Monday, August 24, 2015

Picking Investments

Another blogger, Leslie, asked me how I picked my stocks and researched them.  I will give a back story about how I started investing a different time but I will try to explain how I pick investments now.

I actually have two retail investment accounts.  The first account is with Sharebuilder that I've had for over 9 years.  The balance took a dive today and is just under $8000.  I only have individual stocks in this one.  I have Titan Machinery which has done horribly.  I bought this just as I was getting back into investing and didn't do any research on it.  Commodity prices tanked a couple years ago and farmers aren't buying new farm equipment.  I also own Halliburton, BP and Conoco, all of which were bought around the first of the year when oil first tanked.  I'm down about $1500 now between the three stocks.  I didn't really research them but just bought when oil tanked.  The other stock I own is Coach.  I just bought this in the past month.  Again, I didn't research it much but I do think it's solid stock.  This account was down a total of $1700 today.

The other account I have is with a brokerage firm with an investment advisor.  I have $27,000 in this account and heavily rely on my advisor's advice.  I have a relationship with the advisor, not the firm.  I would follow him to a different firm if he left.  I know him personally and he isn't shy about telling me what to do.  I think he has my best interests in mind when he tells me what to do.  I have three mutual funds.  Two were the first ones that he recommended.  They are income producing funds and not very risky.  The other one is the one that is getting all of my money lately, it's an energy fund that I talked to my advisor about when oil started really heading south about a month ago.  It's less risky than buying individual stocks but still in the energy sector.  I knew I wanted something in the energy sector and he steered me in this direction.

Overall, I'm a terrible researcher but I've always made money on stocks.  I've sold Playboy, Halliburton, GE, Bank of America, ING, and Caterpillar for a profit.  I lost on GM.  I have a bit of a reckless personality which is why I want to buy when everybody else is selling.  However, that reckless part of my personality is what makes me a bad investor which is why I need a trusted advisor.  The traditional personal finance investing advice is to buy Vanguard mutual funds and hold.  I'm not that patient and I'm not enthused to do that.  This is what works for me and I hope it's profitable.

What do you think?  Do you think I'm crazy?

1 comment:

  1. Nah, as long as you do both. Personally, I am scared to death of individual stocks, but have burned badly by owning them in several occasions throughout our adult lives. However, I am not adversed to peer-to-peer lending and REITs paying dividends. I am a little to heavily invested in the energy sections (inside views). It would make me want to invest more and when we are out of debt, I just might. Nothing is happening to the oil industry - I will say that. As long as there is oil out there, there will be a company that gets it. You just have to chose the right company that can change with the technology. Some look good, but carry high debt with lots of lawsuits.

    Anyway. As we get closer to time to invest more, I will be doing to the long, slow Vanguard route, but peer-to-pever lending, hubby wants to get into tax loans, REITs, and actual real estate - all on top of maxing out the retirement avenues.

    Whew! Lots of work!