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A disciplined investor is:

• Purchasing long term positions.
• Has a time frame of 1-10 years.
• Diversified adequately.
• Collecting income regularly on either dividends or fixed income securities.
• Portfolio is portioned in 80% mid-large cap companies.
• Has holdings with Beta of 1 to 1.8.
• Always looking at changing economic data and taking a step back.

A disciplined trader is…

• Patient.
• Knowledgeable about the companies fundamentals.
• Has followed the companies traded in for months and is comfortable understanding the daily price fluctuations of shares.
• Has a strong understanding of what all the basic chart tools suggest about price and trend.
• Is always aware of market conditions.
• Has built strong efficient positions by timing purchases.
• Always understands the risks in any trade they decide to make.

Being a disciplined investor or trader, is above all the most important aspect of trading or investing… Hands down, next to knowing whats happening in financial markets – being disciplined in your approach and strategy is the only way to succeed. Trading or Investing.

Quick Look At Market Conditions.

Is your portfolio:

• Still diversified?
• Working towards your benchmarks?
• Should any of your positions be eliminated or sold?
• Should any positions be rotated into another, better performing sector or company?
• Are technical indicators and trends stable?
• Have conditions in the broader market changed?
• Have the fundamentals maintained your expectations?

When ever your money is active in the market, you should keep these questions in mind. Perhaps every so often take a step back and evaluate your positions again, and make any changes to keep your portfolio on track to success.

Disciplined Methodology.

Taking A Step Back. 

Chart Tools & Basic Technical Analysis. 

Rules of Thumb (Investing).

Volatility (Trading).

• Apple Inc (AAPL) – Technology industry
• SPDR Dow Jones Industrial Average ETF (DIA) – Index ETF covering all industries
• Buffalo Wild Wings (BWLD) – Food & beverage industry
• Gold ETF (GLD) – ETF that reflects the price movement of gold
• Ford Motors (F) – Automobile industry
• J.P. Morgan Chase (JPM) – Financial services industry

… your portfolio would be considered diversified. Because the portfolio holds a wide arrange of companies and ETF’s from various industries, we are well protected against uncertainties in the market. If the supply of chicken wings radically declines increasing the price that Buffalo Wild Wings (BWLD) has to pay for it’s wings, and BWLD falls 15%… our portfolio will not lose 15%, as the other holdings will off set the losses of the specific company.

A poorly diversified portfolio, is a portfolio which does not hold positions in multiple industries. Holding a portfolio of…

• Goldman Sachs (GS) – financial services industry
• Bank of America (BAC) – financial services industry
• Citigroup (C) – financial services industry
• J.P. Morgan Chase (JPM) – financial services industry
• Apple Inc (AAPL) – technology industry

… If your portfolio was designed this way, and something happens which causes banks to lose 10% over night you will be hurting very badly – as all of your holdings are in the financial services industry. Apple Inc will not be able to off set all the losses on the banks, and will seriously hurt your portfolio.

So it is best to be diversified and hold companies across multiple industries or sectors. Being diversified will reduce the risk of enduring or taking on large losses and is highly recommended for investors.

Volatility (Investing).