Can Stocks Outperform an ETF?
It’s been awhile since I talked about stocks. What happened?!?! Oh yeah, life happened. But after re-reading a great guest post on accountability leading to success, I figure I need to be accountable for my latest stock moves and challenge.
Mutual Funds: Diversified, Simple, and Less Risk
For years, I’ve been a mutual fund guy. Nothing to write home about, but I was relatively happy with my performance. Lately, with things turning around, I started to re-evaluate my portfolio. Can I squeeze a little more if I handpicked a few top performers? I understood the risk and taking on more volatility, but I figure I always need to improve myself and my game. So here it goes.
Any time you deal with any investment, you should have an exit strategy. Some of your moves will go against you, and you need to minimize losses when it does. All my trades have an additional stop loss order of 8% (CANSLIM) under my first buy order. I am also using INO.com’s Trend Analysis to guide me as well.
Let’s Get It On!
With $10,000 in my trading account, I will have a head to head battle, with myself! Half of the funds will be used to trade QLD, an exchange traded fund that doubles the performance of the Nasdaq-100 Index. I am most familiar with the tech sector so I chose this fund to try and keep up with the high fliers and to stick with what I know. Keep in mind, if the market goes up, I’ll be in good shape, but if the market goes south, this fund will also double the losses of the Nasdaq-100. The second half of the funds will be divided amongst three stocks that I follow. On one hand, I will be trading in and out of QLD. On the other hand, I will take new stock positions as I see fit, but will always try to have a maximum of three stocks, to keep things simple. Currently I am holding Apple, Chipotle, and Priceline.
Stock Market Iron Chef
Many times I looked at past performance of stocks and ETF’s, but my assessment never stuck because I had no skin in the game. Putting it out there and making myself accountable to my readers, I hope to improve my own portfolio management and performance. This challenge will go on for a year, with occasional updates along the way. Enjoy the challenge from the sidelines and feel free to chime in with your nuggets of wisdom. Finally, I will see which cuisine reigns supreme!
What has performed better for you? Stocks or ETF’s?
John Chow Guest Post Pain was featured in the Totally Money Blog Carnival Presidential Quotes Edition hosted at Fat Guy Skinny Wallet.