Hello Friends! Thanks so much for stopping by and visiting my blog Stock Picks Bob's Advice! As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisers prior to making any investment decisions based on information on this website.
There is no doubt that this blog and my investment strategy is a work in progress! I wanted to refine two things about dealing with stock price declines when I am down to my minimum of 5 positions that I have tried to deal with in the past as well.
First of all, when down to five positions, I shall be moving my loss tolerance up to reduce churning my own account to a (12)% loss level. This is something I have tried to adopt in the past, but completely overlooked with my recent Sysco (SYY) sale, when I sold with the usual (8)% loss limit.
Second, thinking about sizing of replacement positions, it makes sense to reduce the size of the holding. But perhaps 1/2 of the average position is a bit severe. If indeed I plan to add positions at 5/4 of the average size as the stock portfolio grows above five positions, doesn't it make more intuitive sense to be replacing these minimum positions at 4/5 of the average? Perhaps that is too 'cute' by a half, but that makes more sense to me! Anyhow, this investment approach is about finesse and not banging anyone or anything over the head with investment strategies :).
Today we are having a bit of a bounce in the market. I suspect things are oversold in here but am not convinced that we are in the beginning of any kind of sustained rally. But then again, I cannot tell you what the market will be doing this afternoon let alone next week!
It is more important to be able to select stocks that either show significant value or demonstrate strong momentum in earnings and price appreciation and then manage those positions within your portfolio with some type of coherent strategy.
Thank you for your continued visits to this blog. I am an amateur investor, but I believe that my approach may well be innovative enough to warrant consideration. Meanwhile, I shall continue to share with you my thoughts, ramblings, fears, and hopes, and my own successes and failures in dealing with this once in a lifetime bear market that rivals the worst of markets in the 20th Century.
Yours in investing,