Statutory Warning: Stock market investment is the most risky investment possible. Stocks may lose its entire value, leaving you with no money and no future! (My version of the disclaimer)
Saying the above warning let me confess that I started buying selective shares starting today. This is investment, not trading. I don’t trade stocks, I invest in stocks that means I buy and hold them for long-term.
I do not follow Cramers of the world or for that matter any TV expert. I don’t go to alphas and fools for their advice either. I believe only in Buffet and his philosophy.
Buy when everybody is selling and sell when every body is buying
For past few months I was waiting for this day, the day when Dow will be below 11,500 to buy some more stocks to add on to current portfolio.
I invest 15% of my monthly saving in to stocks, and I save 50% of my salary, so I invest 7.5% of salary in stocks. I wasn’t buying any share since April and this money was sitting in checking account waiting for its turn to be picked up.
My stock investment strategy might sound funny as I buy only those stocks which Berkshire Hathaway has in their portfolio.
My Stock investment strategy
- I buy only those shares which Warren Buffet has invested in (I already have GE, PM, YUM, KFT, COP etc), safe heaven, no research required, easy pick.
- I do not sell usually, I sell only when Mr. Buffet sells (this has certain draw backs, hope one of my readers catches it, so not mentioning it now)
- I buy as many stocks of a particular company that I can have in $2000 (I have less COP stocks than GE because GE price per share is lesser compared to COP). This is to diversify my portfolio and to limit risk.
- I keep dividends from each stock (all my stocks are dividend paying) in brokerage account (I use MB Trading, ever heard off?), and wait till it reaches $2000, at that moment I buy another of Buffet’s shares.
- I never bought and will never buy a share which is less than $10 a piece.
- As I said before, I am an investor, not a trader that’s why I never day trade. I understand that there are industries out there, where employees trade shares all day long, make hefty profit out of it. But, I am not just that educated in stock market trading, so I keep off trading stocks.
I bought shares of AMEX, and Wesco today, and planning to buy IR tomorrow. ( I am writing this post on 08/04/2011 evening, stock market collapsed by 500 points today, if you have found me through Google search and have no clue what I am talking about)
Why I am buying now
- I refuse to be one of those small investors who buy at top and compelled to sell at bottom. (this group contains 80% of the investors)
- The stocks I was aiming for are at record low today.
- I bought few shares in 2008 and received 100% return of investment in last 3 years, I want to repeat that feat.
- I had stock money sitting idle in 1% interest paying checking account, almost loosing value to inflation.
- I am young with a family of two, I can afford to take this risk.
- I didn’t invest a fortune; only 15% of my savings in last few months went in to buying stocks of reputable companies.
- If I decide to spend my retirement days in my home country, I can retire now with my current savings and live life happily ever after. If I lose all stock money, I will do just that.
As I said, I do not follow any body’s investment advice, I am not asking you to follow my advice either, do your own research and buy stocks you like, whatever you like.
Saying that, are you buying stocks this week? Which ones and why? Wait a minute; are you the ones who sold off today?
Thank you for reading it through the end, hope you got the message I tried to convey. And the message is if you are brave, go for it.