in General

Investing Style

I’m pretty sure I’ve mentioned it here before, but I’ve been investing since I was 18 years old.  One might think I’d be swimming in the dollars right now but that is not the case.  Let me give you a history of my investing.

When I graduated high school, like a lot of new graduates, I got a bit of cash.  I’m not sure what I did with the rest but some of it went to buy my first mutual fund.  I believe that mutual fund was Pioneer Class A shares.  I put some more money into it over time and bought another mutual fund.  And it got me a certain ways down the road. And then I wanted a bit more. So somewhere along the line I bought Schering Plough (bought out by some other company), GE and Nokia.  I also started a ROTH IRA (if you don’t have a ROTH IRA now…get one ASAP!).  The three stocks I owned did nothing.  And my broker kept convincing me that I should stay in there.  I really should have told him to get off his butt and do something but I didn’t. While I still had my broker, I opened an account with Scottrade.  I just put in $500 and made an investment into Netflix.  That did pretty good for me.  I managed to make some money off of it.  I think in the end that account was somewhere near $3,000 if I’m not mistaken (adding more money and making money).  This showed me that I could do it on my own.

In early 2008 I finally told my broker it was time to part ways.  And I took the money above, the 2 ROTH IRA’s we had and a rolled over 401K and I started investing our money.  As many know 2008 is when the stock market went to hell.  Despite this I didn’t do to bad.  I made some more money off of Netflix (if I remember I doubled our money…had we held on we could have walked away with a hell of a lot more…that was right as NFLX headed to $300 for the first time!).  What was the most frustrating thing was having no system or style for investing.  How did I know to get into a stock or how did I know to get out of a stock?

So I happened up on Rule 1.  I devoured it and began looking into it.  I did my analysis on a few stocks and found a message board that I could post on (as I write this I think I’m a bit off on my dates).  Through various circumstances someone suggested that I check out Dorsey Wright and Point and Figure charting.  It took me awhile to find out what Point and Figure charting was, but once I did I again threw myself into it.  This was what I was looking for.

I found myself spending a ton of time trying to find the next best pick so I made the decision that it was time to hand our money over to a broker, but a broker that knew Point and Figure.  And I found one.  But then she retired and I ended up with another broker that I didn’t really see eye to eye with, but I stayed with him until early this year.  Early this year I moved our money to another broker who follow Point and Figure.

The moral of the story: find your investing style and do it sooner rather than later.  Had I been a bit more decisive in my investing I’d probably be rolling in the bucks right now.  I wouldn’t say I’d be retired, but we’d be well off.  Just this year alone I’d be up more than 20%.  Also find an investment style that suits you.  Point and figure works for me with the relative strength portion of it.