Trading with the Trend Stock #16

It's been 2 weeks since the last post, so it is definitely time for an update. I'll try to post on this blog every week, but that will not always be possible.

The stocks that this system has generated performed very well during this time. Here is an update on the performance:


It has been 4 months since the first stock in this strategy was selected, and -although getting off to a very poor start- since that time, the average performance has been just over 8%. This strategy is about generating slow and steady wealth, and I feel that is what is beginning to occur now.

An element that I have not mentioned in this blog so far is diversification. Even though a part of me feels that diversification is for wimps, I still think that this strategy can benefit from it. One way that my selection technique diversifies risk is by holding both long and short positions.

This helps reduce risk in that when the markets sells off violently, the type of sell off that affects all stocks, the short positions help mitigate the damage.

In addition, when I select the stocks for this blog, I do now know what product of service the company provides, but I am sure that I am probably getting into companies from many different sectors, which helps to diversify my holdings. I think it would advantageous to spread one's money amongst at least 5 to 10 stocks to help manage risk.

Anyway, here is this week's trending stock: