I have tried all sorts of ways to achieve sustainable and high rates of returns in my portfolio, from investing strictly in dividend funds, to selling covered calls and everything in between. I’ve had very successful single trades, and some very painful single trades. I’ve had trades where I’ve been up massively and given all of the unrealized profit back to the market. I’ve found that every strategy either doesn’t generate returns fast enough, or is not sustainable in the long run due to the risk you have to take on. I also find that we are our own worst enemy when it comes to investing because the moment our ego enters the mix, we make decisions based on emotion and somehow that manages to completely over-ride any reason or logic.
There are obviously sound concepts and principles when it comes to investing discipline including concepts such as portfolio management and from there the sky is the limit in how analytical of an approach we each want to take in managing our portfolio (the amount of research and then keeping up to date on every stock in our portfolio, stock chart analysis, etc…). All of this stuff has its merits, but the reality is, and this also all depends on how busy each of us are, do we really have that much time to do all of this? And at the end of the day, how much does all of this actually translate into a profitable trade? Of course this is also a function of our time horizons as well, however I have found it is easy to tell myself when I’m down on a position that I’ll just hold onto it a little while longer until I break even, only to have it move further against me.
After all, the single reason that I am here is to generate steady returns and beat the market. Once a trade has run its course, I run my program to identify a new trade to add to my portfolio. I have zero affinity towards the stocks in my portfolio. They are a means to an end. I also needed an approach that doesn’t require me to trade excessively multiple times a day. I hold down a busy job so there’s no way I could manage that type of approach. The best part about my portfolio is I never worry about the impact of 1 position moving against me.
A pet peeve of mine is also when investing services send out stock recommendations. That’s all great and fine, but what if that stock doesn’t perform? It’s not like the stock investing service is putting their money on the line. Every investor then gets stuck with their decision based on how much has been allocated into the trade. The investing service is the only winner in the long run.
A second pet peeve of mine is what I call “single trade warriors” that yolo their savings into 1 position. All good if it works out, however I’m sure there are also many for who the same trade has not worked out. Your call if you’re okay putting that much risk into 1 trade, or perhaps there is no risk because the stock is supposed to rocket into the stratosphere, right? My strategy is not designed on luck. It’s easy to look back after the fact when a stock ran +50% in 1 week and say “wow, I should have bought more”, but if that same stock tanks -50% in 1 week, you never here anyone say “wow, I should have bought more!” The truth is, we don’t know what the market is going to do next.
Instead, I want to do something different. I want to share my portfolio strategy as a service, should you choose to leverage it as one component of your investing strategy. I want to offer something that is valuable and truly helpful. I don’t claim my approach is the single answer to a successful investment portfolio, and I will continue to refine and improve it over time. Tracking my performance and offering this service helps to keep me disciplined and stay the course with a sound investing approach.
I have no ego, and you will not see a list of only winning trades on my portfolio activity. I show it all. The reality is that not every trade is a winning trade. I don’t blow any smoke. The goal at the end of the day is to draw a line after all the ups and downs and to remain ahead of the market, by staying true to a disciplined portfolio management approach and trusting the strategy.
I love the stock market because I find it an ultimate test of character. The market presents us with countless opportunities and very quickly takes them away. Each of us are free to decide how we capitalize on those opportunities and concede when we are on the wrong side of a trade. I find this exhilarating!