Sharon asked us to share some of our online investment strategies, so here goes.
By day we have been the President of a Retirement Consulting firm for over 30 years, so have a lot of background in innane things like asset diversification, risk/reward ratios, present/future value, actuarial valuations etc., so our online investing approach probably reflects our background, but we have a much higher risk/reward tolerance personally then we recommend to our clients.
We have been investing online for over 3 years and fortunately are still ahead. Our current portfolio has 19 active programs and 3 test programs.
The basics for us are:
(1) Evaluate programs using available DD and their ability to do effective adiministration & communications. Utilize multiple info sources, We gather a lot of info from forums (selected ones like this one where the masses don't go). This is strictly a subjective step, since there are no guarantees, even with lots of info.
(2) Assume online programs only have a 6 - 12 months shelf life.
(3) Test spend a program with $100, if it pays 4 times, increase to current acceptable loss ratio amount (currently $1,000).
(4) Always recover principle first, then if profit compounding is indicated, do no more than 50%.
(5) Diversify portfolio based on risk/reward. Currently we divide as follows:
(A) Cash Generators - usually short term with returns of 3 - 10%/week.
(B) Wealth Builder - longer term - usually private.
(C) Special Programs - rare combination of factors, expected to or has lasted past 12 months.
(6) Have a greed oriented segment of the portfolio. All investing is a form of gambling and one of the problems with most gambling is that not enough attention is paid to the effects of the "greed" factor. After all we all know the thoughts of if a 10% program/month is working, let's find a 10%/week or higher and hit it big, quick. We don't fight this behavior, but try to incorporate it by having a part of the portfolio that is the so-called "gold games." I guess we could be called a "hit and runner" but managing this part of the portfolio lets the pressure off and we are content with programs that are like "watching grass grow" in comparison. Plus there's money to be made in the "Ponzi's." As an example we are currently playing with one that is 7%/day, another at 9%/day and another a 400% return over an indetermined period (started at 2 weeks, is now up to 6 - we do a daily spend) and so far they are paying and in profit.
(7) Have a profit allocation schedule. Ours is (A) Set aside for Taxes - 25%, (B) Program upgrades, maintenance, re-investment - 25% (C) Discretionary spending - 40% and (D) Philanthrophy - 10%.
We trust this information is helpful. It works for us.