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One style vs many styles

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January 24, 2011 – Comments (4)

Do you capsters employ many strategies or just one in your portfolio?  When I say just one, I don't mean not to diversify across sectors.

I mean, some people choose a bunch of low p/e stocks, while some choose a bunch of good companies, while some choose stocks they expect to do good given the economic climate, while some choose ones with favorable charts.

Do you all pick one strategy and stick with it, or choose multiple?  The advantages of sticking with one is you get really good at it, and some are contradictory.  For instance, choosing solid companies generally means investing in medium to high p/e stocks, which is contradictory to the low p/e strategy.  The disadvantage is that you have less opportunities to take advantage of, and your style could go out of favor.

4 Comments – Post Your Own

#1) On January 24, 2011 at 11:00 PM, Valyooo (99.47) wrote:

Good point.

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#2) On January 24, 2011 at 11:03 PM, jemsa (< 20) wrote:

I use multiple strategies, but all are quantitative and all are value based.  Some are based on dividend yield and sustainable dividends.  Some are based on low pe and  high roe.  Some our based on multiple valuation factors.  Some look for out of favor stocks that are risky - but so downtrodden that they will pop on any good news.  The reason I use multiple strategies is that each strategy shines at different times.  The result is that the performance of a multi strategy portfolio is more consistent.

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#3) On January 25, 2011 at 3:01 AM, awallejr (77.67) wrote:

I employ different strategies.  I maintain a "core" holding ( 50%)of conservative, steady growth companies that pay a decent dividend.  That is half my portfolio.  I put another 25% into higher yielding stocks (MLPS, BDCS, REITS).  The remaining 25% I will put into speculative stocks, non-yielding growth stocks, or option plays.

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#4) On January 25, 2011 at 6:54 PM, anticitrade (99.66) wrote:

Everytime I get burned on a stock I review it to determine what strategy could have prevented me from buying that stock in the first place.  When possible, I try to implement that new strategy into my model...  I think too much focus on any one metric is problematic..  You stocks that appear most undervalued by your methodology have been highly discounted by the very legitimate methodology that you have ignored. 

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