Investing isn’t just about picking stocks; it’s about having a strategy that aligns with your goals and risk tolerance. Over the years, I’ve developed a three-pronged approach that helps me build wealth while balancing risk and reward. My investment strategy focuses on dividend stocks, short-term trades on dips, and long-term growth investments. Each prong serves a specific purpose, ensuring that I generate income, take advantage of market fluctuations, and benefit from long-term appreciation. Here’s how I approach each strategy.
1) Dividend Stocks – Buying the Dips to Build Passive Income
Dividend investing is at the core of my portfolio. The principle is simple: whenever a dividend stock experiences a daily loss, I buy more shares. It doesn’t matter whether my current position is at an unrealized gain or loss—if the stock drops for the day, I see it as an opportunity to accumulate more shares and increase my passive income.
To maximize efficiency, I prioritize adding to stocks with the highest unrealized losses first before considering those at a gain. Some of my top dividend holdings include:
- ARLP, PFE, O, SCHD, UPS, F, ENB, EPD, ARE, KHC
This strategy ensures I am continuously compounding my dividend income, allowing my portfolio to grow over time while taking advantage of short-term price swings.
2) Buying Low and Selling High – Capitalizing on Market Overreactions
This is my more active investment strategy. I look for stocks that have dropped 10% or more in a single day. However, I don’t just buy anything that’s down—I have strict criteria:
✅ The company must be one I am familiar with.
✅ It must have a market cap of over $1 billion (to avoid highly volatile small-cap stocks).
✅ The long-term chart should show an upward trend, meaning the company has historically recovered from pullbacks.
When a stock meets these criteria, I buy at the dip, then hold until it rebounds—usually within days or weeks—and sell once it returns to previous levels. This method allows me to generate short-term profits, often in the range of 10% gains per trade.
One recent example is Tractor Supply Co. (TSCO), which experienced a sharp drop but quickly recovered. (Link to TSCO case study here.)
3) Long-Term Growth – Holding High-Quality Stocks for the Future
The final prong of my strategy focuses on buy-and-hold investing with high-growth stocks and ETFs. These investments are not meant to be traded frequently; instead, they are set and forget positions that compound over time.
Unlike dividend stocks, these holdings don’t pay regular income, but they have strong potential for long-term appreciation. Some of the stocks I’ve held for years include:
- Tesla (TSLA), Vanguard Total Stock Market ETF (VTI), Google (GOOGL), Microsoft (MSFT), Apple (AAPL), Nvidia (NVDA)
Many of these positions have doubled in value, and I have no intention of selling unless there’s a fundamental change in the company or a significant shift in my investment goals.
Final Thoughts – A Balanced Approach to Investing
By combining dividend investing, short-term trading, and long-term growth stocks, I ensure that my portfolio is diversified, resilient, and always growing. Dividend stocks provide a steady income stream, short-term trades allow me to capitalize on volatility, and my long-term holdings serve as a foundation for wealth-building.
No single strategy works for everyone, but this three-pronged approach has helped me consistently grow my portfolio while managing risk. Whether you’re just starting or refining your own strategy, finding a balanced approach that aligns with your goals is key.
What’s your investment strategy? Let’s discuss in the comments!
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