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As investors wait out this continuing consolidation in gold and
in the natural resource shares we suggest taking the time to dress up your
portfolio.
All of us like to get a 'new dress' from time to time. What we
are talking about is putting a new face on your portfolio and making some
tough decisions in preparation for the next move up.
Women will no doubt warm to this idea faster than men as women
are know to be shoppers and looking for that new dress, shoes or accessories
to spice up their wardrobes.
Men on the other hand are probably more likely to wear the same
old suits and ties, for months and years with very few additions to their
wardrobe.
We
understand that change is difficult for many investors, however, it is
essential, to revisit your portfolio from time to time and re-evaluate your
holdings.
Ask
these questions:
- Why do you
own each position in your portfolio?
- Are the
shares performing as you want?
- Would you
buy the shares today, if you did not already own them?
This sounds rather elementary but it will make you think and
evaluate the reasons for your continuing interest in holding each position.
All of us have some dead wood in our portfolio which should
probably be sold but making this decision is never easy. We should try and
distance ourselves from our portfolio, be objective and ask tough questions
of ourselves. Why? There must be some reason I bought this dog? What is it?
We find this experience invigorating as we always find some
shares which we decide to sell and thus we free up some new monies which we
can now use to establish new positions.
This week we were fortunate to have two stocks we follow
announce mergers. Both companies jumped immediately on the news and we
alerted subscribers to take profits. This is the best situation possible as
we made great gains, in one case, in excess of 300% and now have cash
available for that 'new dress', i.e. a new position to be added to our
portfolio.
We encourage you to perform this review on a regular basis,
perhaps every month or every 3 months. You will get better at making
decisions and slim down your portfolio to those positions in which you are
more secure and confident in the future performance of the share price.
As you have new capital to invest we suggest considering
alternative investment strategies to spice up your portfolio. Like that 'new
dress' you will need shoes, jewelry, etc. to make your new outfit complete.
Why not do this to your portfolio?
Depending upon your investment time horizon and tolerance for
risk, consider adding some call options, LEAPS or long term warrants which
are available on natural resource companies which you really like. This will
give you some leverage and could greatly increase your gains on the next up
leg in the markets.
For those readers unfamiliar with our services:
- PreciousMetalsWarrants.com
provides an online database for all warrants trading on the natural
resource companies in the United States and Canada.
- InsidersInsights.com
tracks the buying and selling of corporate insiders with a focus on the
junior mining and natural resource sectors. Buy and Sell Alerts are
issued as deemed relevant based upon our analysis.
We encourage all readers to sign up for our free weekly email.
Dudley Baker
PreciousMetalsWarrants
Dudley Baker is
the owner/editor of Precious Metals Warrants, a market data service which
provides you with the details on all mining & energy companies with
warrants trading on the U. S. and Canadian Exchanges.
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