Highly Focused

I've come to realize that my strategy with the Monster Portfolio 2011 hasn't bared much fruit for this year and I'm very disappointed in my performance.  Very boring year!  So I thought to myself "What could I do to up the ante?  Make more money that is!  I reflected on my past investments and I had a total of 18 buys and 15  sells for a total of 33 Trades that cost $231.00 which equates to 11.60% of the starting portfolio balance of $1990.97. Hmm... that $231 could have came in handy. 

What this tells me is that I was buying and selling to much.  Most importantly this tells me that I need to allow more time in between my trades to allow stock prices to come down even lower.  It appears that I had a tendency to sell and then jump right back into the market to soon!  I guess in a way I don't like to miss a single moment of an opportunity to make money.  This will definitely change leading into next year.

So for 2012 I plan to make a few changes.

1.  My goal is to cut my transaction fees by about 40% to 20 trades, which will add about $90.00 to my performance.
2. Spend more time researching stocks to increase my opportunity for higher gains.
3. Allow myself more time in between investments. 
4. Concentrate my funds in a maximum of 2 stocks at one time.  Transaction fees will eat me alive if I diversify to much.  (At least until the portfolio reaches $10,000 in value)
5.  Use technical analysis to my advantage and sell out when the charts determine a negative change in the trend.

Now you may wonder why I named the blog post highly focused.  Here is why.  I've come to the conclusion that many stocks move 10-15% a few times a year and a majority of stocks move 5% consistently throughout the year.  If I focus on the charts and buy only when the stock is in oversold status I'm extremely confident I can drastically increase my portfolio's performance.  This is exactly how successful traders make money.  They come up with a set of rules and they stick to them.  If the math is right I would only have to catch a stock move of 5% twice for the year to finish up 10%.  10% was my goal and currently I haven't reached that goal.  That is why my new strategy is to put extreme focus into 1-2 investments at a time.

This will be something new for me as I like to hold onto my investments past a 5-10% gain, but 2012 will be a learning experience!  I'm very excited to test out my new strategy and look forward to seeing a better outcome for 2012.

Clay-