Posted by My investment journey started with a set of rules for buying stock. One of them was that I would only buy stocks that were under $30 a share. Today, almost 40 years later, my maximum price limit is $80 per share. These days, that rules out most semiconductor and tech companies. My minimum buy is 50 shares and my max is 100. I usually add to a position in 50 share increments. If there are two investments that I like, and they have a similar price, I will buy 50 shares of each. After a month or so, I will look to see how the stocks are preforming. If one is up and the other is down by 10% or more, I will sell the one that is down and use the money to buy 50 shares of the stock that is doing better. Then I have 100 shares of the stock that past my buy test.
There are numerous factors that can impact a stock price. For the average retail investor, most of these factors are controlled by unforeseen conditions. So having a few guidelines can help minimize your losses. It is even more important as your portfolio balance grows. In the past 12 months my account balance gained $97,138 (+11.46%). The percentage gain is more than the DOW and S&P500, but less than the tech heavy NASDAQ. It is not unusual to see daily fluctuations of several thousand dollars. There is always going to be someone with a bigger account than what you have. You have to set your own goals and be smart about how you invest. Sometimes you get it right and sometimes you don’t. You just have to adjust your strategy and move on.
With the increase in home insurance and property taxes, I decided to setup a recurring monthly transfer from my IRA account to my spending account. Just enough to cover the increase. Being at mid-year, the amount will have very little impact on my income taxes. It will also have no impact to my IRA balance. My credit card spending has also increased in the past year. This will help my spending account from having negative cash flow. After I apply for social security next year, the budget should get some relief. There are a lot of purchases that get delayed when you are on a budget. The rule is: never buy new and don’t replace unless it can’t be fixed.