Do Not Diversify
Concentrate your Portfolio instead
https://youtu.be/H3Q8a9imiFs
"Diversification is a protection against ignorance"
"We think diversification as practiced generally makes very little sense for anyone that knows what they are doing"
"We like to put a lot of money in stocks we strongly feel about"
By. Mr. Warren E. Buffett (CEO of Berkshire Hathaway)
There were 19 stocks that I had listed in my post of November 3rd (6 weeks ago) that were showing signs of institutional support. Most of them have been consolidating and trending along the 10 day sma(simple moving average) since than. In my post of last Sunday Dec 8th, I identified the ideal buy point for each of those stocks. These were not recommendations. I was pointing them out to share my expertise to help you practice with your virtual account. These buy points are early entries for a small test position to identify true leading Growth Stocks that perform better than the leading Growth Stock index $QQQ. 10 of those 19 stocks triggered a buy order last week. Here are the results of the performance of those 10 stocks as compared to $QQQ.
- $ALGT +5.50%
- $AMKR +6.14%
- $IPHI +7.02%
- $MKSI +1.49%
- $ORLY +0.11%
- $ROCK +0.15%
- $TPX +3.46%
- $BLD -0.98%
- $OLED -0.95%
- $RNG -1.10%
- $QQQ +1.02%
Professional money managers that run hedge funds, pension funds and mutual funds, often underperform the general market as measured by the performance of the $SPY. Retail investors that concentrate their portfolio to a few leading growth stocks have a better chance of out performing the leading growth stock index $QQQ.
The top 3 stocks mentioned above did 6 times better on an average than the $QQQ. If you owned these 10 stocks, you ought to close out the losing positions first and use the proceeds to accumulate more shares of the top winning stocks. They have already proved their worth by massively Out Performing the Growth Index. According to IBD(Investors Business Daily), if you have a portfolio of $250,000, you should have a portfolio of no more than 6 stocks to begin with. The way to profit in the market is to concentrate your portfolio to just a few stocks. You are reducing the risk by owning just a few stocks. The more stocks you own, the more you are exposed to the risk of exposure to a wide range of stocks.
Happy Trading!
Amin
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