One of the dilemmas long term investors may face is, when buying for first time, how much worth of stocks one should buy in a given company. This question is from long term perspective and not for trading approaches. There are few different schools of thought on this issue. In my view, each of the thoughts, methods, and approach is valid depending upon investor’s objective.
One thought says buy at once in one go, because if one has spent time following it, researching it, then why wait for other occasions. The fact that an investor has questions (or doubt), that means this individual has doubts, or not confident about it. One is questioning own analysis. It could be lack of proper understanding of the stock, or lack of research.
We all investors try and maintain a diversified asset allocation in our investments. In my discussions with many folks, I have seen that many use different ways of executing this diversification. Many use combination of real estate, equities, gold, etc. In case of equities, quite a few enterprising ones long term portfolio in combination with trading portfolio. Many of us, including me, are aware of different types of asset class and investment vehicles. Unfortunately, for most of us individual investors, we fail to understand how to execute effectively. We really do not know how to engineer our portfolio such that it has optimum asset allocation for our risk profile. We think we allocate little bit of capital to all assets and we should be good to go without any worries.
Alternative Income Streams
There is a very popular notion of “passive income” that floats around the blog-o-sphere. The essence of passive income is; it is the money earned with or without our involvement. Once it is setup, the recurring income will flow in continuously. In my vocabulary, there is no such thing as passive income. Just because we do not see the effort does not mean it is passive. Instead, I like the term “alternative stream of income”. I am always curious to understand how individuals can create alternative streams of income and how they execute it. Following are few alternatives that I have thought about and tinkered with in recent past.
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