Investing Strategies - How My Own Strategies Have Evolved Over The Years

Investing Strategies - How My Own Strategies Have Evolved Over The Years

I have been investing in stocks for several years now, and first started as soon as I had a few thousand put aside in my early 20s. Unfortunately I lost virtually all of this money in the next couple of years, but I'm glad I did because it taught me some valuable lessons and helped me to evolve as an investor.

Right at the beginning I had a very modest income coming in, so I saw stock market investing as a way of making some serious money. Therefore I automatically excluded all of the mid and large-cap stocks and looked for the next big thing amongst the tiddlers.

I figured that it was simply not worth looking for gains of say 10-15% every year, because with the amounts of money I was investing it would hardly be worth it. Instead I wanted to find stocks that could multi-bag over the next couple of years.

Lots of investors do this and some may be lucky enough to find one that really takes off. However the failure rate amongst these smaller companies is so high, and it is exceptionally difficult to find winning stocks. I unfortunately managed to lose lots of money investing in a few high risk technology companies who joined this long list of failures.

This didn't necessarily put me off, however, because as soon as I had saved up some money, I was back again. This time I put it all into a really small property company. However three years later it had still not gone anywhere so I sold it for a small loss.

Eventually I had built up a nice amount of money elsewhere and decided I was only going to invest in mid and large cap stocks, and ideally those that pay dividends. This was a big turning point for me because I was suddenly making consistent profits.

I started scrutinising financial accounts and thinking about solid long term investments, and now look for companies with sustained earnings and dividend growth. I have a few different strategies, both long term and short term, but the point is that I will not go near any companies that are the slightest bit risky.

I found that you can make excellent profits each year just by investing in boring long term growth stocks. Plus if you use technical analysis, you can also make some excellent profits taking short term positions in these stocks as well.

So the point is that I knew I had to evolve as an investor if I was serious about making money from the stock market. My old strategies were just not good enough, and were far too risky. So if you find that you could be doing a lot better yourself, I suggest you analyze your trading history and see where you are going wrong. You may find that one simple change could make a big difference to your overall results.

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