A friend stated that I have recommended many stocks on this blog, but there is no way easy to track the success of the picks. I often condemn the gurus on CNBC who tout stocks and are nowhere to be found when their picks crash. Then months later we find that they sold out a couple of days before the crash. Then they say that maybe you should just hold yours now for the long term. Or maybe you should buy more now, because if you liked it at $30 – you must really love it at $15. I often have flashbacks to 2000 when virtually none of the gurus were advising Main Street (the general public) to sell their stocks.
So, basically my friend wants me to be more accountable for the stocks that I recommend. I understand that – respect that and agree. There is only one problem. I haven’t recommended one stock since starting this blog. Well, maybe two were “strongly suggested.” The stocks that I have mentioned were basically stocks that I liked. OK, so maybe I am simply playing with semantics. However, I truly have no intention for this blog to become a stock touting service. Also I am not a registered investment advisor, so I can’t legally recommend stocks.
Most of the post here are stock related, because that’s what I do. That’s how I pay the bills. My goal is to encourage others to pursue Financial Freedom. It doesn’t matter what vehicle is chosen – stock market, real estate or small business ownership. Matter of fact, trading/investing is probably the most difficult of the three paths. Primarily, because Wall Street has spent Billions of dollars mis-educating Main Street to their own benefit. Buy and hold for the long term – is the biggest hoax ever created. Good luck breaking even on Microsoft if you bought it in 2000. By the time most figure out how to really make money in the market, they have run out of capital.
I believe the best way, for most, is to use the stock market to supplement their real estate or small business endeavors. The goal becomes to create 20% of your income from the market with the remaining 80% coming from your other businesses. So, in good times the market serves as additional income. In bad times, it offsets the decline in business. I believe this is achievable. More importantly, I believe it is achievable without becoming a stock market guru.
This leads me back to the two stocks that I have “strongly suggested” on this site. They are CEF and GDX. Go back and review the article “The No-Brainer Investment Strategy to Double-Digit Returns.” I believe that it is one of the most important articles on this site. I also believe that it is the key to using the market to supplement your other businesses. Each month I track CEF and GDX in the Dollar Cost Averaging articles. So, I am very accountable to that strategy and those two stocks.
Now for the crazy few – like me that want to try to make a living trading you will need additional strategies to meet that goal. So, what I will start doing is tracking the performance of one of my real portfolios. This will give you a feel for how I trade. Many may not agree with my style. However, it works for me and allowed me to quit my day job. In the follow-on post, I will describe how the portfolio is constructed.
Now I realize that this doesn’t completely addresses my friend’s question. However, this will provide another level of accountability to the stocks discussed here. Much beyond this is would be going in a different direction that I am not prepared to do – yet.