As I continue on my journey of trying to double $10k in the stock market in less than one year, I started thinking; What am I? Investor or Trader? I quickly decided that I am an investor. Why do I think this? The answer is simple; I invest in good companies. When I make a decision to buy a stock it is because it has passed several tests and/or screens. Adhering to a strict criteria for selecting stocks enables me to benefit in several ways.
1) if the stock goes south and I am in a losing position, I dont necessarily have to sell it because I have the security of knowing that the company has solid fundamentals and was under priced to begin with. There is nothing worse than holding some high flyer with questionable fundamentals when it starts a downward trend. You could lose 30, 40, even 50% really fast.
2) a strict criteria reduces the emotion involved when deciding to buy or not to buy a stock.
Start date: 12/12/2011
Starting Account Balance: $10k
Current Account Balance: $12,400