Welp it’s not quiet a comeback y’all but I’m back. The terms of my employment prevent me from investing outside the firm and I can’t offer specific advice on individual trades but I can talk about broad market aspects and financial strategy. Which means…… HERE I AM!!! Charles has graciously consented to allowing me to blog I’m not sure how often I’ll post don’t wanna push the envelope too much with “The Man”, but whenever I have something relevant to say you will here it! And here’s my first thoughts below.
I’ve been investing now for a dozen years; 12 years personally and about 5 years professionally so I think I’m versed enough to offer this perspective. If you are only investing in the big names you not truly investing to seek true financial change and freedom. Now don’t get me wrong, the 30 big Dow companies and the blue chip stocks have their place. Truthfully they are the stabilizing core of the equities market. But they are meant to be the anchors not your investing center pieces.
There’s a reason that the Dow 30 and the blue-chip stocks are so heavily respected; on average the age of these companies about 50 years old. They are ingrained in the fabric of the Wall Street culture and history. But what makes them most reliable is they are not as vulnerable to huge losses and market hysteria. They often provide steady increase of your capital and might even pay a healthy dividend for your support. Which is why they should be apart of everyone portfolio as the cornerstone but not the central figure.
The goal of most people investing is the steady increase of the funds over time or the rapid increase over a short period with the big score. The big names offers the latter but often time by the time you’ve acquired shares on the market their most excessive rapid profit giving days have come and gone. They no longer are risky enough of investments that if they strike gold your investment will have a 10, 20, 30, or even a 100x return. And this is the focus of my statement.
Also present within your portfolio is the forgotten, the ignored, the small names but more often than no the unknown! These will be your small cap companies(companies with $1B market cap and under), the ones you have to search for. Not that the information isn’t available their just not as visible as others. I learned this years ago by watching famed former hedge fund manager Jim Cramer. Cramer never just focused on the big knows when providing insight on how to make his viewers money he considered the whole market.
And with like anything else on the market there are indexes that play this sector in mentions. The Russell 1000 index is an index that gives you broad exposure to these small cap potential blockbusters I’m referencing here. Among its listing you’ll find hundreds little know corporations that you begin research and discover if this calculated risk suits your investing strategy. Of course not all these securities will fit you but if you devote time to reviewing them over the next several weeks I guaranteed you’ll find at least one gem among the offerings.
Jamaal W. Vetose