I always strongly advocate that you 1.) Always know what kind of market you are in. It’s a Bull, a Bear, or perhaps transitioning between the two. I always tell folks to 2.) Know precisely what kind of corporate stock it is that you want to buy. And, I’ve made it clear that I am not a trader, but a real investor, and that I look for, and only want to acquire safe-dividend growers for my portfolio. Only a small portion of all of the listed issues on the exchanges begin to meet the criteria of a truly investment-grade, safe-dividend grower. But, I know what I am looking for, and I know how to find mine.
The Third Essential Principle of Successful Stock Market Investing is… to Know When to Buy! Now, granted, if your time horizon is years, decades, a lifetime, or even multi-generational, as mine is; the idea of market timing becomes less important. But, since I am living in the now, and constructing and maintaining this portfolio; and, since I also have a means of measuring market risk, as to whether it would seem to be high or low… I am going to make use of those market-risk measuring tools, and I am going to employ them for the purpose of taking advantage of what look like to me to be the most advantageous opportunities to step-up and acquire shares of those companies that I want in my possession. Make sense?
That being said, I employ some “baker’s dozen” of what are called technical indicators that measure market risk for me. And, as I examine them at this time, they tell me that market risk is presently only moderate, and declining toward that place where, hopefully, soon I will perceive what I will believe to be a good place and time to become a buyer once again. I refer to these as “low-risk market entry opportunities.”
Low-risk market entry opportunities happen, seemingly, at least once each year, and often more than once. It is not at all unusual for there to be two, three, and I have even seen four such opportunities in a years’ time. I believe that patience is an investor’s greatest ally. I believe that patience pays. I possess patience in great abundance. I am sitting and I am waiting.
As I write this, our portfolio is presently almost 13% in cash. With that cash, I know that I can cause our portfolio dividend income to increase by a goodly amount, just as soon as I deploy it for the purpose of accumulating more shares in our favored safe-dividend growers. This simple strategy, worked with this simple discipline, simply works.
Whenever I measure market risk, and I think that it has been all wrung out, I will state my opinion right here, and I will say whether I have become a buyer, or not, rightly or wrongly. With a multi-generational perspective… can I ever truly be wrong?
Here’s to your successful investing?
Harold F Crowell