The Etcaetera Portfolio And Guide To Investing
My work is backed up by a real-time portfolio!
Welcome to my Stock Picking World! This is the backstage of Etcaetera. My step by step guide for you to dive into the magical world of stock picking.
1. First and foremost: know yourself.
Try and answer these simple questions (not an exhaustive list, but that will help you profile yourself):
Why do I want to invest in stocks? Hint: the only acceptable answer is “I have cash on the side that I won’t need in the next 5 years.”
What is my risk appetite? This depends on a number of factors: am I investing for a house downpayment in 10 years? Am I trying to beat inflation to save for my retirement in 20 years? I probably won’t ever need the cash so I will just try to “get rich or die trying”? What amount of loss could start affecting either my sleep or my family’s subsistence?
2. Write down every idea you hear. There is no dumb guess - some are risky, others are riskier.
Jim Cramer says something on TV - write it down. Your friend tells you about an amazing stock - write it down. Your local newspaper mentioned a promising IPO1 - write it down. But do your own research. Take the time to analyze those stocks. Don’t FOMO in. If they are supposed to rise in the next couple of years, then you have time to research. If you fear you might miss the train and the stock will stop rising - why would you get in in the first place?
There are lots and lots of ways to analyze a stock. Take your time to check everything, in particular: healthy and growing financials, reliable management team, share buybacks and dividends, the company’s competitive advantage (the moat), the political and regulatory risks, etc.
3. Try to visualize your investing portfolio 5-10 years from now. How do you reach the goals set in point (1) with the research from point (2)?
Are the stocks you picked in line with the project you are investing for? Are those stocks the most likely to help you in achieving your goals? Remember, your favorite holding time should ideally be forever. Make sure to invest in companies that you feel comfortable to your share your life (savings & time) with.
4. Challenge your knowledge daily but your investment decisions as rarely as possible.
Keep learning. And most importantly unlearning. What you learnt may be wrong. So it is important to always have access to educational resources and to take the time to acknowledge that you don’t know everything. And in the meantime, touch your investing portfolio the least possible. Make only well thought and well prepared investment decisions. If you reached a decision within one day - chances are it is not a wise one. Taking weeks for a decision that will impact you for years is perfectly normal. If you fear you will miss the boat; don’t worry, there is always another one around the corner in the stock market. Be disciplined. Don’t panic. You will be fine.
If you made it this far reading, thank you for that. I will show you how it looks on my side now.
This is my final investment decisions summary . Everyone has his and her own format and preference. There should be a large amount of columns (Excel or mental!). I cannot show you all of them (I un-zoomed to the maximum already!) but analyzing a stock and preparing your portfolio takes many factors into account. If you apply the ones I mentioned above, you did already 90% of the way. ;-)
And here you can consult for free my real-time portfolio on eToro (you don’t need an account):
Disclaimer: Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
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Happy Investing!
Your Etcaetera
Akim
Initial Public Offering: when a company’s stock is made available for public trading for the first time.