Don’t Be Swayed, Stick With Your Plan

Once you have an investment plan, a solid, proven winner for an investment plan; it is important, if not critical that you stick with it.

A good plan is just like preparing dinner:

• Figure out what you want
o Stocks, ETFs or funds
• Check the ingredients
o Which group of stocks or funds or ETFs
• Do some research for the best recipe
o Method of Analysis
o Back test to find the best strategies
• Prep time
o How much time do you have to develop your strategies
• Cooking time
o How much time and how often to manage your investments
o Minutes or hours a day or a week or even just monthly

Consistency in an investment plan doesn’t mean buy something until someone dies: you or the stock.

Consistency in an investment plan means developing a plan based on a recognized means of analysis like relative strength momentum or alpha with a variety of tested sell signals and perhaps even a signal for when it is time to take a pause and exit the markets entirely.

If you create a plan with half a dozen different groups and for each group you have two or three strategies you will achieve both diversification and a strong degree of safety.

Now you have an investment plan you can stick with. Why? Because:

• It is based on your personality
• It is formed with your time constraints in mind
• It is aimed directly at your own objectives
• It consists of stocks or ETFs or funds that you are willing to consider (yes you can add more groups whenever you want)
• It has strategies back tested for both buying and selling

It is important in creating your groups to settle on not just one but to have two or three trading/selling strategies for each group. Why?

Experience says that instead of going with just one strategy for each group, narrow your back testing down to two or three strategies. Switching from one strategy to another can be advisable because frequently one will perform better than the other depending upon the economic climate.

One strategy may be better in volatile markets while another, for example, may excel in stable markets. Thus by having a few strategies for each group you don’t have to self-guess what is best in today’s market; your strategies will tell you, plain and simple. And when they tell you what to do, it is a lot easier to stick with your plan and not be swayed by your emotions, the news or your neighbor.

Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana. View his software at: http://www.dynamicinvestorpro.com