Friday, September 14, 2012

Patience

My wife and I both work for organizations that pay employee salaries on a bi-weekly schedule, and as luck would have it, the pay schedules of our respective employers differ by exactly one week.  This means that every Friday we have fresh income flowing into our accounts.

Since we paid off the mortgage last year, we made the decision to use my wife's salary to cover our living expenses, and mine for long-term savings and investment.  Therefore, every other Friday the brokerage account has new cash ready to be put to use.

Since purchasing our first round of stocks back in mid-July, I've looked forward to these "investment Fridays" as opportunities to add to the dividend portfolio.  And so far I've found ample options for investing -- until today.

I don't know if it's because I'm getting pickier, or if subconsciously I'm wary that the recent run-up in stock prices can only be followed by a corresponding drop (even though I'm trying to stay disciplined to  avoid market timing), but despite spending ample time reading and researching over the past couple of weeks, I'm not sure exactly what to do with the latest influx of cash.  I'm torn between "doubling down" one one or more of our holdings which have lagged recently (like INTC), or opening a new position in a high-quality security at current market prices, in the name of additional diversification (since our portfolio is somewhat unbalanced at the moment).

I have really been enjoying reading blogs about personal finance in general and dividend growth investing in particular as of late.  There is so much to learn -- it's like embarking on a new adventure.

One thing I want to brush up on is an exit strategy that I'm comfortable with.  There are a number of "when to sell a dividend growth stock" articles out there, each with its own set of recommendations.  I want to settle on some personal guidelines for how to handle various scenarios, especially a large run-up or drop-off in the value of one of our holdings.  As of late there have been quite a few unrealized gains in our investments.  It's tempting to want to pull some of that cash out and diversify into another opportunity, but it seems like so many companies are hitting 52-week highs these days that I fear I'd be exchanging one high-flyer for another.

For now I'll be patient.  Meanwhile, I'll continue to learn as much as I can to try to be ready for opportunities for new investment when they present themselves.

2 comments:

  1. I agree that things are looking a little frothy here, although stocks may continue to rise. I just know that regardless of the overall market, usually there is something cheap to buy if you look around. This week, however, I was also really struggling to find something I wanted to buy at a good price.

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  2. Darvas just trailed a stop loss on every share he ever bought...seems a good risk control strategy to me...

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