Method for choosing non-core short hold (not trading) stocks/ETFs

Discussion in 'Shares & Funds' started by d3outguncom, 1st Nov, 2020.

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  1. d3outguncom

    d3outguncom Well-Known Member

    Joined:
    8th Mar, 2020
    Posts:
    449
    Location:
    Sydney
    Firstly, thanks to everyone in these forums who this year lead us to our first non-property investments (we put 80% of our non-mortgage offset funds into a 50/50 split VAS and VGS with DRP). We would never have even known about ETFs and which to choose were it not for the generous sharing of the regulars on this forum.

    So, onto the next part of our strategy - creating a system for choosing shorter timeframe trades for the other 20%. We are not looking to become day traders. We are not looking to become microcap speculators. We are looking for the systems people use to educate ourselves on how people who "tilt" as you guys have called it individual stocks, or ETFs, that they trade when profit targets are reached, or let ride with rising stop losses.

    To show the kind of investment we are prepared to make in our education before acting, we invested 6 months reading every post for the last 2 years on ETFs on these forums, posting questions ourselves, and engaging with a few of you, and testing our assumptions before we made the plunge with comfort. We could have got into VAS and VGS at lower entry price in March/April, feeling confident was more important.

    In regards to our "tilt", from again reading 2 years worth of posts on trading ETFs and individual non-microcap stock picks (outside our risk profile), we would focus on what industries we know, which are technology and education. When you look at ETFs like ACDC or TECH, or individual stocks like Afterpay (my background is tech companies, I would not be a good mining investor), investing half of our 20% tilt in these (with stop losses, that we would lift as prices rise above profit targets) would have provided a significant boost to our total return.

    The real question of this post is this: There are 300 stocks on the ASX 300 followed by VAS. If you wanted to pick a couple to watch to have a "tilt" on, what process would you follow? From what I gather from posts here, it might look something like - Pick the ones in the industry you know (tech), track news about financial position (I am very comfortable doing financial analysis), set growth targets and dividend payout, look at crossover points for MAs and set buying trigger points and stop losses. Please understand, I have never done this before, and the the above description sounds like I have no idea what I am doing, then that what this post is about - where does someone who may have no idea what they are doing start to know what they are doing?

    Of course, there will be a number of you who will look at this (I've seen the cartoon) who will say this is the typical path for someone getting into share investing - try to outperform, lose money, realise you are playing against career experts and robots, buy more VAS and VGS and DRP.

    For those of you who do have a "tilt", would love to get a head start on the method of shortlisting who to track, and what kinds of systems are used to determine entry and exit positions. Thanks in advance.