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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: Grainne who wrote (23326)	7/9/1998 12:57:00 AM
From: greenspirit	Read Replies (1) \| Respond to of 108807

Christine, I know I am just another joe-bloe investor to you here on SI, but I'm going to uncharacteristically describe my investment method and philosophy, in the hopes that it will improve your future performance. The first thing...You have to completely believe, in your heart of hearts that NOONE can time the market with individual stocks long term. We all think we are better than the rest, but this is where we fall into the trap set by wall-street. Some people have amazing short term track records, but unless you are willing to spent every waking moment in front of the computer screen, with level 2 trading, the odds are seriously against you. Well given the above, what is the smart thing to do? Simply buy mutual funds? Actually for most people this is the best method. Do your homework, research the best funds and put in a set amount every month. Most people would be surprised how much better their performance would be with this approach. I've taken a little different tack, and applied this philosophy of dollar cost averaging to individual stocks. Then the question is, which stocks? I believe the macroeconomic trends are the keys to discovering which stocks will give you the better long term performance. Two area's I still believe have a long road to travel are 1. Technology 2. Health Care. So I looked carefully at the leaders in those markets, Then I simply took a set amount every month and set up a DRIP account with one of the brokerage houses. No fee of course, and put in a specific amount every month. My choices have been. Intel, Microsoft, Cisco, Johnson and Johnson, Merk and Pyzor. Now, since this type of investing is not as fun as playing those wild micro picks, I temper this approach by trading never more than 20% of my portfolio in basically whatever I can find. Another useful method is to buy long term leaps when your bellweathers are out of favor or have corrected greater than 20%. Intel fits this bill now IMO. I think you would be surprised how well this simple know-brainer approach works. I started this approach with Microsoft nearly ten years ago, then added a bellweather as I could afford it. If I was starting all over again today, I might look at a few other bellweather stocks. Lucent, SAP, Airtouch Communications, or a few others in Health Care. I hope this helps a little. Regarding the economy... The economy looks poised to slow down. Unemployment will probably creep back up to about 5%. The good news is this will temper the fed who will not raise rates this year. That means bond yields are still likely to fall and with them a continued strong housing/refinance market. These all look like fairly positive signs to me, so the market leaders should continue to outperform the indices. Big picture wise, I see the American economy led by the Reagan tax cuts of the early eightees, creating an unprecedented economic prosperity into the next century. Three factors are at work simultaneously. 1. Demographics, baby boomers are investing like never before. 2. Information technology. These are nearly ALL uniquely American companies, information technology is the steel mills of the future. 3. Quality. An often overlooked area of the American economy is that the paradigm of quality is reaching into more and more industries and creating tremendous productivity gains. American Industry had been operating so far from the "production frontier curve" that the shift to "quality" is having tremendous positive effects. What are the potential risks to this scenario? 1. Way higher spending and taxing by politicians. 2. An overexuberant DOJ shutting down our hightech leaders like Microsoft, and Intel. 3. An asteroid! :-) Michael