It’s always a good idea to adjust your investment strategies over time. Those of you who have been following me closely know that I’ve had a real “knack” over the past 7 months or so for picking losing stocks. However, I refuse to let them go. And I continue buying into them because the buy signals keep getting stronger and stronger with every drop, and they became more and more attractive, with respect to all of the indicators I use to make investment decisions. And, as usual, I refuse to sell on “buy” signals and frequently do the opposite. I wrote about this back in March and didn’t realize at the time that this would become a multi-part series but I suppose that is how things are playing out. Because, here it is a month and a half later and I am still fighting the downs and ups and downs of what has been a highly volatile stock market this year (most of which have been downs).
The fight continues but it appears some of the strategies I’m using are actually helping. I’m still presently a high risk investor (much to my dismay), but not nearly as extreme as I was back in March. As a result of all the buying I have done, I moved from being a low risk investor to a high risk investor. The low point for me so far this year was 14 March when I was 140% invested (yes – I was using margin) and down 30.34% for 2022 (and down 34% since September/October 2021). Presently, I am 92% invested and down 20.65% for 2022 (and down 24% since September/October 2021). Although, the present 21% loss I am experiencing is substantial, it comes as each of the major indexes have either retested (in the case of the S&P 500 and the NASDAQ) or closed below their March lows (in the case of the Russell 2000 index). The last time the major indexes experienced these lows (back in March) my losses were far greater than they are right now. So, things are improving and moving in a positive direction.
I haven’t been overly concerned with having a negative return for 2022 because all of the major stock market indexes are getting hammered this year so far (the recent lows being a 13% loss for the S&P 500 Index, a 20% loss for the NASDAQ, and a 16% loss for the Russell 2000) and even the ultimate, safe haven, low risk investment (the bond market) has gotten hammered with a highly unusual 8% loss. Eventually, the market indexes will recover and so will most of the stocks I’m holding. I would be more concerned if I was experiencing substantial losses while the major market indexes were showing significant gains.
You can read about the buy and sell strategies I’ve been using in Part One of this series. I am using the same strategies throughout the rises and falls in stock prices no matter what the cycles might turn out to be. If the stocks are dropping, I’m buying more. And if they are rising, I’m selling more. I continue the process until I get to the point where I am either “all in” (including margin – at least for now) or exit the positions completely.
I’m happy I’ve been modifying my investment strategies. It really seems to be paying off. This is something you always want to get into the practice of doing. Observe what happens and make adjustments to your investment strategies so that you can work towards improving your investment performance over time in accordance with your risk profile. I happen to presently be a low risk investor (although right now I am temporarily high risk) but many of you will probably be higher risk investors. So, your investment strategies will probably be a bit more aggressive than mine.
You can be a very successful investor if you effectively use all of the tools and techniques available to maximize your investment returns. It’s been an interesting investing experiment I’ve been running so far for 2022. We’ll see how things go.
You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/)
Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/
I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow.
Happy investing everyone!
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