Primary Stock Portfolio:
Determining the Initial Investment
There are a three main ways
to initially invest in the Primary Stock Portfolio. During
our testing, we’ve found that each works equally well, so
choose the one that works best for you. The main thing is
to just get started.
Method no. 1: buy an equal share
of all of the stocks in the portfolio rated "strong buy"
or "buy."
This is the simplest approach. Merely invest
an equal percentage into each of the recommended stocks that
have a rating of "strong buy" or "buy."
For example, if you have $5,000 to invest and there are 10
stocks in the Primary Stock Portfolio with a "buy"
rating or higher, then buy $500 of each. Don’t mistakenly
think you have to buy a round lot (e.g. 100 shares) of each
company. If you use a discount
broker, buying 1 share per trade doesn’t cost you any
more than buying 100 shares per trade. Later when new buy
and sell signals are sent to you, buy and sell accordingly.
When we started personally investing in the Primary Stock
Portfolio we bought an equal percentage of each stock.
Method no. 2: invest only in the
stocks rated "strong buy."
Method no. 3: compromise by buying
only the stocks rated "strong buy" and saving a
portion of your investable funds for new buy signals as they
are issued.
A compromise that many subscribers adhere
to is one in which they immediately buy only the stocks in
the Primary Stock Portfolio that are rated "strong buy"
and set aside some money for future buy signals.
But what to do with those other funds while
waiting for more buy signals? We believe in staying fully
invested, therefore the portion of one’s portfolio that isn’t
immediately invested in the Primary Stock Portfolio can be
invested in a number of alternatives, depending on your preference:
• One of our other stock
portfolios such as the Short-Term Stock Portfolio
• Our recommended mutual
funds
• Index funds (e.g. ticker VFINX)
• Exchange traded funds that mimic the S&P 500 or other
indices, such as ticker
symbol SPY
Please note that stocks from the collection
of Stock Screens
for Short-Term Investing (available separately) are not
recommended as a holding place for more than 5% of your stock
portfolio. These Short-Term Stocks are too volatile and often
times are not diversified across enough industries to safely
hold a large percentage of your portfolio.
There is nothing that says an investor needs
to stick with only one portfolio strategy. We certainly don't.
The only reasons the strategies are kept separate is for tracking
purposes and investors sometimes prefer certain approaches.
So feel free to mix and match to suit your personal tastes
and circumstances.
|
