Choosing Boats (Symbols)

There are terms like "fundamentals" and "speculating" and strategies like "value investing" and "technical trading" that guide investor decision making but whatever your strategy, choosing the right boats to sail with is critical.

Here's my take on choosing a boat (symbol) to sail (trade) (using 10KTrades terminology: how I choose a "boat" to set sail with.)

I use a combination of several criteria when choosing a "boat" (symbol) to sail with. There are several considerations but, most important to me is the boat's structure and durability - I like boats that pay dividends. I've set out to sea with some terrible symbols and each treacherous voyage with a weak "boat" has been stressful and sometimes painfully expensive.

To determine the "boat's" integrity and reliability I will look at various factors such as:
    • Is the symbol profitable?
    • How much debt does the symbol have?
    • How long has the symbol been in business? (I have generally avoided new boats from new boat builders.)
    • Is the symbol growing?
    • Is the symbol reliable? Is the stock price slow and steady? (I tend to avoid riding in jet boats.)
    • What is the symbol's P/E ratio?
    • What industry or sector is the symbol in? What is the outlook for this sector? Do I have an interest in this sector? Do I already have a boat in this sector?
All of these factors weigh in on boat selection. Once you've selected your boats, you can start focusing on fleet management. And, the easiest way to manage a fleet is to choose an ETF (Exchange-Traded Fund) where the boats have already been chosen for you by professional captains.

Trading Tide Levels (at the time of this log entry):

This is for informational purposes only and the information provided does not encompass all possible or probable outcomes and nothing posted here is an indication of future results. Nothing in this blog is a guarantee or promise of future investment returns and investing in stocks or bonds carries risks including losing your entire investment. I do not recommend, advocate or endorse any third-party links, resources or advertisements of any kind. Any investment decisions are recommended to be in conjunction with a Certified Financial Planner, a comprehensive and personal financial plan and all other components that make up your own financial situation.

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