One of the hardest things for me to do is change my investing behavior. I love growth stocks, I love concentrated portfolios, and, I love hedging my bets. My biggest hedge is time. I would purchase 1% to start to follow a stock, invest 2% more if the after the first earnings report or a news confirmation of my thesis, and add 2% increments in the same way until my position hits 8% or until my thesis is broke.
To be clear, I have avoided several dumpster fires by getting out without risking too much up front capital, but I finished my analysis of the last three years to find that I reduced my returns by 30%. Now, I am filling out orders almost immediately, or maybe splitting it 50% between pre and post earnings.
I just wanted to share what has not worked for me. I feel a bit disgusted with my stubbornness and unwillingness to put my method under the microscope. I hope this is helpful.
your former bulwnkl strategy might have worked a lot better in a flat to declining market. In a roaring bull it’s get in before everybody else does. But congrats on putting your methodology under the microscope of close examination , that’s tough to do.
bulwnkl, I think it is good to analyze one’s habits in an effort to continually improve. Like you said dollar cost averaging is a good hedge and your analysis is definitely going to show missed returns in this current market. On the other hand If we had been in a bear market I’d wager your analysis would have shown you would have saved yourself a bunch of money. May we all be able to recognize the difference
Ethan & Mauser,
Not being a great method during a rising market is a good point, and one I considered during my analysis. Maybe it’s my slightly risk averse nature, but 3 years ago, I thought the market was very expensive so I invested accordingly. 30 years of serious investing has not improved my crystal ball, though my stock picks have improved considerably :o)