How I Almost Doubled Stock Market Investments in 1 Year

I sold at the end of 2011 To help cover expenses and free up more time for Linux consulting work. With a modest amount of money and since we still had no portfolio/debt other than a credit card, I decided with my wife that I wanted us to invest in the stock market. We wanted to convert a modest amount into a more significant amount over a period of 4-5 years. In exactly one year, we have almost doubled our money. This way…

I opened a stock market trading account with ShareBuilder (about $10 per trade). Then I spent over 3 months looking at the market, planning and discussing investment opportunities with my wife before investing a single penny. My plan was to invest about 50% in low-risk/low-yield stocks and the rest in a mix of medium to high-yield/risk stocks that I knew well. With more exposure it was important that I chose wisely so I did a lot of homework to come up with “my choice”. In the end, I made it mandatory that I give at least 3 solid reasons for each high-risk stock as why I was convinced going against general market advice on these troubled companies.

Share Market

List of shares I bought a year ago…

The first 50% of the funds were split between these 3 low-risk stocks:

As you can tell based on the current share prices of these stocks they performed really well as a group. These are solid companies that all offer dividends, two of which (MCD and BMY) offer high-yield dividends in excess of 4%.

I split the next 50% of our funds between these 4 medium to high risk stocks:

As you can see Sprint and AOL more than double in price! The general sentiment for S, BAC and AOL was to sell or hold and certainly not to buy. I have many reasons why I chose those 4. Also, I am extremely familiar with Sprint, AOL and Cisco. As far as Bank of America is concerned, I invested there for slightly different reasons than the other 3. Combined with my work and experience in wireless and telecommunications, this made me less concerned about my reasoning behind investing in Sprint and more confident that the stock would pay off.

Here’s a good read.

One major factor that prompted me to jump into the stock market was all the negativity about Obama and his recovery plan. I believed that things were changing for the better and that’s why I put money on it. This has left many investment opportunities open longer than usual due to the mass media’s focus on negativity.

Note, the Dow Jones Industrial Average and Standard & Poor’s 500-stock index just closed at five-year highs just last week! So although we should always approach the US and world stock markets very carefully, read the numbers, statistics and facts because there are a lot of false negatives out there!

Read also (PDF),

Here’s a quick example Negative tone from US news and media vs UK media vs a UK based articles,

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