Taming the Money Sharks: 8 Super-Easy Stock Investment Maxims

Chapter 5

Simple and Effective Portfolio Strategies

Do You Want a Windfall Profit or a Systematic Win?

Do not disproportionally invest in any one stock or asset in one lump sum.

A. Portfolio Planning Guidelines

We all want to make a killing once and for all and then retire. However, this is a dangerous game. Once you concentrate your financial resources toward one single target, the risk of ruining your financial health can be very real indeed.

Temper Your Windfall Profit Desire with Systematic Wins

Throughout my investment years, I have observed all types of investors, from the smallest individual investor to CEOs of large global multinational companies. Whoever can make money consistently would follow a systematic process, some crude and some sophisticated.

Regardless of their methodologies, every year these investors would reliably make money, depending obviously on overall global conditions. Even with a consistent profit of 10–25% per transaction, they would achieve handsome profits by accumulating their “small” wins.

On the other hand, I also have known many bold investors who were always looking for that one-time big win. Obviously, we have all heard those anecdotes about “investment heroes” and “sensational stock gurus” and how they flipped a 100% to a 500% gain in just one deal. Average investors often worship them, dreaming that they will be the next and will earn a fame that could last for another 100 years.

But if you research these “heroes” and the conditions necessary ...