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No. of Recommendations: 7
Marc, I'm glad you came to visit!

Given these extraordinary times of volatility, would it still be wise to jump in now? My hunch is yes because if the question were asked on March 23rd, I like to think it would have been a no brainer to start. But today is May 31st.

Wrong! On March 23rd you had no idea what would happen by May 31st. A few days after March 23rd I commented that it looked like a bottom and that the bottom might be retested. It hasn't been retested yet. I've been watching the socio-economic developments triggered by covid-19 and I'm convinced that we are in the middle of a gigantic paradigm shift with winners and losers. Creative destruction in action. I've posted about it at Saul's (May 7)

The Covid-19 tripod: EVBG, TDOC, ZM
https://boards.fool.com/the-covid-19-tripod-evbg-tdoc-zm-344...

If I'm right then this new paradigm should run for well over a decade but the stock market is not an escalator to financial heaven, expect lots of turbulence, lots of volatility.


If you would dive right in, what would your strategy be? I'm not requesting specific stock advice. I can do that research on my own, but would you follow the TMF suggestion of 15-20 stocks immediately or carefully select 5 for example that could weather a storm if we do see a 2nd wave pandemic drop, but still outperform the market in the future if that wave never comes?

This is the question I wanted to answer and the answer starts with "it depends." Are you planning to be self directed or are you planning to follow a leader like one of TMF's paid services? One is as valid as the other and I have done both at different times.

But the starting point lies elsewhere. World renowned investors and speculators have warned against investing in stock tips. The reasoning is quite simple. You don't know if the tipster will be around when it's time to sell. Worse, should the stock tank, if you don't know the stock's story you have no basis to hold or sell and more than likely you'll go into panic mode and sell, just to be safe. Since volatility is the norm, the chances of screwing up are pretty good. If the paid service you use does not have periodic buy and sell recommendations then it's mostly stock tips you are getting.

If you use a service, don't second guess them. Either use the service or find another one you like better. If they suggest 15-20 stocks bought in two or three tranches, do it their way. Make sure they have good exit strategies. As far as I know, Saul parted ways with TMF because they didn't have exit strategies for some stocks like 3D printing and natural gas diesel engines.

If you are self directed then you must first of all discover the story behind your selected stocks, one at a time. Naturally this leads to investing a bit at a time as you find the stories that are worth investing in. Whether to buy a full position at once or to buy in tranches is a toss-up. It works quite well with value stocks that grow slowly. With growth stock, I think less well but in five years time it won't matter much with real growth stocks.

I hope that helps and I'm happy to answer questions.

Denny Schlesinger
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