There was a recent
concerning whether it's best for a
trader to concentrate all efforts on a single strategy -
in an effort to become an expert trader using that
method - or expand one's knowledge, allowing for
It's a difficult question. There is no doubt that the
expert can expect to perform better for longs
stretches. However, no single strategy works forever.
It also runs into seasons when it is ineffective. It's
important to have other bows in the quiver.
A similar decision applies to investment clubs. For
example, when selecting stocks, is it best to assign
members, on a rotating basis to do some research in an
effort to find a recommendation as the clubs next
Or would it be better to try to develop some expertise
in the club and assign a specific industry to each of
several members. That way each member can make a timely
report, only when one is necessary.
How is this for an idea for your club: Have a small
committee constantly working on each current position,
looking for clues that it is no longer worthy of
remaining in your club's portfolio. Perhaps there's a
warning of slowing growth. Perhaps the P/E has moved
too high, and there's risk of a price reversal. I'm not
telling you to time the markets, but selling a holding
when it no longer appropriate to hold is just smart
Your club: Everyone's an expert in a specific area, or
do you all play equal and diversified roles?
Mark D Wolfinger