Investment strategy, enter the stock when it is going up

Investment strategy , buy stock close to high

How many times you are tempted to buy your favorite stock when it falls suddenly or when it makes new 52 week low? I wish you are the lucky one, did you check the probability of making money from this strategy but don't forgot to consider the cases when it did not work.

How many times someone mentioned the stock which is doing very good and you are convinced about the stock prospect but kept on waiting for it to fall and stock keep on making new high? Try to recollect all missed opportunity like this? Do you regret your decision to wait on the sideline?

How many times you enter the stock when it touched 52 week high first time? If you can recollect any such opportunity, how was your return including the one where you lost money?

Don't we think that stock should fall from the day it is in our radar and should go up from the day we buy it? But market has mind of its on and most of the time it did not listen to us, at least for me.

We are small investor and can not dictate the price of a stock, instead we are receiver of the price set by large investors. Hence i suggest if we try to follow the market and buy the stock on the uptrend , in other words the one making new high. This strategy looks dangerous and it can be if below principles are not followed.  Here are few rules which should be always kept in mind before following this strategy.

1. Don't touch stocks outside S&P 500
2. Company market capital should be more than 10B
3. Company should be growing (even if it slow) since last couple of years
4. At the best try to enter the market during market correction rather than stock correction
5. Sell on first big fall in the stock price after you entered in it.

Also keep record of all your investments made by using this strategy and compare investment returns of all such investment with benchmark at least every quarter.

Based on stock on the go principles i have identified few stocks below, which are less volatile and i bet will outperform S&P by good margin in the next one year. These are quality stocks with solid business model, making new high also less volatile. Latest price are closing price as of 08/01/2016.


90

Symbol	Company	Latest Price	Target
DLR	Digital Realty Trust, Inc.	106.68	120
NOC	Northrop Grumman Corp.	216.69	250
AWK	Americal Water Works Company Inc.	82.24	90
AVGO	Broadcom Ltd	163.51	200
RAI	Reynolds American Inc	49.84	58

DLR is engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. This is a very attractive space to be in, as demand for data centers is growing everyday.

NOC is a security company, provides systems, products, and solutions in aerospace, electronics, information systems, and technical service areas to government and commercial customers worldwide. Defence is a very safe space to be in and NOC is able to perform better than LMT, which speaks of its strength.

AWK through its subsidiaries, provides water and wastewater services in the United States and Canada. Company is operating in niche area and i can say it is a very safe bet because chances of them going out of business is almost nil.

AVGO designs, develops, and supplies a range of analog and digital semiconductor connectivity solutions. Its product portfolio comprises broadband access and modems, enterprise and network processors, wireless infrastructure, wireless connectivity, Ethernet communication and switching, and set-top box and media processors. Company has good exposure to developing countries in Asia which is growing fast in networking.

RAI through its subsidiaries, manufactures, and sells cigarettes and other tobacco products in the United States. Their business is growing steadily and stock too .

All above stocks are low risk and good return choices. To achieve the target price one might have to hold at least for one year.