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Strategies & Market Trends : Jim's Nasdaq100 Special as a basket.
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To: James F. Hopkins who wrote (2030)10/24/2003 10:20:11 AM
From: Casaubon  Read Replies (1) of 2103
 
I agree about holding bonds long term, as well as, buying equities on high VIX reading, in index type products and funds. I don't share your disdain of stocks, however. <ggg> The trick is buying stocks that will go up. <ggg>

All kidding aside, try dollar cost averaging a company you think is run well. Allocate a smallish percentage of your total cash position (say 10%) and make purchases on selloffs over 1 to 2 years (on a monthly or weekly basis. On a weekly basis you will end up with 4X the commission cost but, the total will only be $500 to $1000. Adjust your purchase methodology so the total commission price is about 6% of the position or less). Over two years you can work into a ten or twenty thousand dollar position. If you pick a company that goes bankrupt, you've only lost 16% of your capital, including commissions. The interest from your bond portfolio safeguards you from this loss unless you need to draw down your capital. I think it's better than someone else mooching off your money, running a fund that doesn't do it as well as you can yourself.

Stocks are leveraging labor output. Dollars are incentive to put labor to work. Holding too many dollars excludes you from leveraging someone elses labor.

I purchased two stocks this year with about 10% of my dry powder. My "portfolio" is up about 15% on the year with very little risk.

My 401K is strictly in bonds with a couple of very small profitable forays into stocks. Total return: 3.5% on my 401K this year. However, I can't purchase stocks in that account, only funds which I don't like...
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