My 3-Guard Combo Stock Market Investing/Trading Strategy

After sharing my stock market investing/soft trading strategies to the readers of Fitz Villafuerte’s latest blog post “Are You an Investor or a Trader? A Simple Test To Find Out“, I thought I should share them to my readers as well.

But before I do that, let me just emphasize once more the difference between an investor and a trader, as defined so clearly by Fitz like the crystal pristine waters of the South Pacific Ocean.

According to Fitz,

Investing is long-term, which means you buy, hold and sell after several years or even decades.

Trading is short-term, which means you buy and then sell only after a few days, weeks or months.

My Stock Market Investing (and Trading) Strategies

For Filipino basketball-loving fans (especially the Barangay Ginebra), the three-guard combo attack that Ginebra imposes as an offensive threat has been a crunchtime trademark of this SMC franchise.

The trio of the Fast (Jayjay Helterbrand), The Furious (Mark Caguioa), and whoever the third guard is (previously The Fearless, Cool Cat, and now Tenyente Tenorio) would shake the heavens out of its opponent once they run the court like wild horses.

ginebra-burgerking (11)

So much for the poor analogy.

As Fitz mentioned in his blog post, there are so many people who do not know the difference between investing and trading. To explain once more, trading is short term while investing is long term.

Personally, I’m doing the three-strategy combo in my stock market investing/trading since 2011 for my 6 companies.

1) Strategy 1:The Fearless – These first 2 companies are my favorite stocks with great fundamentals dedicated for long-term investing. I don’t care whether the market is up or down, I just keep on buying these two great companies. It’s the mighty, old, yet reliable cost averaging method. (Purpose:Raise my Retirement Fund)

2) Strategy 2: The Furious – And then I do cost-averaging-cum-value investing cross-breed strategy called strategic averaging method (SAM) for my next 3 companies. SAM is a modified version of cost averaging strategy where you buy below prices and continue to buy until target price is hit, in which you sell everything.  In my case, the combination of my 3 SAM companies constantly change as I sell one or two of them upon reaching the target price. (Purpose: To raise funds for a planned business in a couple of years)

3) Strategy 3: The Fast – And finally, I allocate one slot in my portfolio for active trading. I hold on to it for 4 to 6 weeks. Although sometimes i tend to get crazy and dabble on day-trading. (Purpose-To Party! :P )

The last two strategies have been very effective for me so far while I expect my 2 favorite fearless companies to grow at their biggest potentials and support my finances upon my retirement years.

How about you? Can you share your wealth-building strategies in the stock market to our readers? Post your comment below so that more people will learn from your wisdom. :)

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Photo credit: mdc100