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I figured I'd wait until the Fed indicated sufficient intention to assuage the mass's fears, giving the investors the impression that water was to be turning into wine soon, so to speak. Market sentiment can use religion especially during uncertainty. Maybe we'll find our sea legs now long enough for the sizzle stocks to get boiling again.
With the recent volatility and investor uncertainty surrounding the subprime big boys' mess, I waited until I had to convert to stocks to stay within the rules to qualify in this contest. Reading the rules, I'm pretty sure I did that o.k. The good part was with 100% cash, I experienced NO volatility during this period, a definite advantage placing me fairly high in the overall rankings.
So far it hasn't turned out to be too bad a strategy. Simply by delaying getting into stock buys, I preserved my capital through the recent bad weather storms. But that is behind me now and it was time to back up the truck.
I also tended to pick the bulk of my stocks keeping in mind that strong performers bought on pullbacks, and some that just were too strong to even have pulled back much would help to buffer me from further volatility unless things just continue to out-right spiral out of control. Now that there is some pin action happening, I tried to diversify sufficiently to not put too many of my eggs in too few baskets, sector-wise.
I'll use up most of the remaining 25% of my cash selectively. A few stocks I have in mind are RIO, VLO, RIG, Chinese stocks on further pullbacks, alternative energy, and possibly some more financials. RIMM is just infuriating, because it's stayed so strong that now I wish I had simply grabbed some, but it just made me take pause at those nose-bleed levels.
Hind-sight is 20/20 as they say. The future on the other hand is more uncertain and the end is always a cliff's drop away so hopefully I've managed risk in a way that will make me feel good looking back that I preserved the integrity of this million dollars seed money, even if it is only make believe. Staying true to principle can be carried over to my real-world accounts no matter how well I do i the contest ratings.
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