As of today, 4/7/2024, I am convinced of a few things in the world of investing:

When you invest you are really making a bet. Generally speaking, it is a great bet with good odds. To me, stocks are good bets because of the rising poplulaiotn in the world and the resulting rising number of investors and investing dollars. This money has to go somewhere manageable. Generally, the stock market is a good bet because the population of the earth keeps expanding. As more people try to save, that money eventually will land in the stock market. There is a limit on the number of viable investments for these dollars: a limited supply of places to park a lot of dollars. In Park Ranger terms, in increasing demand will be meeting a finite supply, meaning that over time, the stock market as a whole will increase in value. If the stock market takes a big ass 1930’s-ish dive, the poo is hitting the fan, and I will have much bigger problems to worry is my account worth.

My reality is that my investments are bets to get a total annual return of 2-4 percentage above the average return for the S and P 500 or the Russel 2000.

I am not a big fan of managed funds. I like the idea of index funds for two basic reasons:

1) Managed funds have big staffs and overhead that has to be paid out of the investments. A managed fund is starting a percentage point behind the index funds.

2) Index funds don’t have a bad year. Managers do, just ask the Detroit Tigers. I don’t have to worry about if the fund manager is going throuhg some rough times in his personal life or figure out if the manager’s new significant other is a good influence on them professionally.

I just don’t believe most funds really outperform the indexes in the long term. This is a good bet because the population of the earth keeps expanding. As more people try to save, that money eventually will land in the stock market. There is a limit on the number of viable investments for these dollars: a limited supply of places to park a lot of dollars.In simple terms, in increasing demand will be meeting a finite supply, meaning that over time, the stock market as a whole will increase in value until another practical investment mode is developed.

Index funds beat managed funds-Why?

-You are not betting on the fund manager to make good decisions at the right time.

- Fund costs are as low as you can get.

For Stocks, I select from the stocks recommended at my financial advisor firm. Why?

-This firm recommends investments for long-term growth.

-By necessity these recommendations have solid fundamentals making them a solid choice in any situation

-This firm is large and has a well-funded research group.

-This firm has a robust system of monitoring investment decisions based on their investment philosophy.

Note: You are in squirreling away mode until you get to six figures. Just get the savings into a quality 500/big cap stock index fund. I keep 10-20% in a bond index fund just to sleep better at night. I have dipped into this pot of money to capitalize on dips in the market. But I was comfortable keeping these stocks for several years if needed.

When looking at a stock to invest in, I find a solid stock that is cheap, typically something on my investment firm’s recommended list of stocks..

I have an exit strategy already in place.

Normally, this is to pull 50% out of the investment when it increases value 50-100%.

If there is another increase of around 50%, I’ll sell another 50% of the remaining stock. At this time, I often just hang onto the remainder and forget about it.

There are a few companies that have shown up for several years on the recommended stock list that I do not look to turn over.

Note: This money management style is based on a book I read on betting casino gambling that talked about shooting craps and playing blackjack.

-The first concept I applied to my portfolio is to try and pull some of the original investment from a winning investment.

-The idea is to be “using the casino’s money to gamble. “

-The other idea was to bet in such a way as to improve your winning percentage.

This is a medium-term strategy. Your investment value will usually drop for a period of time. Plan for the exit to take 6-18 months.

Find benchmarks to pull out of an investment that is performing poorly.

 I wound up with an account at a nationlly known investment firm that focused on long term value appreciation. This group has a good sized research staff that opines on how healthy a company is. My advisor, Steve, gave me a good rule of thumb: Buy stocks you like regardless of it’s current value. I have had some holdings in a high end cosmetics company. Why? it was cheap, my investemtn company gave it a solid longterm rating, and rich women are not going to skimp on their appearances.

I like tech stocks too. The tech sector just seems to keep rising. Health Care seems to always be a solid bet.

Energy and consumer discretionary stocks will rise a fall. I look for good companies that are cheap to get. I usually have to wait them out, but sooner or later the investment public catches on that these companies are good values.

-When the rating declines, I start to pay attention.

-When the rating is a sell, I think about selling.