if you would like to hear me discuss my strategy and some of the stocks I write about, download some mp3's by going over to my
Podcast Page.
Whenever I buy or sell, this is recorded over at Covestor and I try to write up an entry ASAP entitled "trading transparency".
I do not tell people when they should sell stocks. I do not write up when a "buy" becomes a "sell". I leave that for my readers to determine. Setting up tight sale points at the time of purchase, identifying quality companies to invest in, managing my portfolio in response to market actions, these are all things I advocate and would believe they would work for many other people as well.
Please let me know if this has helped you understand my blog and my approach. So many people have lost so much in this bear market. You are not alone in this regard. But if you can always manage to learn from your experiences, if you can avoid repeating the same mistakes over and over again, and if you can develop a strategy that works for you in the future, it will all be worthwhile.
I hope that I can add to your understanding of how an amateur can approach investing. That is and has always been my goal. I am not even sure that I shall be successful myself.
If you have any other comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.
Yours in investing,
Bob
One of my favorite parts of writing a blog is to receive email from readers with questions of their own. I am not a professional adviser so I am not qualified to give individual advice on anyone's particular situation. For that I would suggest seeking the advice of a professional.