Investing (sounds like) Gambling

With all the down activity in the market the average investor and really all investor needs to realize that investing in the market is like gambling. Spreading out the portfolio in different markets, ETF's, stocks, and bonds is the best way to hedge those bets, but like sitting out a few good hands in blackjack, you will eventually lose some money. Especially if you are not watching your stocks or at least the market. So all that being said I am trying to form my own strategy to protect and grow my own portfolio.

Invest in the long term.

Wanting to not worry about the markets everyday, I am investing in what I see as the best of long term opportunities. In stocks this means perrinial favorites KR and WMT, international smoking company PM, and my only US manufacturer (that is slowly growing in the world market) BEZ. Some of these may be what people consider odd bets but I am looking to solidify things for long term and historically these are good companies and I through my own research I feel as I will be proven right in the long run.

More importantly is my chunk of investment in the Vanguard Total Market ETF (VTI). With it's fair dividend payout (currently 3.5%) and low expense costs, it has some serious potential to make money when the market turns around.

ETF's will be my anchor.

When this year's Roth investment ($5k for 2008) gets put in a majority will be in Vanguard ETF's with decent dividends and low expense fees. I want to get to a 70-30 rule with the 70 being in market ETF's. I will define the others later, but for now I am VTI all the way.

A stock strategy???

I sometimes have written about I have believe I have a knack for finding good stocks but as far as finding a good strategy for keeping, selling, and growing stocks, I lack a strategy. In the past I have hit 20%-30% growth on certain stocks and just let it ride. Let it ride all the way back down (okay not always). My goal is on speculative stocks, not the long term ones listed above, (assuming they go up) that somewhere above 15% growth I may sell off my original investment money wise. Meaning if stock X cost me $1k and is now at $1.5K, I will sell of that $1K of the stock and let the rest ride so to speak. For now that is what I am looking to do, we'll see if it works. I may iron out a few more details before the big Roth investment for 2008, we'll see though.

What else is out there?

I think the current downturn in the economy points to the importance of variety in your own personal portfolio, for me that means stocks, bonds, and interest may not be the only place to store cash. I am probably a year away from having the money for a side venture, but it is my goal to either own some rental property or *a laundromat*. The laundromat is my dream for some day. This year will be a year of ironing out some finances like paying off the car and attempting to get a better mortgage rate.

Should be an interesting year...hedge your bets.