Low risk trading strategies for stocks I

Theory

Posted by GRY on October 28, 2018

The basic idea of the investment strategy is that the stock with a cash dividend rate of more than 4% at the current price can be regarded as the same type of asset. By buying and selling profits, distributing dividends, and obtaining cash from personal income, the company will continuously purchase and accumulate the asset until personal financial freedom.

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The minimum annual return of the investment strategy is 4%. The maximum return can be more than double. Individuals feel that the risk is relatively low.

  • I.Part of the capital to buy stocks, it can be locked, such as the target price after selling, do long-term investment.

  • II.Another part of the funds, the selected stocks to continue to buy low and sell high operations, earn trading profits, do short - term investment.

1. calculate the amount of money available for the investment strategy:

  • I.Calculate the cash in your hand first, and then call it cash in hand.

  • II.Calculate personal or family monthly expenses, which will be referred to as monthly expenses, and set aside 6 months ‘monthly expense funds;

  • III.The amount of money available for this investment strategy = holding cash - monthly expense X 6.

2. After calculating the amount of money available for investment, divide it into two parts directly:

A.half of the cash, buy the financial products with capital preservation, deposit and withdrawal and return of 4%+, such as money fund, T + 0 financial management, etc.
B.the other half of cash, buy several stocks with stable dividend and current price cash dividend rate of more than 4%, and conduct fund rotation among multiple stocks.

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There are five types of stock fund rotation:

  • I.A goes up and B goes down and sells A and buys B;

  • II.When stock B goes up and stock A goes down, sell stock B and buy stock A;

  • III.When stocks A and B both fall, buy A and B on the cash/financing position.

  • IV.When stocks A and B rise, they sell A and B at the same time, and the proceeds are deposited into cash wealth management products.

  • V.After the stock distribution cash dividend, buy down and the cash dividend rate is still above 4%;

3. Next, figure out why the minimum annualized return on the investment strategy is 4%.

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A.Here are the prerequisites for achieving an annualized return of 4% on the investment strategy:
  • I.Always keep cash, the best proportion is to maintain about 50 percent, the cash must buy annual over 4 percent of the financial products;

  • II.The cash dividend rate of the purchase price of the stock must be more than 4%.

  • III.For every sale of a stock, the selling price is at least 1% higher than the corresponding buying price.

And then the investment strategy, a key idea:

Only when the stock is sold at a price lower than the purchase price, it will be recorded as a loss. Its book loss is not recorded as a loss.

B. Shares in dividends after dividend dividend dividend removal

The stock price will fall after the dividend is removed, thus making the book of the stock bought before showing a loss, but we do not need to pay attention to this loss. Except for the reason that the stock mentioned above is only accounted for as a loss when it is sold below the purchase price, another reason is as follows:

  • I.When we buy a stock, the purchase price corresponds to a cash dividend yield of more than 4%;

  • II.Share dividends can be paid more than 4 percent of the purchase principal in cash.

  • III.And cash financial products to get more than 4 percent of cash earnings, at least to hold more than a year;

  • IV.We can completely cash dividends of more than 4 percent of the stock, as a fixed term financial products. After dividends are paid, wait another year. When the price is higher than the purchase price, then decide whether to sell.

In conclusion, stock funds and cash, and the lowest annualized yield of 4%.

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Combined with the investment strategy of a single stock fund trading operation can gain 1%+ profit, and after the stock is sold, the probability is to buy another stock with a cash dividend rate of 4%+.

At this point, the trading profit will increase the book cash, and the book cash can continue to buy stock assets.

Add up, and the annualized return on the entire fund should be more than 4 percent, and the minimum annual return must be 4 percent.

If the stock market is on the market, it’s a big chance to double the stock.

It is important to note that that investment policy require individuals to be able to adhere to the rule, survive and hold the stock, and do not sell the stock below the buy price because of fear or other reasons, if it cannot be done without a good gain.

4. Summary

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If you have the following stock investment philosophy:

  • I.Unable to accept the minimum annualized return of about 4%, expecting higher returns;

  • II.Loss on the book of funds for a purchase operation is unacceptable;

  • III.Do not fall more and more buy, control fear, a little loss to sell;

IV.Can not do more and more sales, control greed, a little profit is not willing to sell.

Then, the investment strategy that USES this low risk to buy and sell a stock certainly cannot make money, suggest according to oneself investment idea seeks more suitable investment strategy, or oneself summarize a set of investment strategy.