Knowing your goals can prevent unnecessary stress over your portfolio
I am often asked: "How often should I be checking my portfolio?" Checking your portfolio too often can bring about unwarranted stress. On the other hand, not checking your holdings enough can lead to missed buy and sell points. The balance of avoiding stress, while capitalizing on opportunities is essential to your success. So, I'll describe a few aspects of the Bowser Game Plan that will assist you in knowing how often it is appropriate to check up on your portfolio.
1. What is your goal?
This is a loaded question, but take a look at the portfolio in question. If you are using the Bowser Game Plan, your goal is more-than-likely longer-term growth. While some of our picks can skyrocket almost immediately, most take time to appreciate. This is not by accident either. In fact, our general rule of thumb is two years to see a stock's true colors.
At the time of recommendations our selections have a track record of financial success. However, because of their low price point (less than $3/share) investors often overlook them. In order to gain more attention, the company must continue to perform well, and some of the time performing well won't cut it... The company must perform wonderfully. Once investors catch on, the share price will take off, but again, that takes time!
As a result, your goal shouldn't be to double your money in a month. That is not only impractical, but it also doesn't fit our strategy.
2. What is your investment strategy?
You strategy needs to match your goal, and vice versa. The Bowser strategy is laid out quite simply in by way of the Game Plan. To summarize this system:
- Buy equal share or dollar amounts of 12 to 18 companies trading for less than $3 a share
- Sell half of your holdings in a particular company once it doubles your purchase price.
- Sell the remainder after the stock drops 25% from its most recent high.
- If the shares drop 50% in value before doubling, or if we recommend to do so in the newsletter, sell all your holdings in the particular company.
Pretty straight forward right?
If you're looking for a company to double, that doesn't happen overnight... At least in most of cases. That is especially true of Bowser recommendations because we recommend legitimate, growing companies, not illiquid, easily-manipulated securities. And, we wouldn't have it any other way. That said, just because appreciation takes time doesn't mean you can forget about your holdings.
3. Do you have any OTC Markets companies in your portfolio?
The reason this is important is because some brokerages do not allow trailing stop orders on over-the-counter companies. We do recommend OTC Markets-listed companies from time-to-time. Because you sometimes cannot set trailing stop orders on your OTC holdings, you might want to keep tabs on them more frequently... For example, checking after the close each day.
Enough already, how often should I check?
With the Bowser Game Plan, you can get away with checking your holdings once a week. Checking weekly allows you to get a feel for how your stocks are moving, without stressing over intraday volatility (price movements throughout the day). After all, every stock fluctuates, but keeping in mind the long-term strategy and focusing on more generalized movements puts daily ups and downs in perspective.
To not miss sell opportunities, be sure that your sell parameters are put in place. We suggest using aforementioned trailing stop orders. For example, go ahead and set your "sell half of your holdings at double your purchase price" parameter as soon as you purchase a stock. That way, if when it hits the sell mark, you won't miss it because you were kicked back not worried about your portfolio. And again, you may not be able to set trailing stop orders on OTC Markets companies. So, be sure to check them once a day or every other day to capitalize on the selling plan.
Of course, you should know your goals and strategy long before you begin investing. "Make money" is simply not a goal. You goals must be specific, measurable, achievable, realistic and timely (S.M.A.R.T.). Then, of course, comes your strategy... The method by which you achieve your SMART goals. We'll talk more on goals and strategies later. For now, know that the Bowser system is long-term (a minimum of two years is what we always say). Therefore, you won't need to look at your holdings every hour that the market is open. Set your sell orders according to the Selling Plan, check your holdings once a week (once a day for OTC holdings) and be patient. Success will come, so don't stress about every little day-to-day movement.
How often do you check your portfolio? Are you using the Game Plan? Answer these questions and ask me some of your own in the comments section below!
The Bowser Report is a monthly financial newsletter that specializes in small stocks trading for $3/share or less. Our goal is to provide the individual investor with relevant information on microcap stocks. Each month, we recommend a new company, provide information on past recommendations and report news surrounding the microcap marketplace.
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Information in this blog post may contain references to past Bowser recommendations. This blog post contains no recommendations, and instead relies on data gathered on past recommendations from sources thought to be reliable.