Stocks for college planning?

nj2011mom
Wed, 05 Oct 2011 13:28:31 +0000

Another truism in the market is ‘never fall in love with your portfolio’. You should always have a target price where you sell (take your losses & move on or cash in gains). I don’t believe in dollar cost averaging a stock on its way down.

I’ve also found when you hear bad news, especially anything that hints of accounting fraud, it’s better to sell first, then ask questions. I remember when the Parmalat scandel hit many years ago - my firms held some and I said ‘sell’ and the portfolio manager wanted more info. We took a bit hit.

The Peter Lynch school of investing is also good guide - buy what you know & like. He loved Dunkin Donuts coffee, so he bought the stock. If you can monitor company performance ‘on the ground’, you are in much better shape than someone who sits in an ivory tower. I don’t get the quants who simply buy based on chart movement - my first question is ‘how does the company make money?’.