As this somewhat disappointing year for investors ends and yet another new year begins, I'm planning on focusing on, and investing in, fewer and fewer industries. As a result, I plan to concentrate the number of investments in my portfolio rather than diversify them. And that strategy begins with the very first trading day of 2016.
I know all the experts say that diversification spreads out the risks associated with investing, but too much diversification can lead to a wide but shallow portfolio. In 2016 I'm planning on putting more money into fewer positions and concentrate my investing in select industries and companies.
I know I'll still find a lot of great companies to research and invest in, but I think this year I'm going to diversify a little less and concentrate a little more (I know I said this last year but I mean it this year!). I'll still continue to research and write about any new companies I find that pay great dividends and have great estimated one year capital gains, but I'm going to be a little more selective in the ones that I actually end up investing in.
That doesn't mean that the companies I discover won't be worthy of accumulating, it's just that I don't plan to get involved in every company I find. Instead I'm going to attempt to find the "best of breed" in each category and then concentrate on accumulating larger positions in those companies.
The biggest benefit I see in this is that I'll be able to trade a larger number of option contracts on each of my positions while simultaneously reducing my overall trading costs. It can also lead to more trading with slimmer margins and higher probabilities for success. In the end it will mean I can generate a higher monthly income from those derivatives.
I hope this doesn't reduce the number and quality of articles I ultimately write each month but only time will tell. I'm still always on the lookout for new ideas to increase wealth and monthly income. As the new year begins, I wish everyone the best in all of their trading.
The year 2016 is gonna be a great year!
I know all the experts say that diversification spreads out the risks associated with investing, but too much diversification can lead to a wide but shallow portfolio. In 2016 I'm planning on putting more money into fewer positions and concentrate my investing in select industries and companies.
I know I'll still find a lot of great companies to research and invest in, but I think this year I'm going to diversify a little less and concentrate a little more (I know I said this last year but I mean it this year!). I'll still continue to research and write about any new companies I find that pay great dividends and have great estimated one year capital gains, but I'm going to be a little more selective in the ones that I actually end up investing in.
That doesn't mean that the companies I discover won't be worthy of accumulating, it's just that I don't plan to get involved in every company I find. Instead I'm going to attempt to find the "best of breed" in each category and then concentrate on accumulating larger positions in those companies.
The biggest benefit I see in this is that I'll be able to trade a larger number of option contracts on each of my positions while simultaneously reducing my overall trading costs. It can also lead to more trading with slimmer margins and higher probabilities for success. In the end it will mean I can generate a higher monthly income from those derivatives.
I hope this doesn't reduce the number and quality of articles I ultimately write each month but only time will tell. I'm still always on the lookout for new ideas to increase wealth and monthly income. As the new year begins, I wish everyone the best in all of their trading.
The year 2016 is gonna be a great year!
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