Time for a Safe One

As I review my portfolio, and sit through a day like Friday I remind myself that small growth companies offer a lot of potential, but also carry more risk. I can't complain up to this point. I'm currently sitting at a 60% return on Garmin, a 63% return on Armor Holdings and I'm off to a quick 8% return on my recent purchase of QSII. The rest of my portfolio has been on the upswing as well (IBM has had a great run recently). The point is though that a lot of my stock picks have been in small fast growing companies. The key to surviving the stock downturns (and yes there will be one eventually), is to have a balanced portfolio. My one "safe" stock I purchased on this blog, SJT, with it's ~8% yearly dividend has had a nice 10% return so far and has done exactly what I expected of it (slight stock price gain with excellent dividend return).

With that said, instead of making a second investment into QSII when it hits a 10% return (as I did with Garmin), I will instead put this money into a safer, large cap company with a strong history of earnings and profit. Currently on the list are JNJ, MSFT, GE, MMM, or BA. I'm definitely leaning towards JNJ. It's in a stock price valley, is well diversified in product and in location, and it has an excellent history of solid growth with a steady 12% average rate of return. Stay tuned for the G. pick.

Another thing I've been battling with is whether to sell a part of my purchases and take some profits. Two things keep me from doing this, thinking about all those people that sold Microsoft the first time it doubled in price way back in it's beginning, and paying short term taxes on those gains. For now I'm going to simply sit on them but I will be keeping a close eye on the market.