Friday, September 28, 2007

Buy and Hold is my life.....readjust every so often......

I would like to think that my investment approach is one of "buy and homework" (As Jim Cramer calls it).....but I think it is a bit easier to describe it as a more classic buy and hold.

Every quarter I look at my portfolio and see how it is doing. I do this against what I think the market is doing...and I look at particular items in the mix against each other.

I try not to chase maximum yields, but rather I try to see if the overall blend is performing OK. I tend to leave things along, and perhaps do a small level of "rebalancing" if things are a bit skewed.

But even here, this is normally a once a year activity.

I do the same for saving...I don't think about it on a daily of weekly basis....I set-up a budget and and allow my savings to simply be an automatic part of my cash-flow. Then I just monitor the items of my budget on say a monthly basis to make sure I don't spend too much and unbalance the apple-cart.

When this works, savings just seems to happen automatically. I don't fret over it. It might not happen in the same level every week, but over the long term it works.

I sort of put it on autopilot.

CASH FLOW IS KING: if all this is automatic, how do I make it happen? What is it that I monitor and adjust?

How keep the whole system described above the black? How do I know my plans and budgets are going along as planned?

Well, I monitor cash flow fairly closely. I find this is the magic lever because that's the place where money is moved.....and is the place where the rubber meets the road. Once I get my weekly spending in line with my budget, I know I'm saving!

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Tuesday, September 18, 2007

I think I have entered the Investment Twilight Zone.....

I was looking at the news flash of the past few days and instantly said to myself.....
"Eeek, our economy is slowing way down. Perhaps I should be worried."

What am I talking about you ask.....

  • It started with this report that mortgage foreclosures were way up.
  • Then there was this report that the federal government is stepping in to protect us from the increases of forclosure.
  • Then there was this news that producer prices have dipped because of a poor outlook for sales and home builders are gloomy.
  • Then...I see the Federal Reserve making a bigger then expected rate cut.....ouch, the economy seems to be on the slide to me. They are normally very slow, deliberate and conservative.....this worries me.

So at this point I'm thinking.....yikes, slowing economy, recession.....what do I do with my stock and bond investments?

  • But what happens instead......first I see this report where Wall Street seems to love this news with the Dow going up a record amount....the highest single day increase in 5 years!
  • But if housing loans are a problem.....we must be stressed for credit, right.....YET, this report shows that credit card stocks are on the rise!
  • Maybe I have my mental model wrong....surely housing stocks can't be up, right? WRONG....check out this report as they too seem to have risen today.

How does all of this work? Is this the twilight zone?

What am I doing wrong here? Where can I go to learn how to read the market?

People say the market is the best judge of I missing something?

----- CONFUSED and WORRIED -----

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