Today, i shall attempt to start something which I had held off doing for some time, though i know that it is good for me.
I will do up my first investment journal entry on a recent stock i bought (just 2 days ago actually.)
Many a times, when I buy a stock, like everyone else, I would expect it to rise for a number of reasons. However, sometime down the road, when the stock price is moving sideways or even downwards, I will start to doubt myself and wonder if this was the right stock to buy in the first place, what if I had bought Y stock instead of X stock, i would have made money, should i sell now etc. But hindsight is always 20/20.
By keeping a journal, I hope it will allow me to be more committed to my positions and allow me to learn from my mistakes and hopefully able to replicate my wins! Writing the thought process behind buying a particular stock will allow me to understand and more importantly remember the reasons / motivations behind my decisions further down the road as well. And hopefully, I will emerge a better informed investor, by knowing more about my very own investment decisions.
Before going any further, I just wish to share I am more of a (lazy) fundamental investor. As much as I wish to learn more about Technical Analysis and all their modelling, I have not found the time to do so and it just seemed pretty overwhelming to me, so I will probably never ever learn it. Therefore, my stock analysis might seem pretty primitive to some. But to me simple is good and well... simple enough for me. 😁 Lastly, I am also a long term (>5 years) investors, simply because no one can predict the market in the short term, but in the long run, the trend is usually upward, so the longer the term, the better your odds of making profits.
And also because of this, it is also unlikely I will buy an obscure undervalued stock and watch it magically reach for the moon (not within a short time frame anyway). No doubt there are plenty of such multi-baggers in small / micro / med cap stocks, but I feel they are simply too high risk for me and I prefer to avoid them.
Disclaimer: While I enjoy picking stocks, I try as much as possible to avoid buying individual stocks as I am a believer in passive broad market tracking ETFs, so while I pick stocks, they do not form a majority of my portfolio. But sometimes, I gotta admit picking stock is just more exciting than ETFs. 💥
So my considerations when picking a stock actually just comprises a simple SWOT analysis and also a look at their profit margins, P/E, P/B, ROE as compared to their peers to decide if they are fairly priced at the point in time.
Given I am only starting my first stock journal entry, there might be further refinements to the above considerations. But without further ado, lets go to my next entry!
Feeling excited for my next post!
Frugal Singa
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