And Last, But Certainly Not Least, "Promote
Investment Capital Growth"
Many people feel that this should be the
first thing an investment advisor focuses on, not the
last.
But if you look at the numbers in investing you
see that a loss of 10% requires an 11.11% gain to get back
to even; 25% loss requires a 33.33% gain to break even; and
a 50% loss requires a 100% gain to break even.
It seems to me that to Preserve Capital and to
Manage Risk can be more
important then a total focus on promoting growth. It
requires much less gain to have a good return if you are
protecting your capital base.
Markets are volatile and moved by events and
you can't always count on them going your way.
My strategies for promoting growth center on
screening for fundamental strengths and using point and
figure charting to determine supply and demand of the
securities that I purchase.
Although I do buy individual stocks, I also
like to use exchange traded funds(ETFs are baskets of
securities not mutual funds) for sector plays.
There is generally less volatility in an ETF
than in an individual stock which can be hit hard in one day
by news events. Usually an ETF, which has several,
securities is less volatile.
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