Monday, November 4, 2013

Rethink your processes

Today is deposit day for me and as I sat down thinking about it, I thought how its more of a legacy process from my previous blog portfolio and not really needed here. I no longer have to make the decision of trading vs savings vs investing. I no longer have multiple strategies requiring separate funding. Now the deposit goes into investing and savings. No conflicts of interest here and lets be honest, that makes for boring reading on your part.

It does however highlight something I think is important. We regularly review our portfolio and positions to make sure they are still on target with our strategies. Is the capital gains position negative or positive? Is it time to sell it? Is the dividend still covered by company profit? These are obviously important but has other aspects of our investing grown outdated or stale?

What is not done as often is reviewing our processes. What used to work when we started or a year ago may not longer be good enough now. As our skill improves with experience and study we can discard what we no longer need. When I first started out with dividend investing I went straight for yield and payout ratio as my only criteria. My first purchase was PFE and there I ignored payout ratio and went crazy for the yield. Along the way I picked up ideas and improved my process to include the CCC spreadsheet from Why is this important? Without reviewing our processes we run the risk of not completing our goals. If we arent working toward our goals, financial or otherwise, in the best possible way... well then whats the point?

I have two reasons for this blog. One is to improve my own skills and knowledge with investing. I have found this blog to be useful for that. The second is to provide an entertaining read to my readers that might help them with their own investing. Few people enjoy going to and following a boring blog that has the same sort of thing over and over again.
So I am discarding my deposit day update. Upon my review it was not contributing to my two goals.

Disclaimer: The investments and trades discussed 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.


  1. Yes when I first started income investing I went straight for yield as well. Pretty natural I think. Still working on replacing some of those legacy picks that I don't think I'll hold long term. If I plan to hold companies for decades, they ought to be something with an enduring advantage: ie. high quality or a business I can trust. That is one thing I've learned and began implementing last year, though I do hold some speculative companies too. It all stems from reviewing my process and way of thinking like you say.

    As for tracking your deposits: a simple fix is to just add it to your monthly update. Savings and regular contributions will be far more important to your income stream/portfolio than investment returns for the foreseeable future. You may want to rethink abandoning it all together. Heck if writing a post about saving $$ is what motivates you, I say go for it. Do whatever is needed to make it happen and set new records. Us readers will be there cheering you on, we want you to succeed!

    The fun part about following a real money investment blog is watching the author achieve his/her goals, or "pulling themselves up" (get it, haha) if they don't. You can't get that with articles/theory.

    1. Hehe I just read your monthly update and noticed you did post your deposits. I should have read it before posting this comment.