Chapter 6

 

 

 

Chapter six of the Starting and Running a Profitable Investment Club introduces the tools that will help our investment club evaluate and select stocks to include in our portfolio.

 

 

In investing we have three basic tasks:

 

1. Judge a company’s potential value by studying its record. (SCL and SSG)
2. Compare several companies and select the one that best meets our objective. (SCG)
3. Stay current on stocks we own so good decisions can be made about purchasing additional shares, hold, or sell. (PMG and PERT)

 

 

Stock Check List (SCL) - Chapter 7

Allows us to review a company’s sales, earnings records, and price history. It is used to help find suitable candidates for purchase now or in the future.

 

Stock Selection Guide and Report (SSG) - Chapters 8, 9 and 10

Helps us form a judgment of how a company will do in the future by learning facts about a company’s past and look at how it is doing in the present. The SSG is comprised of five sections that will aid in the stock selection process.

 

Stock Comparison Guide (SCG) - Chapter 11

Allows us to compare the same data for several companies. Best results come from comparing companies in the same business/industry.

 

Portfolio Management Guide (PMG) - Chapter 12

Allows us to stay current on the stocks we own. This will help us decide if we should purchase additional shares, hold or sell the shares we currently own.

 

Portfolio Evaluation Review Technique (PERT) – Chapter 13

Along with the Portfolio Management Guide the PERT helps us stay current on the stocks we already own. It allows us to follow up on stocks and re-evaluate the stocks we own using the same criteria we used to purchase them in the first place.

 

 

Successfully using these tools will help us in our selection of stocks and hopefully allow the GenXchange Investment Club to join the 61.9 percent of NAIC clubs that equal or better the S&P 500.

 

 

 

Tim Barroso