Stock Investments in the US

And yet another way to invest. My personal experience has been an average annualized return of approximately 18% in the last 18 months! That may not be impressive considering the S&P did almost equally well between July 2006 and Feb 2007. Anyway, here's the approach which I am hoping would serve to just about beat the S&P 500 indexed fund. If you don't have the patience for even some basic stock research, just put your funds into the S&P 500 indexed fund and go back to your hammock!

Filtering strategy:
(1) Pick only large and mega-cap stocks (i.e. $5 billion plus market cap)
(2) Focus only on those trading within 5% of 52-week lows, and maybe at least 20% below 52 week high
(3) Forget all the detailed calculations, just eyeball the trajectory of the stock price (straight line is fine) in the last 5 years - if current price falls below the trajectory, stay interested in the stock.
Sufficient resources: http://finance.yahoo.com/charts or http://finance.google.com


Buying strategy:
- Prefer the somewhat "boring" companies - (e.g. In 2006 - go for companies like 3M, Wrigley's, Bausch & Lomb) over the more "exciting" companies - (e.g. In 2006 - both Yahoo and Ebay touched some new lows)
- Accept that you can't predict the bottom; so buy once, OR at the most twice while the stock is going down, not more than that.
- Do take forward P/E into account; anything more than 20, and it may not be worth bothering
- Comparison with competitors: Just eyeball the price graphs over the last 5-10 years, and compare the forward P/E of both companies.

Selling strategy:
- Don't bother selling at a loss unless you are certain this is a sinking ship; stay on AT LEAST for 18 months; after that, up to you to decide one way or the other.
- If you ever go past the profit margin of 10%, just go ahead sell the stock. Are you asking why? Well ask yourself - if you weren't owning this stock, would you have bought it? If your answer is NO, and you've already realized a 5-10% profit, just plain get out of the stock.

Hope this helps! And yeah, I know you're looking for some stock picks, so won't disappoint you on that:

Example stocks to buy as of March 2 2007:
Safer ones:
- Sanofi-Aventis (SNY) @ $42
- Amgen (AMGN) @ $62

Yeahh.. the riskier ones, but for those that don't lose sleep along with money:
- SanDisk (SNDK) @ $38
- AMD (AMD) @ $ 14-15
- Micron (MU) @ $12