Last night (May 11) my investment club met. Let me explain what an investment club is, just in case you don't know. Investment Club YenoM is made up of 14 individuals that contribute various amounts (from $25 to $100) each month and then we meet to determine stocks to buy and sell. We use software designed by IClubCentral to keep track of how much each of us own. It works just like a mutual fund with two exceptions. We only value the stocks once per month (a mutual fund does it daily) and the club members make investment decisions (a mutual pays big bucks for others to make the decisions).
We have a well defined portfolio management process with 7 separate criteria.
Last night we decided to sell 1/2 of our position in Lowes (LOW) and purchase a similar amount of Fastenal (FAST).
We decided to sell Lowes for 3 reasons: 1) our projection for the future return was lower than any other stock in the portfolio 2) it is a large cap stock and we have too large a percentage of our stocks in large cap and 3) sales growth projection was too low.
We decded to buy Fastenal for 3 reasons: 1) it is a mid cap stock and we need more mid cap 2) our projection for 5 year return put it in what we call the "sweet spot" and will raise overall portfolio return and 3) sales growth is 13% which will raise the oveall portfolio sales growth.
We had an new person join the club, welcome Irene and one visitor.
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