Tuesday, September 8, 2015

In order to make money in the stock market one must be willing to invest for the long term.  And one must be willing to budget some money each month for investment. My investment strategy advises one to invest no more than $1,500 a week. This may be too much money for many people to put aside. Don’t be discouraged. Just take a look at my weekly stock suggestions. I will have no more than three equity suggestions a week. Each of these purchases will be around $500. So you could just pick the one you like the best and only invest in $500 for a week. You can pick and choose your investment strategy. Maybe you only want to invest $1000 a month. When you go to the web site www.capitalistwizard.com and select the For Members tab you will find my buy suggestions. I show the stock name, the ticket symbol, and the suggested amount of shares to buy.  I also show a brief description that will explain the nature of the company’s business. You can use the ticket symbol to do personal research on an individual equity. You can do this research right from your online broker. Whatever you buy you can keep tabs of the percentage gain or loss on my web site. If you place an order at the exact same time as I do than our stock purchase prices will match. Most of my equity buy tips are posted on Sunday in the late afternoon. By placing the order that night you will synchronize your stock purchase with mine. The transaction will not go into effect until Monday morning with the opening of the stock market at 9:30 AM.

Every week I update the home page and the portfolio section of my web site www.capitalistwizard.com. On the Portfolio page I update the yearly percentage gain and date of the update. This date will be on Friday after the closing of the stock market on 4pm. The percentage gain will fluctuate from week to week. This percentage shows the profit I have received from my investments in the past year. I back this percentage up by showing my individual stocks and what percentage of gain or loss they have made. One can look at this by clicking on the portfolio tab of my web site. You should place your buy order at the same time as I do. If you do your percentage will match mine. To synchronize your order with mine you just have to make sure that your order is made before the stock market opens at 9:30am the day after I place my stock tip. Both our orders will be filled at the same time so we will both pay the same market price.

Each equity purchase in my portfolio section will show a percentage of profit or loss in the past year. This will be calculated as such. If I purchase a stock for five hundred dollars and I sell it for six hundred dollars I make one hundred dollars profit. This will be a profit of twenty percent. But if I have only owned the stock for one month than it is justifiable to multiply the twenty percent by twelve. This is to calculate twelve months in the year. Then my return will be two hundred and forty percent. If I have owned the stock for two years than it is justifiable to multiply the twenty percent profit by .5% making my return on investment ten percent. Anytime I sell stock I calculate the percentage gain or loss. This percentage will stay the same for a year. When a year is up the percentage for the stock is no longer calculated into my total percentage. This shows an accurate view of one year’s profit. When a stock is sold the money is reinvested in another equity purchase. This purchase will be calculated into the total percentage. For stocks that are still owned the profit percentage will fluctuate from week to week.

There are two other variables that have an effect on the profit percentage for an individual stock. One is an expense and it is the commission fee of buying and selling equities. I pay around ten dollars per transaction. I include this expense when calculating the profit percentage. There are other online brokers that charge less for the transaction commission. The other variable is a profit that is distributed to the stockholder in the form of dividends. For each investment I show dividend payments received in the past year. Each month new dividend payments are recorded while the dividend payments from over a year ago are dropped. When calculating dividends into the profit percentage I figure in the dividends received in the last year and I add this percent to the overall percentage of profit due to equity value.

The investment strategy shown in the web site www.capitalistwizard.com takes advantage of profit taking. Stocks are sold at a profit using stop-loss orders. As long as the stock goes up in value the stop-loss order price is raised. When the order is eventually filled and the stock is sold then profit is guaranteed. When beginning this investment strategy it will be necessary to continue depositing cash in one’s online broker account. After a couple years of investing one runs into a different problem. This is the problem of having too much cash on hand. With all the extra cash available due to profit taking it will become easier to have $1,500 cash available for investment each week. And one will still want to set aside savings each month for investment. But there are times when major corrections in the market will cause lots of stop-loss orders to be filled. This will leave you with lots of extra cash in your online broker account. There are three things I will list for you to do with this extra cash. You can withdraw the cash and spend it. Or you could place the cash into a secure investment in the form of bonds or certificates of deposits. This is a good way to diversify one’s portfolio so that all your assets are not invested in equities. The third thing you can do is deposit this money into a 401K online broker account. In this way you can continue to follow the investment strategy of the web site www.capitalistwizard.com without having to pay taxes on the profits until retirement. You will find a great deal of flexibility in saving options. You still can use your regular cash online broker account for your children’s college fund while still setting aside retirement money in your 401K account. Both accounts will be purchasing equities. There will also be certificate of deposits or bonds reaching maturity. You will have to decide what to do with this cash. My hope is that this article makes investment seem easier.

1 comment:

  1. hey Jim:
    I read this once before and completely forgot what I read, however from our talks and this Blog I have a better understanding of CW strategy for investment. In your Blog you say, "The third thing you can do is deposit this money into a 401K online broker account." Is this a 401K I can open up for my self in a "401K online broker account?" I thought 401K's were offered by one's employer?

    ReplyDelete