Capital Preservation

I'm feeling quite pleased with the progress I've made in my short investing career.

As I'm able to look back on it now, I began investing a year and a half ago, about six months before the start of one of the worst bear markets in history.  Despite that I've only lost 26% of my capital, just under 20% annualized.

Yes, I said 'only 26%.'  I lost the majority of this money my first six to nine months trading, and by the time I started to figure things out a bit the market had really gone bad.  In spite of this I'm still positive on my trading activity this year, the loss in my account is due to the cost of materials for the IBD services I subscribe to.  They are expensive, and it hurts to shell out the money when we're in a prolonged bear market, but I believe in the long run, they will be well worth the price.

Additionally, my trading account has outperformed my IRA mutual fund account as of this week.  Now, that's a rather ignanimous accomplishment on the one hand - it came about as the stock market has swooned to five year lows.  However, this does not change the fact that I've been in cash in my trading account, which preserved capital and has as of this moment led me to out-perform my mutual funds - even including my cost of research materials.  I've reached my goal of outperforming the professionals, now I need to do so to the plus side in the next bull run!

As far as the market is concerned, my watchlist has been whittled down each day this week and the last of the stocks on it were damaged today.  I will, as always, continue to watch the market for a turn but for now it looks like there's more to work through before we put in a solid bottom.  This is a good time to catch up on some reading.  I've almost completed 'The Successful Investor' and then I want to begin 'Trade Your Way to Financial Freedom.'

As time allows, I'd also like to make use of another interest I have and try to develop a program to track information on the stocks I purchase.  I'm not exactly sure what I want it to look like yet - which makes it difficult to get started - but I'd like to have something that will allow me to store data and get percentages on what characteristics my best trades share.

-Geoff