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Entrepreneur’s investments guided by economic trends

Larry Dembinski, 56

Occupation

Entrepreneur

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The portfolio

Long-term positions include shares in Enbridge Inc., Inter Pipeline Ltd., Royal Bank of Canada, Atlantic Power Corp., National Bank of Greece, JPMorgan Chase & Co., Chevron Corp., Johnson & Johnson and Apple Inc.

The investor

Since the 1980s, Larry Dembinski has run "a number of small businesses from soup and sandwich to construction." In pursuit of his lifelong "passion for investing," he now runs investorecho.com, a social network website for investors.

How he invests

"I am an active trader and love it," Mr. Dembinski says. In addition to investing in stocks for the long term, he trades stocks on the basis of momentum, seasonal patterns and news.

"My approach to investing and trading begins with the economy, primarily GDP and employment numbers from the U.S., but also Europe and Asia," he adds. Basically, if the economy and employment are showing signs of deterioration, he minimizes exposure to stocks; otherwise, he'll "stay diversified and cautious," or, with improving data, venture into economically sensitive sectors such as consumer discretionary, industrials and materials.

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He uses seasonal analysis as a guide to what typically performs best for when he is buying stocks. "For example, seasonality points to specific investments like gold stocks in early summer, and oil in early winter," Mr. Dembinski says.

In his opinion, quantitative easing in the United States "is artificially stimulating markets." For this reason, he has been picking up value stocks for long-term holds, rather than "momentum stocks at 52-week highs."

He acquired Atlantic Power shares in early August as a value and seasonal play on utilities. Another purchase, in October, was National Bank of Greece stock, for value and momentum reasons.

Best move

"My best move was noticing a slowdown in the economy back in the fall of 2007. I began selling poorer performing stocks, wound down a construction company by March of 2008, and sold the rest of my stocks by April of 2008."

Worst move

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He has, on occasion, lost more than 50 per cent on individual trades and now uses stop-loss orders to limit losses to 10 to 12 per cent.

Advice

"Pay attention to the economy. Leave your emotions out of investing. Do not be afraid to sell losers or hang onto winners."

Want to share your strategies? E-mail mccolumn@yahoo.com

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