THINK LIKE A MANAGER
Think about your investment portfolio as your team, and each stock as player with a specific role to play.Some should be sluggers that can produce the home runs, some only need to hit for average consistently and get on base often, some may be young and unproven and others already have great credentials.At times, defense can be as important as offense, and during the course of a season there will be some surprises and you'll undoubtedly make some trades to attempt to upgrade your team (portfolio). But the more carefully that you have evaluated your players (companies) as you selected them for the team and the more patient you are, the less trading you have to do. And it's a long season, so don't expect to win every game.If you're going to play the game, you'll probably lose about one -third of the time even if you have a great team. There will be some stars (five or ten times your money) and some role players (moderate but steady growth with good yields), but if you have assembled the team properly the players will complement each other and the team will be more than the sum of its parts. So build your portfolio for the season - not the next inning,and don't panic when you have a losing streak. Make sure that all your players are fundamentally sound and that you diversify your holdings. If you have a mix of growth and value, high quality and speculative, large and small caps, and turnarounds and companies with currently strong momentum you'll usually be in the game and have a well rested pitcher in the bullpen and good pinch hitter on the bench when the starting lineup has a bad day. |
