Trimming and Adjusting in a Slow, Slow Economy

2014 has so far been a weird trading cycle at least for me so far. I've realized as time goes on that the growth stocks that were so successful in 2013, are not so successful in 2014. Some may have  been lucky and have avoided a rough 2014 so far, but it seems like high cap stocks have had a great run so far, and after the slight dip in the end of January, the markets have gotten to steady up pace. It may have been slow but it seems in the recent weeks its been picking up and now breaking through record highs once again to start June off. The whole "sell in May and go away" saying may not have been the best idea. But with the transition from small cap stocks to high cap stocks complete, and other adjustments taking place, did you feel like you missed out? Or can't quite get the trends?

The Trimming Technique
          One of the key decisions in investing is not only when to buy, but also when to sell. The trickiest might be the latter. Lets say you gain a huge return on an investment, but hold on to it because you are afraid its not at the top, and so you think it can keep climbing, instead it falls and you lose much more of the profit you were hoping for. Or other way around, the stock takes a turn for the worst, and so you aren't quite sure if you should sell your loses and move on or stick with the same roller coaster. Its a tricky decision that has investors in a predicament. And so the biggest tip I can give is the trimming technique. Take a look at your portfolio and if you are pleased with the returns, and truly believe the stock has had a great run and believe its in your best interest to take the earnings and run, then so do it. If the stock keeps going while you sold it, you might kick yourself, but I'd rather kick myself with a profit then with a loss. And with the trimming technique, you can just trim some of your gains and keep the stock, therefore, if the stock keeps rising you still get some gains while holding onto a percentage you already made. It works with stocks in the red too. Trimming is used when you believe your investment is at a higher risk then originally perceived; a certain percentage of your gains or losses are cut off to lower the risk of an investment.

The Advanced Reconstitution Phases
          This technique deals with funds rather than individual stocks in a portfolio, although it can still be used. Certain investment websites have a create your own "ETF" where you get to customize a portfolio based on percentages you want to invest in with certain individual stocks. Basically, in the instance of Motif Investing, you can trade 30 stocks for the same fee as one stock, the 30 stocks can be any of your liking and you can customize the percentage of your money goes to each stock. Neat right? Well this type of investing has its disadvantages and advantages and make sure you read up on these customizable "ETF's" first. Reconstituting is typically done quarterly or yearly. Reconstituting is done when a fund looks at its stocks and either add/remove its existing stocks or change the existing ranking of stocks in the fund. This is done to keep the portfolio or fund in tact with market trends. Reconstituting is critical to the success of a fund. Now, this can also be done with certain portfolios. Obviously for individual investors, trimming is an easier way adjust their portfolio, but with those customizable "ETF's"  this reconstituting technique could be possible. Invest with Care.

The Worldwide Developer's Conference: The Ecosystem of Apple

        I know I know, I have already talked about Apple last time but this time isn't about some deal. This time its about there Worldwide Developers Conference they host every year in San Francisco. Now the conference is used to showcase new software technologies and programs for developers. So the first matter we have to get out of the way is that this conference is intended for developers not consumers. So if you watched the keynote Monday and at the end said, "so what did they announce other than software updates" then you are like me. But lets try to look at the picture from Apple's perspective.

Apple's Positioning 

        The conference this year certainly didn't set off any fireworks, but from Apple's perspective they are trying to feed programmers with the tools they need to make their own fireworks. The conference was not about updating their product line, (which I desperately wish they did)  but was about connecting their products and updating their software with new features and easier ways for developers to write code. These announcements were certainly a positive for coders and developers but for consumers and investors, we were not very impressed. Early media coverage has mixed thoughts. Some media outlets focus on the positive of what they said, the new apps including a health and home app, the new finger recognition software and how it can be used through 3rd party apps, and more. Some media outlets focused on the negative what they said, what they didn't say. No new flashy watches or Apple Beat head phones has consumers disappointed. So in reality Apple addressed the glass half full instead of half empty.

My take on WWDC 2014

      I watched most of the key note speech presented by CEO Tim Cook as well as other developers and Apple assistants who presented various presentations and demos of the new software updates a preview of IOS 8 and other new apps. I am not a developer nor am I a enthusiast of coding. But I can understand the positives of the new software they released. The beginning Mr. Cook took shots at Google, then went on to explain its developing software and how it is now much easier to use as well as a new health app that can put charts of your health onto one screen. (I guess that's why they hired some renowned doctors) They also have a new home app that synchronizes all of your home security needs in one app. Tim Cook introduced updates to the Icloud, which connected their applications and devices together. They touched on how they have given more customization and speed into their developing software by using their new software which makes it more easier for developers to use. Apple also emphasized how this new update will not compromise on their well known safety features. 

What To Take From The Conference

      I might of missed a couple of points from the keynote but I got the highlights and there is some conclusions I would take from the conference that are important. Apple made strides to connect all of their devices, update their interface, add some more apps, and make it easier for developers to develop. As an investor and from the big picture, this isn't much and is why Apple fell on Monday. The small picture though has some pretty big implications. Obviously the absence of new products is a red flag for investors, but the strides it made with its developing software is a sign new developers can now be able to make big money apps easier and faster. Also its home and health apps shows how its incorporating its brand into more markets. From an investing stand point that's a good sign. Mr. Cook shared powerful data showing how they have 130 million new customers buying there first Apple product and probably switched from an Android device. (taking a shot at Google) This figure is important because it shows how Apple is still growing and it can retain these customers as well. I didn't like how Tim Cook talked up the update at the end and shared how the new coding software is the biggest thing since the app store. I still wan't to know what the wickedly smart Angela Ahrendts, the former CEO of Burberry who transformed the British company into a money machine with style is going to do at Apple as retail chief. Plus what they plan to do with Dr. Dre's beats. In the end it was a software heavy conference that might of bored consumers, excited developers, and concerned investors. 

In conclusion

       So I end by saying what I've always said about Apple, it  won't be an exciting stock like it was when Steve Jobs was at the helm. But, the anticipation and expectations for something new to come out of Apple is growing and growing. And instead of addressing it, they have made strides to get into new markets, knowing it has lost ground in other markets. "Apple put itself into a great position for the future of their products" but when will those products come out is what everyone is dying to know. Apple has been on a run for the most part because of its fundamentals. It still has a heaping amount of cash, a great dividend yield, and shows great sales from its Iphone's and Ipads, which lets face it, we'll keep buying their new Iphones for as long as they keep updating them. The stock has made a rebound on Tim Cook's reinvestments back into the company, but will not reach new heights until they come out with a new product that consumers will crawl to. Which i'm sure Apple fans will definitely crawl to whatever they have next. Invest with care.