Shawn Radford, 38
Includes Apple Inc., TD Bank, Painted Pony Petroleum Ltd., Dollar Tree Inc. and Legacy Oil and Gas Inc.
Shawn Radford was once a mutual fund salesperson. One thing he didn't like about the job was telling investors to "hold on" while their positions dropped 30 per cent or more.
He next pursued a doctorate in communications and started a career in education. In his spare time, he researched and tried out investment strategies. This led to the "buy the rise" approach that he now uses, and expounds upon at investinthemarkets.com.
The investment approach
"My approach is similar to a Labradoodle," says Mr. Radford. "It's a crossover strategy designed to get the best out of preserving capital, minimizing risk and maximizing returns."
Fundamental analysis is first used to identify strong companies. Key selection criteria are "low debt levels, increasing revenues and significant growth potential."
Technical analysis is then used to identify entry and exit points. Specifically, share prices and trading volumes are scanned for opportunities to "buy the rise," meaning a stock is bought when its price and volume data show an increase above predetermined thresholds.
Buying the dip is to be avoided, as momentum is likely to carry the price down further. The goal is to preserve capital by buying stocks with strength, as their momentum is likely to keep the price going up after purchase.
He follows a "staggered selling" strategy, taking profits with two or three sell orders as a stock climbs. To further control risk, "every buy order should be accompanied by two stop-loss orders," a tight one for half the position and a looser one for the other half.
The screening for entry and exit points is not very demanding. Time spent, according to Mr. Radford, is less than 10 minutes in the evenings and less than half an hour on the weekends.
"Breaking free from the buy-and-hold philosophy, which can really punish investors during bear markets, or if the company deteriorates."
"Following a friend into wheat futures without doing enough research.…"
"Learn to trade on paper." But be careful doing this during a bull market – you might end up thinking it's easier than it is.
"The reality is you can't time the exact bottoms and tops of the markets, but you can catch them on the way up and avoid holding positions as they fall."
Special to The Globe and Mail
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