I want to talk about another way to limit your investment risk besides position sizing and trailing stop losses (I discussed these in an earlier post): asset allocation. If you have 100,000 to invest you don’t want to put it all in gold or all in bonds; you want to allocate it among stocks, bonds, real estate (REITs) commodiities precious metals, etc. The theory is that all these items don’t all go up in value at the same time (and don’t go down at the same time). A correct asset allocation will maximize return while limiting risk. The financial professionals in my website resource section https://briantstonercpa.com/Resources.html can help you with that (we have been fighting over asset allocation for years: not whether to do it, but who does it the best: I always lose for some reason.) This is another way to limit losses and that is the first step to being a successful investor.
Brian’s General Musings
As a postscript to yesterday, My father in law’s eye surgery appeared to go well and I do like my new phone better than the one I lost, so silver linings. Back to work.
Brian’s Tax Musings
Not much to post today. Just remember if you have a corporation, you have to file the return by March 15, although you can extend that date to September 15 by filing form 7004. Today is a crazy day with Dorothy’s Dad having eye surgery. Dorothy has been trying to help me in the office but with her Dad’s medical problems and he not being able to drive, she has been pretty busy. Also last Wenesday I was a dunderhead and lost my phone, and had to go to Verizon and spend 3 hours getting a new one. So last week wasn’t as productive as I would have liked.