Wednesday, May 23, 2012

What to do with a "bad" investment 2

I wanted to share a little bit more on portfolio management...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Protection. Safety. Risk control. Notice everything in the video was all about "What can go wrong with this investment? How could I be wrong with my theory that HGT is a good investment?" I want to be in a win win scenario.

So why not put everything into ERF if its so great in the first place and get even better yield? Why bother with diversification? This goes back to why I have done so much research on HGT and ERF and everything I listed in the video.... what if I am wrong? 5 bad events happened leading up to this point (Natural gas price drop, oil price drop, 3 different lawsuits). What if I am wrong a 6th time? Sure the odds are low but this isnt a video game where I can reload my save game and start over. I cannot afford to be wrong and suffer large penalties.

One thing I did not talk about in the video that does need to be mentioned.  I owned HGT for 19 months. I got $1.89 from each $20 share. That certainly helps on recouping some of the loss and taking some of the sting out of the drop. I got 9.5% of my original money back before the share price drops. I didn't have to sell to get that.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

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