Friday, August 27, 2010
My Personal Investing Strategy Ingredients
I have overhauled my stock investing strategy and portfolio to better reflect my environmental and political beliefs and the realities of the current investing market. Investing in what you know and are comfortable with, I still strongly believe, is the way to success. I know the technology and energy sectors and environmental science issues. Intense self education let me shift from my former “buy & hold good undervalued companies” to my current “buy when it’s down and take reasonable profits before it goes farther down”.
Converting the portfolio is an interesting and ongoing process. I developed a list of several hundred companies that fit my criteria. These companies are directly or peripherally involved with: solar power, wind power, geothermal power, “next-generation” nuclear power, fuel cells, batteries, flywheel energy storage, electric vehicles, hydrogen/natural gas vehicles, smart grid, organic agriculture, sustainable aquaculture, water treatment and supply, waste management, and a variety of other earth-friendly fields. There are plenty of companies to choose from in all of the above listed areas. These companies are diversified enough to not leave me vulnerable to a crash of one market sector. These are definitely growth industries on a global scale and are also geographically diversified.
Converting the investing strategy is more difficult, but it is obvious to me that the days of buying shares of a good company at a bargain price and knowing that they would be worth much more in five or ten years is a thing of the past. This is very much a mental adjustment for me. In today’s stock market investors must be light on their feet. Investors must keep well informed about business/investing and larger global issues. Investors, to be successful, cannot become emotionally attached to the companies in which they are investing.
I am benefiting from these changes. I feel good investing in companies that improve the situation for everyone. I am more confident and more successful for specializing in the “green” niche: I can know the companies in greater depth, have a better “feel” of the business issues involved and better see things in context. I was formerly a generalist but now understand the advantages of being more specialized as an investor.