Investment Strategy

An investment strategy is a protocol and methodology for allocating funds of a portfolio. This strategy is based on an investor’s risk profile. The more risk the investor is willing to take on, the greater the potential returns—but also the higher the risk of a loss in capital.

There is a whole universe of investment strategies, from the least risky being Treasury bills and government bonds with high credit ratings, to the more risky buying of stocks based on fundamental analysis, technical analysis, or simply buying and holding for the long-term. Some investors also look to stocks with dividends that return a yield over time to mitigate some of the risks of the stock market.

An investor’s investment strategy typically has to adapt over time because capital markets and sentiment change perpetually. In recent years, a buy-and-hold investment strategy has worked well, especially among large-cap, dividend-paying stocks. This strategy should continue to work near-term.

Fed: Stock Market Expensive; This Second Warning Shouldn’t Be Ignored

By Friday, March 6, 2015

Federal ReserveThere is a significant amount of evidence that suggests stock market valuations are stretched to the extreme. Even the Fed thinks the market is expensive.
Federal Reserve Concerned About Stock Market Valuation… Read More
On February 24, 2015, the Federal Reserve issued its semi-annual monetary policy report. In this report regarding the stock market, word-for-word, it said, “Overall equity valuations by some conventional measures are somewhat higher than their historical average levels, and valuation metrics in some sectors continue to appear stretched relative to historical norms.” (Source: Board of Governors of the Federal Reserve System, February 24, 2015.) This is the second time the Federal Reserve has said something like this.

Should Investors Focus on Individual Stocks in 2015?

By Wednesday, January 7, 2015

Investment StrategyMy Investment Strategy for 2015
The one thing that the bears have going for them is that eventually, they will be proven right. The stock market has risen tremendously over the last few years, breaking out of its previous cycle, which I view as 12 full years of recovery from the technology bubble and financial crisis.
With the main stock market indices having gone up unusually fast, it’s important now to detach expectations for the “market” and take a closer look at single positions and portfolio risk…. Read More

Microsoft Expecting Its Strongest Quarter

By Wednesday, November 19, 2014

Microsoft Expecting Its Strongest QuarterOne company that is consistently seeing its earnings estimates tick higher is Microsoft Corporation (MSFT). The stock has basically doubled since the stock market breakout at the beginning of 2013, and the company has been increasing its dividends significantly.
Microsoft’s current quarterly dividend, payable in early December, is $0.31 a share, representing an 11% gain over the previous quarterly dividend…. Read More

Drop in This Company’s Stock Price Makes It Very Attractive Now

By Wednesday, August 6, 2014

Top Company for Dividend ReinvestmentJohnson & Johnson (JNJ), which is one of my favorite long-term stocks for income and dividend-reinvesting investors, just dropped below the $100.00-per-share level and is becoming more attractive each day.
This stock has been doing extremely well over the last few years and should continue to do so. The position has been a worthy buy when it’s down and according to its recent trading history, it typically isn’t down for long…. Read More

Simple Wealth-Creating Strategy for Long-Term Investors

By Monday, July 14, 2014

Compounding Strategy Every Investor Should ConsiderAs a strong believer in the wealth-creating effects of large-cap, dividend paying stocks, I’m also an advocate of dividend reinvestment, which is the purchasing of a company’s shares using the cash dividends paid.
This can be done commission-free from your broker and/or through the company itself if it offers such a program.
Dividend reinvestment is a powerful wealth creator if you do not require the income paid out by a corporation…. Read More