Tim-
I feel like I just read my life story in your post. I too am working on fortune #3 :)
The funniest thing is that I also decided I was going to cut back on my trading this year and concentrate more on LTBH. What a mistake that turned out to be. This has been the year of the stock trader.
I have recently decided that I am giving up buying individual stocks. I'm no good at it and my appetite for margin is like eating steak knives in a down market.
I have found a technology mutual fund that owns only 25 stocks and many of the ones I used to own or would liked to have owned if I had more funds at this time.
This fund moves just like the underlying stocks as one would expect. It was down over 20% in the last week and is up over 6% today. It is also marginable through Schwab or Waterhouse.
The funny thing about this mutual fund, and mutual funds in general, is that it holds all high margin requirement stocks (many are 80%) but because it's in a mutual fund, the maintenance requirment is only 35%...go figure.
In case anyone is interested, the fund is the Red Oak Select Technology Fund (ROGSX). The top ten holdings in order from 1 to 10 which comprise 51.6% of fund assets are as follows: NEWP, BRCM, JNPR, BRCD, CIEN, CSCO, NTAP, AMAT, JDSU, PMCS. Other stocks in the remaining 15 include, SUNW, EMC, IDTI, CFLO, EXDS, NVLS, MXIM, SMTC, SDLI, INTC, AVNX, TQNT, VTSS, JNIC, and TIBX.
The fund went public in 12/98 at $10/shr and reached a high of $44/shr in 10/00 and is currently priced at $22.73 today. To say the least, this fund follows the Naz to a "T".
Even though this fund is really volatile, I somehow feel safer knowing I own 25 stocks instead of the 1, 2 or 3 stocks I'd normally be heavily concentrated in.
I am currently invested 127% in this fund and will considering margining more once the market settles. Last week CFLO imploded 57% in one day and the fund barely took a hit. I guess that's the beauty of mutual funds.
I kind of miss the hands on part of owning individual stocks but I feel like I own the 25 underlying stocks and do keep a close tab on many of them, especially those in the top ten. There is also some comfort in knowing that there is someone watching these stocks on a full time basis for me.
This may not be as exciting as owning individual stocks but I'm quite sure that if I ever do make fortune #3, it will be much harder to lose it a third time. |
