Revisiting Your Portfolio Strategies

By John P. Reese

Stock screening helps you identify companies with strong fundamentals you might have otherwise overlooked. Perhaps just as importantly, stock screening helps you make buy and sell decisions quantitatively instead of relying on your emotions. However, stock screening isn’t a silver bullet to investing. There are some very important tasks that stock screens don’t help you with, such as how long to hold a stock, how many stocks to hold, how trading costs will impact your returns and how to maintain sufficient diversification. In the article Going From Stock Screen to a Real Portfolio, investment adviser John Reese presents a guide on how to incorporate your screening finds into your actual portfolio.

Reading this article will help you:

• Choose which stock screen(s) to follow
• Manage the risk of your stock portfolio
• Decide when it’s time to rebalance your portfolio
• Deal with sharp declines in the prices of stocks you own
• Know when to sell a stock, even if it hasn’t hit a stop-loss trigger

If you are interested in turning a quantitative stock screen into a real-life portfolio, let this article serve as your guide.

By Donald Cassidy

An investor over time attaches some validity to their initial price objective, meaning that modifying that expectation becomes difficult for reasons totally contained only between one’s ears. But stocks go where they want to, despite what any participants think is justified and despite what investors might wish would happen. Investors unable or unwilling to let go of original price opinions are doomed to lose, either through losses in positions that never come back, and/or from better opportunities elsewhere that have been lost. In the article, How to Set and Revise Realistic Price Targets for Your Stocks, Donald Cassidy discusses how selling-price targets should be based on logical analysis and subject to change.

Some of the topics covered in the article include:

• The three elements that your stock price objectives should have
• Factoring technical analysis into selling targets
• When and how to reconsider a price objective

Sale-price targets must be in mind, and written down, from the outset—otherwise there is no focus and no discipline. But those targets must be written in pencil because both general and company-specific circumstances will almost always change. As Cassidy states in this article, keep in mind the critical question that you should be asking yourself when on the fence about reconsidering price objectives: “If I did not own this stock already, would I buy it today, knowing what I (and the market) do now, at the current price?”