October 12, 2007
Show Me The Money
I can honestly say that getting a higher return in a portfolio is actually easier than most people think. My investment strategy is becoming a little more complex, but my theories are still pretty basic. Find good and profitable companies with long sustainable growth. Of course one of the biggest changes that I’ve done is purchasing more shares of a company instead of diversifying in many companies with a lump sum. I would rather a return of 20% with an investment of a $1000 in one company versus a 30% average return in ten companies with the same investment amount. I know I’ve been covering this issue a lot lately, but I truly think it’s an important topic. Trading fees can kill an investment when you buy in small increments. I know a lot of bloggers disagree with me on this, but in my personal experience its worked wonders.
Last year my individual stock portfolio returned a pretty healthy return, but I’ve already made almost double that even when I incorporate trading fees. I realize that putting more of my eggs in fewer baskets can be dangerous, but doing your homework can really save that “investment risk.”
This year I’ve made some big purchases (for me at least) in some good growth companies. As you know, I’ve decided to buy Nintendo and E*Trade. I still have $2200 left to add to my Roth IRA. Here are the stocks that I am looking at purchasing later on this year. Masimo Corporation was brought to my attention earlier last month. Jim Cramer also reinsured my position after speaking highly about the company earlier this week. The company recently became public and they’ve done a great job in the medical technology field. They have patents on their most profitable products and apparently they have technologies that will change the whole industry.
Pengrowth and Penn West are still looking good and have those extremely high paying dividends, which is always a good investment. I’m leaning more towards Penn West because Pengrowth just lowered their dividend yield. The nice thing about these companies is they pay their dividends on a monthly basis. This means your investment compounds monthly and grants you a higher return than the quoted dividend. I want to maximize my returns this year. I want to aim at getting a 54% return. I know it seems high and unrealistic, but I could sell the shares I already own and put them in cash and make a 32% return.
Everyone has a different investment strategy and I am not saying that mine is perfect, but since I’ve changed my style, money is certainly coming faster than before. Just remember that diversification in small amounts will lower your return. I would recommend putting your money in a high-yield savings account until you reach a $1000 dollars. After that, you can look at what stocks fit your investment style and strategy.
















