Long Term Investing

Longer Term Investing

I have spoken in other posting about Long Term investments and Short Term Individual Stock investing.  This is the strategy that I personally like.  But this does not mean it is the only strategy for Long Term Investing.

 

I stand by the fact that Mutual Funds should be a long term investment.  That does not mean you cannot change your Mutual Fund holdings if you see one was not a good choice and doing very poorly and making little to no money for you.  You can always transfer that mutual fund to something doing much better within your family of funds.  But it is still a long term investment in my book.  I have changed mine around over the years to keep my money working to its best potential for me to increase the value of my portfolio. 

 

I talked about short term stock holdings previously.  Investing in a stock that I know is running or going to run, waiting on it to increase by 20 to 30 percent, selling it and taking my profits and running.  This does require lots of monitoring and many average investors do not feel they have time or want to do this as regularly as they should.  But the alternative is for Long Term Investing of Individual Stocks.

 

Long Term Investing of Individual Stock is a viable option.  Being able to seek out companies that over the long haul not the short term that will produce you a lot of income as the price per share continues to steadily rise and produce you dividends.  Not all long term individual stocks need to produce dividends to make you money and increase the value of your portfolio.  You must do your research to find these gems to invest in on a long term basis.  I watch Jim Cramer every night on CNBC.  His recommendations are primarily for the long term investor in individual stocks.  I agree with most things he talks about.  But that does not mean you still do not have to do your own research first.  He can point you in the right direction at some good potential investments, but he does not manage your portfolio.  You do and thus it is your responsibility to do the leg work and the research to see if something he has suggested fits into your portfolio and long term goals.  Your long term investing of individual stocks should be diversified into various areas of the market.  But this I mean do not hold for example all Healthcare Stocks or all Tech Stocks or all Retail Stocks etc.  Varity will protect you and keep your portfolio balanced and safer.  Also common sense has to play into your choices.  Your strategy is for long term growth and the potential the stock/company has to grow.  Let's look at stocks like Pepsi, Coke, McDonalds and Wal-Mart.  These types of stocks have reached most of their growth potential.  They have saturated the market Globally.  And unless we find a new planet to colonize they have nowhere else to grow or to grow much.  Thus you will not find them in my portfolio and nor should you.

 

Timing is important when looking for a good deal and the time is now.  For the last three or four days the market has had a small pull back and has closed down.  Poor Black Friday results for retails helped with this while a good Cyber Monday gave little help to the market.  Thus the average retail market did poorly while discount internet web retailers and high end retailers like Tiffany's held strong.  The rich are always going to spend money regardless of the economy.  Almost 50% of people in America still feel we are in a poor economy situation, thus looking for discount prices on the internet at discount retailers.  Thus why these two areas of the retail market are holding strong.  Where you box stores have seen poor showings in the market.  Did I expect this slight pull back in the market.  Yes, and I was waiting to see it happen.  Usually you will see these kinds of pull backs in the market sometime in November or early December and it held true once again this year.  Thus making this a good time to look at some individual stocks for your portfolio before they take off running again.

One other thing we have seen in the market is falling gold prices.  I expect to see these to continue to fall for awhile.  Thus gold companies are starting to look more attract.  One that I have personally been monitoring for a couple of years now is Randgold Resources Limited (GOLD).  This stock has taken a bath over the past year or so.  Why?  Because it is directly related to the prices of gold which have also been tumbling.  Will Randgold recover?  Yes just as soon as gold prices begin to rise again.  I see worse for Randgold in the future as its price continues to go down.  But this is certainly a stock to put on your watch list and monitor.  When gold starts to soar again so will this stock and that is when you need to buy and ride the wave.  When stock prices begin to decline again, dump it and take your profits.

 

Hope this information is helpful to you in your long term investing plans in your portfolio.  Have a question?  Please feel free to leave them in the comments or email me.

 

Gus S.

Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.