Have you dealt with the daunting task of handpicking best stocks to buy lately? We all have.
I am an avid fan of Mr. Bogle for his acumen to make index fund investing as a surefire path to prosperity. I’ve found an equally impressive friend, Jim Collins, who does an incredible job of simplifying investment puzzle for all of us. It was none other than Jim who recently commented on the original article I wrote about the best stocks to buy in early February.
He asked me if I wanted to give an update on my rock star portfolio — a fantastic idea!
My portfolio of the best stocks to buy consists of these best of the breed fortune companies — Apple, Google, Bidu, Intuitive Surgical, Chipotle Mexican Grill.
If you invested $10,000($20000 each) in these five companies on February 4th, 2012, your portfolio would have earned 9.9% return year to date , or 13% annualized return. Not bad for a street smart investor to beat most of the so-called expert money managers on the Wall Street.
What to do now?
I believe that there is no room for emotions and ego when it comes to investment success. I’ve made lots of mistakes. The key is to be aware about your goal — to make money in the market.
With that said, I normally invest more money into stock that is performing better than the average market.
Yes, it may sound insidious to you, but I average up!
I think the underlying fundamentals of these stocks are still as valid as they were in February. These are the best stocks to buy in my opinion. Nonetheless, street smart approach is to evaluate industry changes and its impact on the supply and demand for each investment.
Chipotle Mexican Grill has not performed as well of lately due to food pricing and its heavy dependency on organic growers. Bidu still enjoys Google like power in China, but it has lagged the market mainly due to slowing Chinese economy and competitive pressure from another search engine.
A recent article in USA today claims that soaring knee surgeries — knee replacement surgeries has soared 161.5% among Medicare participants in the past 20 years — propel demand for the revolutionary Da Vinci Robotic surgery equipment from Intuitive Surgical. Indeed, ISRG will benefit from growing baby boomer population in the years to come.
Apple and Google are revolutionary companies. They both command leading market share in their respective industry. What makes America such a wonderful land is these entrepreneurs who are visionary.
Ford and General Electric revolutionized our world in early 1900’s. Microsoft and Cisco revolutionized the computer industry in the late 1980’s. Now, in the new millennium, Apple and Google are seeing each other as the nemesis, but both companies have changed the world in a big way. How else can you find sixty years old and a seven years old sitting side by side in an Apple store to surf web using a new iPad? The transformation is real and incredible.
I have articulated my thoughts on how I picked these best stocks to buy in this article. I keep investing in the company as long as those fundamentals remain valid.
You should invest only a part of your portfolio into equities. It’s important to invest in an Index fund to protect and grow your capital for the retirement.
Beware of those who preach you to buy stocks for life. It’s a great idea to hold your stock investment as long as you are passionate about it and do your due diligence. It’s no different from investing your capital in any other investment you may have.
Every investment is good only when it makes money for you. With that said, I don’t think daily price movement ought to make or break your mind about any investment. They key is to keep doing research on your own by knowing as much about any company you invest in.
Remember, you are not investing in a stock; you are investing in a company.
Readers: How do you invest? Do you have a strategy to pick best stocks for above average return? Let’s talk.
Stocks — Part X: What if Vanguard gets Nuked? @ Jlcollinsnh
The Average Rate of Return isn’t what You Really Earn @ Work Save Live
Pros and Cons of Investing in the Stock Market Today @ Modest Money
Why I’m Wary of Stocks @ My Money Counselor
How to Read and Evaluate Basic Stock Matrics @ My Money Design
Disclaimer: These are solely my own viewpoints. You should not follow my advice unless you have done your own research. I don’t guarantee that you will make money with these recommendations in the future.
Photo by: Cornell University Library