Financial Musings of a Burbank CPA: Letting your investment winners run and protecting your downside Part 3 of 5

This article continues my five part newsletter series I published a couple of  years ago on investments – Letting Your Winners Run and Protecting Your Downside (this stuff never gets old!) Part 3 0f 5 – Asset Allocation and Industry Diversification: When you are investing, an important consideration to minimize losses is to not put too much of your investing capital into any one idea. A good position sizing rule of thumb is to limit each particular investment to 4 to 5 percent maximum of your total investible assets (one exception is if you are in a plan that invests in stock of the company you work for and you have investment options, do not invest more than 10% maximum in your company.) This will limit your risk by spreading it out over a bunch of investments.   Next time in Part 4, I will talk a little bit about trailing stop losses and how they protect you from major portfolio disasters.   For financial,  accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net  Phone: 818-317-6035   Website: www.briantstonercpa.com AWARDED BEST ACCOUNTANT IN BURBANK, CA BY BEST BUSINESSES 2016, 2015 AND 2014! Download My Free App!  (A Kind of Digital Business Card) For Android [...]

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Financial Musings of a Burbank CPA: Letting your investment winners run and protecting your downside Part 2 of 5

This article is the second of a five part newsletter series I published a couple of years ago on investments – Letting Your Winners Run and Protecting Your Downside (this stuff never gets old!) Part 2 0f 5 – Asset Allocation and Industry Diversification: In Part 1 of this 5 part series on general investing we discussed that there are ways to limit losses and let your winners run when you invest your money.   Asset Allocation is the process on investing a certain percentage of your money in different asset classes, the object being that different assets behave differently – some are going up when others are going down. The object of the allocation is that most of the time most of the assets are going up, so the allocation will over time generate positive returns. Allocation classes are normally stocks, bonds, commodities (gold, silver, land, oil, etc) and of course, cash. A lot of the allocation classes can be further broken down (stocks into large, mid and small cap stocks; most catagories into domestic and foreign investments, etc.) It is best to figure out what percentage to allocate to each asset class, maybe at the first of the [...]

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Financial Musings of a Burbank CPA: Letting your investment winners run and protecting your downside Part 1 of 5

First of all – Happy Martin Luther King’s Birthday. Hope you have the day off (my firm has the general policy that the owner doesn’t get holidays off during tax season, which started after my wife’s birthday on January 9th. Oh well.) This article is the first of a five part newsletter series I published a couple of years ago on investments – Letting Your Winners Run and Protecting Your Downside (this stuff never gets old!) Part 1 0f 5 – Investing to protect assets and minimizing losses:  This week I am beginning a five part posting on general investing. I used to have my series 7 and 66 brokerage licenses and have managed my own investment accounts for about 20 years. There are many ways to find stocks, bonds and other assets to invest in – investment newsletters, research services, your brother in law, etc. but the most important item is to protect your investments so that you minimize losses and let your winners run. The old adage of buying low and selling high is so obvious we usually pay it lip service, but it is amazing how many people don’t really follow it. Next in Part 2 I [...]

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