Picking my First Stocks
It is human nature to try and improve things. I suppose that is good and has led to much innovation. The natural MFI question: “how do I pick the “best” stocks from JG’s MFI list”? While I would be ecstatic with 30% returns for the rest of my life, I would be ecstaticer (hmm, my spell check didn’t like that one) with 35% or 40%. Using the rule of 72, a 30% return will double your investment every 2.4 years. Would it not be neater to get 36% and double every 2 years (I know you really need 41% to double!)??? The math gets so simple then! I start with $10,000 and in 30 years I have,
So many choices:
- Large cap or small cap stocks. JG’s research supported that small caps did better, though to be fair he actually said that large caps did worse.
- Beaten down stocks vs. growth stocks. Both kinds come out of the formula.
- I thought about cross-referencing the list against Cramer’s lightening round picks. A decent approach perhaps assuming Mad Jim doesn’t change his mind the next day, “sell, sell, sell, sell!”
- I saw a suggestion about Dogs of the Dow approach, pick the ones with the highest dividends. I like dividends.
- How about diversification? Should I be buying stocks in sectors where I am underweight?
I could go on and on. It was making my head hurt. Just typing about it right now is making my head hurt. So I won’t bore you (gentle reader) any more. Suffice it to say I came up with 19 stocks purchased between 2/24 and 5/16. Technically I bought 20 stocks and sold one, more on that to come!