Monday, July 11

My Frugal Miser - Investment Performance Update

From time to time I post an update about how my stock market investments are performing. I am a value investor, and I believe that most people can outperform the market by following a few very simple rules. My investing philosophy is simple:
  • Minimize trading costs and taxes by sticking to a "buy and hold" program.
  • Buy when everyone else is scared to buy.
  • Focus on 1) smaller companies that are growing at a reasonable rate.
  • Focus on 2) companies whose stocks have declined due to what I think are temporary problems.
  • Preference goes to dividend paying stocks.
In 2016 I have sold just a few stocks, all but one at a gain.  Although I generally buy for the long-term, one of my investing strategies is to lock in fast gains and then re-buy the position at a lower price.  For example, I made a $1,200 profit in three weeks on Vereit in a non-taxable account.  I repurchased those shares five days after I sold them for less than the initial transaction's cost. The shares I repurchased are currently up 37%.

How am I doing?

7/1/2016 (Year to Date)
S&P 500: up 2.89%
Roth IRA: up 8.05% 
Taxable Account:  up 18.39%
Rollover IRA: up 20.02%

I am not an investing genius. What I am is a realist. I know not to get caught up in fads - that's why it's so easy to outperform the markets. A large part of "the market" is made up of mutual funds whose managers are chasing after each other. There is very little original thought out there because managers are scared they will make a mistake and lose their job. This fear leads them to follow the pack. It's hard to lose your job when your performance is similar to everyone else.

Investing can be really easy, especially if you do buy and hold like I recommend. Personally I spend about an hour or two each week catching up on news pertaining to stocks I own or would like to own. That's it. 

Simple is good.

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