I'm just back from a week's holiday in Adelaide.
Rest, relaxation, family, fine food, log fires and a Saturday night win for my football team at the Adelaide Oval were the highlights.
Of course no trip to Adelaide is complete without a trip to the wineries. Lunch at d'Arenberg was amazing, the Foggo Wines 2007 Old Vine Shiraz being the outstanding wine we tasted (and drank).
It was a great way to ring in the new financial year.
Still, I confess it was nearly as rewarding to see some big gains lately for a couple of my portfolio's largest positions. Nothing can power your portfolio higher, as quickly, as your biggest positions jumping 10% or more in a single day.
One of the stocks is a small Canadian-quoted oil producer called Manitok Energy.
My commitment: I'm going to buy these stocks
Regular readers of this free Motley Fool Take Stock email will know I've been snapping up shares in recent weeks, keen to put some of my cash balances to work, especially in high-yielding stocks.
So far so good, but no fireworks from the new additions. Although I anticipate good things will happen, for now I'm happy to sit back and wait for the dividend cheques to arrive.
Through the beauty of compound returns and the passage of time, the odds are that your biggest winners will be stocks you already own.
Psychologically, I have a hard time adding to my winners. That mental barrier has probably cost me a fortune over the years. It's a barrier I'm determined to overcome.
As the old saying goes, better to water your flowers than your weeds.
Yet the temptation to do the opposite is very strong!
It's tempting to add to your losers, thinking you are getting an even bigger bargain, when in fact the share price may have fallen for very good reason.
A much better strategy is to add to your winners. The market doesn't know, or care, what you first paid for the shares, and neither should you.
Why waiting for a market correction could be a BIG mistake
Overnight, US markets fell from their record highs as the market fretted about the timing of US interest rate rises.
Last week, on exactly the same news, the media was celebrating Dow 17,000, with one pundit in The Australian declaring…
"The market can look attractive at higher numbers."
If that's the case, bring on ASX 6,000… although you may want to get in ahead of the party, on the premise that a cheaper stock is a better buy.
The Australian also reported money managers as saying investors have been "holding back putting new money to work in stocks… for fear of buying near a market peak," with many seemingly waiting for a market correction.
Sorry, Foolish readers. That strategy is not working today, won't work tomorrow, and will never work.
Jim McDonald, chief investment analyst at Northern Trust, is a believer, being quoted in The Australian as saying even at record highs for the Dow…
"We're still favourable on the stockmarket, especially in comparison to other investments."
It's a timely reminder, in case you haven't looked at your term deposits recently, that interest rates are low, and potentially going even lower.
In comparison–as Mr McDonald is effectively saying–give me a fully franked dividend any day.
Market corrections and the occasional market crash will happen, but no-one can predict when they will happen.
I solve the problem in three ways…
1) I'm a regular buyer of stocks.
2) I'll sell if I think a company is significantly over-valued, or I no longer believe the company has a bright future, or if I have found an even better investment.
3) I hold a decent cash balance, especially for those moments when a favourite stock is on sale, or when the market as a whole has one of its periodic wobbles.
The professionals will have you know investing in the stock market is difficult, fraught with danger, and requires the hand-holding of so-called experts.
For that privilege, at best they'll charge you a small fortune. At worst, as we've seen with Storm Financial and Opes Prime, they'll leave you penniless.
As my colleague Morgan Housel writes, investing need not be rocket science.
Buy good quality companies, preferably the dividend paying variety.
Reinvest your dividends.
Top up your winners (as I might be doing in the very near future).
Cut your losers.
It really can be as simple as that.
