Hey Fools,
Newbie investor here. Was wondering if anyone has any thoughts or suggestions on utilizing the quant 5y screener to help with investment strategy. As I read about investing, the idea of dollar cost averaging seems appealing. I was thinking of using the quant 5y screener to help narrow down the population of fool stocks and invest monthly a set sum into the top 10-15 stocks. Any thoughts or suggestions on this plan?
Thx in advance!
Hi, warrentardigrade.
First, I think that the Quant/5Y screener is only available to Premium Fools and this is a Freemium Community discussion board. You would probably get more response to your question on a Premium Community discussion board.
To try to address your question, dollar cost averaging is appealing for many Fools, and could be particularly attractive given the current market’s volatility. The trick is to understand what you consider to be a full position and then work towards achieving that. For example, if you want to invest $5000 of shares in a company, you could plan to do with $500 trades over 10 months. Or you could decide to hold a $1000 position, and buy in thirds, with $333 trades.
And while you can use the screener as a tool to narrow down your purchases, I personally would not use it as the sole determining factor for whether to invest in a company. First, if you are a Premium Service subscriber, I would focus on the companies in your managed or real-money portfolio service first. If those companies are also in the top of the Quant/5Y list, then that could give you extra conviction in their long-term (3-5 years or longer) business growth potential.
Don’t look at the Quant/5Y screener as a way to bypass looking at the actual companies being screened. There are no quick and easy shortcuts around doing reasonable and appropriate research and developing your own conviction in a company’s potential for long-term (3-5 years or longer) business growth…
Fuskie
Who also thinks that just having an open-ended DCA strategy is not very Foolish; Fools should have a target value for their position and look for market bargains and discount opportunities, not just employ an automatic and indiscriminate investing strategy…
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