This article informs some of the considerations a solid investor evaluates when managing risk and making adjustments in investment strategies over time. In this particular case, this involves managing investment risk for securities that significantly decline in value. For those of you who have been following my stock market investing activities you know that I have been actively buying shares of an oil company called Seadrill (SDRL) over the past several weeks. The last time I bought shares was on 15 Dec. Well, since then the stock has spiked to about a 17% gain overall over the past couple of days which is about a 2.5 year gain on average. So, I decided to sell the shares I recently bought two days ago. The reason why I decided to do this was, because this will allow me to use this cash to buy additional shares should the stock reverse again and begin to decline further. Because in the world of investing nothing is ever certain. This is why developing and refining strategies “up front” is so critical to success. You want to be a disciplined investor. Not an emotional one.

To put things into perspective, regarding the SDRL stock, at the recent bottom a couple of days ago, this stock had lost about 40% since I started buying it, but my overall loss due to price averaging into it was about 12% at that point in time (the stock has dropped about 74% since the end of June). Years ago, as a young investor, I might have invested my entire investment account at the initial buy point, instead of price averaging into it over time, but have since learned that the key to investing success involves being prepared in case things do not turn out the way you might initially expect so that you can capitalize either way that things might go. This strategy has allowed me transform an initial 40% loss into about a 5% gain overall, as of today, with additional gains likely to come. Often lagging stocks become leading stocks, over time, and so long as the risk-reward indicators that I generally look at remain favorable in nature I will continue holding shares of the stock. Either way things go in the future, however, I have a plan. If SDRL continues rising significantly I’ll sell more shares to continue price averaging out of it, but if it falls significantly then I’ll look to buy more shares. Part of being a solid investor is recognizing opportunities when you see them and promptly capitalizing on them when the risk-reward of securities you are tracking become highly favorable (as a buyer) or highly unfavorable (as a potential seller or short seller) in nature.

In summary, developing and refining investment strategies up front can transform you from being an emotional investor into a disciplined one who realizes steady and consistent success over time. I have solid risk management strategies that I have developed for various investment types and investing environments, for the clients that I work with, so feel free to contact me if you’d like to find out more.

This article informs some of the considerations a solid investor evaluates when managing risk and making adjustments in investment strategies over time. Part of being a solid investor involves effectively managing risk and taking actions to exit investments which become unfavorable in nature (as a seller) and capitalizing on new investment opportunities which become favorable in nature (as a buyer). By periodically rotating out of investments which become less favorable and into investment opportunities which become more favorable in nature you will realize consistent investment success over time. You won’t make winning investments all of the time, but the point is to use strategies and techniques which allow you to make winning investments for much of the time. I can help in these regards

Please contact me if you need any assistance with any of your financial planning, management, and/or investing needs as this is one of the areas that I actively perform life coaching and training in. Also feel free to click on “Financial Planning, Management, and Investing Related Posts” to the sidebar on the right or below (depending upon which device you are using to view this article) for helpful tips on how to become a solid investor to include some of the topics that I have alluded to in this article such as price averaging and risk management. These articles provide helpful tips on how to become a solid investor so read through some of these if you think they might be helpful to you. In addition, in case some of you would like to follow along, here is where I regularly post about my stock market activities. So feel free to visit this page if you would like to follow what I’m doing in the stock market at any given time.

For those that did not know, I generally perform life coaching and training services in two primary areas: 1) Personal and Professional Improvement, Development, and Growth, and 2) Financial Planning, Management, and Investing. As such, I generally alternate the articles that I write via my blogs between these two topic areas. This particular article is associated with the second area that I life coach in. So if you do not have much interest in financial planning, management, and investing, rest assured that one of the next articles that I write will be in the area that you might have greater interest in; the personal and professional improvement, development, and growth area. You can also follow me on Twitter if you like at: Joseph M Brennan Jr @ BrighterDaysLC

Joseph M. Brennan Jr.
CEO/Life Coach – Brighter Days Life Coaching
“Your Brighter Days Life Coach for Life”

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