One thing you will learn in investing is that nothing is ever absolute and that rules are made to be broken. With that said, I’ve been giving a lot of thought as to what stocks to buy this year and my previous declaration to use the Dogs of the Dow strategy.
As I get closer to actually making a purchase, I’m starting to reconsider my initial plan and may have an alternative solution that would make more sense. Here’s is where my mind is at:
It’s a new year and I’m optimistic that new opportunities are out there. In keeping with that enthusiasm, I’d like to add a few more individual stocks to my portfolio.
Traditionally, I stick with mutual funds to stay diversified, keep my costs down, and avoid the turbulence of the market. However, last year I had a great time with Apple (AAPL) (up 26% from my initial purchase) and I’m hoping I can use the same care and attention to pick another winner.
Going After Dividends
As part of my ongoing initiative to add passive income streams, I’ve decided that my next set of stocks should be dividend stocks. There are a lot of reasons why to look at dividend stocks for my next purchase:
Just admit it. You do it. I do it too. I’m talking about reading a book with reasonable advice and then never acting on any of it. Not even for a test run. It’s not that we’re lazy or not smart enough to carry it through. It’s just that for some reason it’s really hard to make that leap of faith and act on what we know we should be doing.
Well, there’s always a time to start.
This summer, I read the book “The Big Secret for the Small Investor” by Joel Greenblatt because I was interested in stepping up my stock picking game. If you’d like to read my book review, click here.
In Part “A” of Greenblatt’s “Big Secret” plan, he concludes that:
Personality. Sarcasm. Normally I don’t use entertaining words to describe personal finance books, but this one embodies those qualities.
In this very brief read by Joel Greenblatt (an investment company owner and professor at the Columbia Business School), Greenblatt colorfully lays out his arguments and foundation for his two part (A and B) investment plan which he refers to as his “Big Secret”.
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