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I don’t normally talk about my 100% Letter advisory service here in the Daily Profit. But I’m going to make an exception today.
Because I want to share three simple investing strategies that can help growth investors bang out consistent profits. These investing strategies are so easy to implement it seems hardly worth the space to write them down.
But they’re incredibly effective.
If you check out the service you’ll see that we’ve locked in 5 “doubles” in the first 6 months of 2014, in large part due to consistent implementation of these three strategies. Not every investment has been a winner of course (our “win” ratio is 75% since 2012). But we are winning far more often than we are losing.
3 Excellent Investing Strategies
First, invest in small cap stocks. Not with all of your money of course, but certainly some of it (usually 10% to 30% of your portfolio makes sense). Why? Because these guys can move the needle in your portfolio – a few examples of how much in just a second.
Second, average into positions. It decreases risk, but also allows you to buy riskier stocks that you might balk at if you were planning a bigger “all at once” investment. You have to have skin in the game in order to make money, and averaging in helps you get involved.
And third, average out of positions. You can lock in a profit on part of a position to reduce your risk and exposure, and let the rest of your investment ride. We tend to do this after we’ve doubled our money so the remaining investment is pure profit. The original capital can be invested elsewhere. This investing strategy also helps you diversify your holdings.
These investing strategies have helped us have a phenomenal year so far in 2014.
On January 18 we locked in a 109.2% return with semiconductor specialist Ambarella (NASDAQ:AMBA). It took just 4 months to get that return. Then on February 21 we locked in a 100% return on African oil explorer Taipan Resources (TPN.V), (OTC:TAIPF). That one took longer – a full 9 months.
On March 21, we had another double with biotech stock Endocyte (NASDAQ:ECYT), selling half of our position for a 114.5% gain. From open to close that trade took 7 months. And on May 7, we locked in a 228% gain with our remaining stake in convenience store operator Susser Holdings (NYSE:SUSS). This one had been in the works since early 2012.
Then just this Monday we locked in our 5th double of the year with Texas-based oil explorer and producer Diamondback Energy (NASDAQ:FANG). FANG has been rising, along with many oil stocks, due to global factors driving up the price of oil. But there were also specific catalysts that led this stock to rise faster than the field – most of them related to good real estate and rising production resulting from horizontal drilling.
We averaged into all of these small cap positions and have averaged out too – we still hold three as “Free Rides” in our portfolio – Diamondback Energy, Taipan Resources and Ambarella.
As you might expect, I’m not pounding the table for investors to go out and buy shares of FANG, AMBA and TPN.V right now since I’ve already advised 100% Letter subscribers to sell half of their position in these stocks.
But we do have 8 positions in the portfolio that are recommended “buys” right now, and which I believe have legitimate chances to double in value over the next 18 months. We’re currently averaging into these positions. You can learn more about this service here if you are interested.
And if you’re not, you should still give these three simple investing strategies a shot. Over the long-term they’re sure to help you achieve higher returns in your portfolio.