IT Contractors Money – IT Contractor Investors
How do you turn IT Contractors Money earned into even more money?
As we’ve said before, IT Contractors tend to invest in the Stock Market just before it heads south.
So, at the same time as they are out of work in an economic downturn, their Stock Market assets are tumbling in price.
We’ve also said that the way round this is to build a cash safety net before investing in the Stock Market and to invest regularly on a long-term basis.
Making Money
But how do IT Contractors go about making money out of it.
One thing to note is that buying is the easy bit. Selling is the hard bit.
However, there are certain disciplines that we have followed both in this share portfolio and in our other share buying activity.
All the shares in our portfolio have one thing in common and that is they have either delivered profits beyond the market analyst’s expectations or have made an announcement to the Stock Market that their profits will be above or well above market expectations.
These shares tend to do well.
Good Companies
If the company are doing even better than expected then it means that they are well-managed or have really good products or are in a sector that is doing very well – or, more likely a combination of all three.
The share prices of the companies don’t necessarily go up straight away so we always give them six months.
It’s best that you’re not buying and selling shares all the time.
If you are you are giving a lot of commission to the brokers and that cuts your margins.
When To Sell
I tend to hang onto them till I see that they are not performing as expected (which rarely happens) or until they announce that profits will be less than expected or produce profits that are lower than analyst estimates.
If you want to be even more picky then you could drop them after several periods when they have just met market expectations and not exceeded them.
After all there are plenty more companies out there who are beating expectations that you could re-invest the money in.
Ruthless
You must be ruthless though and sell on a downgrade.
Once a downgrade has been announced the price will have fallen a bit before you get to hear about it.
However, don’t wait for a hoped for bounce to get out.
Get out straight away.
Not Wise
As Jim Slater once said the average Stock Market punter does the opposite of what he or she should do.
If they have got a portfolio of shares, what they tend to do is sell the ones that they have made money on and hang onto those that they are losing money on.
That way they end up with a portfolio of dud shares.
They should indeed do the opposite.
They should hang on to the good ones that they are making money on as they are likely to make more money from these well run, well-managed companies in a good area of the market, in the future.
It’s the duds they should dump.
Every Three Months
You should sit down every three months and list your shares.
You tell yourself that you are going to sell the worst one or two depending on how many you have.
If you have 10 different shares I would say that two have to be relegated every three months.
List your shares and then put the percentage chance you think you have of doubling your money in them over the next year.
The two at the bottom should then be sold – automatically.
No Regrets
You seldom regret doing this.
The two shares that you think are the best will almost always outperform the two you think are the worst.
So, why hang onto the duds?
IT Contractors Money – Selling Hardest
Selling is the hardest part of the operation.
There’s many good buyers of shares – but it is the good sellers who tend to make the money.
If you follow the above advice you should stand a pretty good chance of outperforming your fellow Stock Market pundits.
Then you can think of packing in IT Contracting and doing whatever you really want to spend your life doing.
It is so important to turn IT Contractors money into even more money.
Good Luck!
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