|
|
|
|
|
|
 |
|
 |
 |
 |
 |
|||||||||||
|
 |
December 15, 2004 Homer: Hi kid. Neighbor: Wow! What a surprise. You never come over to my house Homer. To what do I owe the pleasure? Homer: Well, I was worried about you. Seein' as how your guy Kerry did not get elected and all, and I hadn't seen you for awhile so I guess I just flat missed you badgering me all the time with questions. Neighbor: Gee Homer, thanks! I have been feeling a bit blue over the presidential election. I can't understand it and even though you told me George W was going to win way back in April, I did not believe you. Then boom, he not only wins, he creams Kerry, just like you said he would. I confess to you Homer, I did not do anything you said. I didn't dollar-cost-average my investments like you told me and, in fact, I stopped investing all together. I froze in fear. I was sure that the market was going to crash. I just flat blew it. Homer: Well kid, it's not too late even for hard heads like you. Neighbor: You think? Homer: Yep. But, I want you to do exactly what I am going to tell you. Can you do that? Neighbor: What's it going to cost me? Homer: Not anymore than it already has kid and probably, in the end, you may even thank me for once. Neighbor: Well, I lost a bundle! Homer: You can start with a $1000. If you can start with say $10,000 and then each month thereafter invest $1000, making sure the amount is equally divided in each position each time you invest you will see some interesting results in each of your positions. Neighbor: Position? Homer: Stock kid, an individual stock, ownership in each of the companies you pick. Neighbor: I got it. Homer: That's a first! Neighbor: What? Homer: Nothing kid, just a private joke. Here's what I want. Get on your computer and find the top performing stocks for the past year among the Dow Jones Industrial Average of 30 stocks. Pick the top ten. Number them in order of their sales price growth overall performance for 2004 from number 1 to 10. The number 1 should be the best. From that group, take the top 5 for the last three months and number them in order of performance. Only this time from 1 to 5 with the number 1 stock performer the best and number 5 the least of the group. Since you only have 30 stocks to choose from, this should be easy for you. Neighbor: Then what? Homer: Invest equal amounts into each one, all on the same day. Neighbor: What price? Homer: Buy at market, the price of the stock at the time of your order. Neighbor: That's not the way the pros do it! Homer: You a pro? Neighbor: No. Homer: Then do what I tell ya. Neighbor: Then what? Homer: Invest the same amount each month and monitor your stocks to assure they stay in the top 5. When one is no longer there, sell the entire individual stock position and replace it with one that has worked its way into the top 5 with the money you receive from the sale of the loser. Do not spread the money around from the sale to the other 4 stocks. Put all the money only into the new top 5 stock. Then continue to keep investing equal amounts of money each month, preferably at or near the same day each and every month with money amounts equally divided into all the 5 positions. Continue to monitor and sell and buy as necessary repeating this pattern over and over. The key is to be consistent and to be vigilant. Neighbor: You're talking about trading! Homer: That's one way of looking at it. Another is that what this formula does is to insure that your portfolio only has the top performing stocks in it all the time. Which would you rather have -- A portfolio that is relying solely on dollar-cost-averaging or one that relies on always having the top performing stocks and dollar-cost-averaging to make it grow? Neighbor: So can I make money doing this? Homer: About eight million dollars over a 10 to 15 year period the last time I checked. It could be more, could be less but the formula works and for you kid you can have fun and make money at the same time. Don't deviate, don't get distracted by the latest hottie out there and be consistent. And, above all kid, don't bend the rules and you will get where you want to go a lot faster. I don't care if you or anyone else is a 20 or 60 something when they start. In 10 to 15 years you and they can be a multimillionaire - just like that! Neighbor: No way! Homer: I think the response you kids use today is - WAY! My gift to you kid. Merry Christmas! EDITORS NOTE: Homer wishes to extend his personal Happy Holidays and a most prosperous and successful New Year's greeting to all of his fans worldwide. |
|
|||||||||||
|
505-396-4416
info@cefe.org |
|
Privacy Statement
|
||||||||||||
 |
 |
 |
 |
|||||||||||
 |
 |
 |
