I just made 15.22% on VGPMX
Posted on: February 4, 2017, by : fadmin

Well, not the entire portfolio. I wish that were true but I am only talking about the profit I have made this year so far from selling mutual funds or ETFs that I purchased when they were down and sold when they were high. I sold a small ETF holding in Vanguard Health Care ETF (VHT) for a 7.36% gain after 2 months and a more sizeable position in Vanguard Precious Metals Fund (VGPMX) for a 15.22 gain after about 3 months.

The VGPMX is one of the first funds I bought in stages using Dollar Cost Averaging (DCA). The selling price today hit $10.90 and I had purchased in at $10.14 – $8.88 so my average cost was $9.46. I discovered that there is no FIFO as there are with stocks or ETFs. As you add to your holdings your cost basis becomes higher (bad) or lower (good). It’s true that at $10.90 the fund share price has more room to get near it’s 52 week high of $12.63 and by selling most of my holdings I could be losing out, but I still have about 5% left and if it keeps going it will just add to my profit. If it drops, it will have to go lower than $9.46 before I lose money. Except that I won’t be losing any money if I don’t sell. And if it goes down again it should be after the 30 waiting period that I am in now after selling some shares. I have to wait that long before I can buy again. Which is fine because I can wait.

My strategy is to buy funds when they are below the midpoint of their 52-week high and low. I like to see them hit about 3/4 of the way towards the low or more. I figure the lower they are, the less risk they will have of going lower and the more likely they will come up to a point where my goal is. And my goal is to let them increase by 10% and then sell some or all of the holding. In this case, it worked out that the holding when higher and I was able to sell making 15.22%

I am also starting to pay more attention to funds and ETFs that have a record of paying dividends. While not crucial, I may have to buy and hold for an extending period of time and if I can get even 1-3% in dividends then I am that much further along in the game. And starting to thing seriously about dividend income going into retirement.

Note that I am not stating dollar amounts of my holdings or profits. I don’t think that’s important. Everyone is going to have different assets to work with. The important thing is to make a reasonable profit on each investment or trade and avoid taking a loss as much as possible. To me, this means avoiding Fear and Greed. Every time I make a decision influenced by either one it doesn’t turn out so well.

2 thoughts on “I just made 15.22% on VGPMX

  1. You can avoid many types of bad investing by just making sure you understand as much as possible about what you are investing in. Also, don’t invest because you are greedy or scared. You must be calm and confident or you are likely to make a bad investment decision.

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