Every game needs rules. And definitely every investment needs rules. Already tried before to act spontaneously and it did not work. Lets start strong this time. Lets build the portfolio with the set of rules and rich grounding investment philosophy. For now we will have 32 investment rules.

It is definitely time for setting the investment philosophy. Inspired by nakedtrader.co.uk here are the founding principles of the investment in this portfolio:

  1. Not to invest in Penny Stocks, or then be ultra careful
  2. Dont catch the Falling Knife – invest in falling stocks – very hard one, so many times have had problems with that
  3. Dont buy after Profit Warning, unless you really know what you are doing
  4. Buy with Spread lower than 5%
  5. No Loss Making Companies
  6. Write down Stop Loss 10-15% and act, if going up, move the stop loss
  7. Plan the exit – set the Target Price
  8. Not more than 8-10 positions open
  9. Do Shorting
  10. Follow 20-30 stocks
  11. Check Ex-Dividend days, buy 6-8 weeks before dividends
  12. Take a complete Break From Trading
  13. Sell On News whatever they are – because it is already included
  14. Tree shaking – share falling by market makers – check the news
  15. T trade: single protected – if share is rising, it is a buy, if falling – sell, O – simple, M – market makers
  16. Look for ideas at newspaper round-ups, investment magazines, ADVFN newswire, toplists
  17. Watch ADVFN – gainers and loosers, breakouts – 52 week breakout, MM market makers buy
  18. Search Steps, avoid head and shoulders
  19. Filter before analyzing: discard AIM or Oflex, loss maker, spread more than 5%, small marker cap, word challenging in the report
  20. Check dividends – raising dividends, then check the chart – if a last year’s chart line is upwards, good signal, company background check: profit, revenues, increasing share price
  21. Directors buy? Insitutions buy? Check website, send an email to a company saying want to attend AGM. Sector? Go Shopping? Bulleting boards: bad sign if there are too much enthusiasm, best – when reasoned, quiet and informed
  22. ADVFN news far way back, google name, news and gossip, search for word dissapointing in the reports, challenging, difficult, positive, favourable, exceeding, profit up, excellent
  23. PE compare with Peers
  24. Dividends would be great to be in a range 3-4%
  25. Future floatations in Investors Chronicle – check!
  26. Director is buying – important if significant amounts
  27. Abnormal volumes and price above – something is happening!
  28. Recoveries: share price stabilize, addressing the problems, steady recovery of the price, statement confidence, new management
  29. Think you are billionare or helicopter view – would you buy the whole company?
  30. Round number – if broken – buy
  31. Spread betting – try using guaranteed stop loss, short term, clear all accounts and go flat, be strict with stop lossses.
  32. Try to build 90% safe, 10% risky portfolio