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Thursday, December 16, 2010

Portfolio Management Decisions ?

"There are always ... possibilities" - Mr. Spock

Well, Coca-Cola (KO) went ahead and popped above $65.00 a share as I thought it would. Some have asked me if I will now sell Coca-Cola (KO) as I did with McDonalds (MCD). Well, let me just say this ... McDonalds (MCD) was a great long, but a different set of circumstances. There are more things to do than simply "buy" or "sell" when it comes to investing.

Coca-Cola (KO)
Daily Chart

To date, I've been setting a little cash aside to dollar cost average more on the stocks held like Johnson & Johnson (JNJ) and Coca-Cola (KO) ... correct? Now add to that point, the fact that the dividend investing 'sister' account is a little short on cash from a maintenance standpoint.

It looks a little something like this from the last listing of the Challenge Project:

-$26.45 of this cash I reserve for 'maneuvering' capital ( 2.624 % )
-$13.00 of this cash I reserve to D.C.A. KO ( 1.29 % )

-$24.00 of this cash I reserve to D.C.A. JNJ ( 2.381 % )
-This leaves $220.00 cash available for a new purchase ( 21.82% )

And like this for "Airelon's Challenge Chronicles" ...

-$110.00 of this cash I reserve for 'maneuvering' capital (8.1%)
-$ 62.00 of this cash I reserve to D.C.A. KO ( 4.565% )

-$ 72.00 of this cash I reserve to D.C.A. JNJ ( 5.302% )
-$ 70.00 of this cash I reserve to D.C.A. GIS ( 5.154% )

-This leaves $10.75 cash available for a new purchase ( 0.7916% )

So ... what I'm thinking is this: If Coca-Cola (KO) maintains this break out above $65.00 (in other words, a headfake doesn't manifest itself), then I'll decrease the amount being held in reserve to dollar cost average Coca-Cola (KO). By how much will I reduce the reserve? We'll have to see when the time comes to make that decision. Where else will I then weight that cash for? Again, we'll have to see when the time comes to make that decision.

Portfolio management is a game of chess. Some liken it to poker. It's not just about 'buy or sell'. It's also how you 'stack your chips' as it were, or 'pre-position your pieces'.

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Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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