Wow, what a rough way to start the 2014. The S&P 500 was down 2.7% so far this year. This is the largest monthly loss since 2009, and it also poses some interesting things to think about.
- Since 1929, the stock market has followed the same direction as January 80% of the time
- In the last 35 years:
- The S&P 500 followed January's direction 71% of the time
- The Dow Jones Industrial Average followed January's direction 83% of the time
- The NASDAQ followed January's direction 73% of the time
There are some notable exceptions though. If you look at the chart below, in 2003, the S&P returned -2.74%, and posted a gain of 26.38% for the year. Hey, we're down 2.7% right now…
So, How Did The College Investor Do?
Well, I beat the market in January! Yay for me! I didn't beat the market by that much, but I did return a solid 1.3% return, vs. the 2.7% loss the stock market had. That means I beat the market by 4%. Not too shabby!
Revealing My January Investment and Strategy
Last month, when I originally announced the Grow Your Dough Investor Showdown, I talked about what my strategy for this year would entail. I'm calling it a position strategy, and I'm looking at buying attractive companies ahead of their earnings announcements.
My first purchase for the Grow Your Dough Investor Showdown was Lindsay Corp (NYSE: LNN). The day before it announced it's earnings, I bought 10 shares at $82.75. As of writing this, the stock is now trading at $85.00.
What propelled the price up?
When the company announced earnings, they also announced that they were doubling their dividend payout and starting a share buy back!
What Made Me Look at Lindsay Corp?
I was originally looking at Lindsay Corp because I love water company stocks. This company isn't a water company stock, but it is in a similar niche. This stock makes agricultural water supply products, and also road construction products.
Both of these segments are poised to grow this year because water is becoming increasingly expensive for famers, and as such, they will be investing in infrastructure that can help them save on water costs. With road construction, improving tax bases in municipalities across the country will mean more road projects to catch up on the backlog of maintenance that hasn't been addressed since the Great Recession.
Where Am I Going From Here?
I'm continually looking at my portfolio and seeing if Lindsay will continue to play a role. I still have about $150 in cash in the original account, and I'll have more after Lindsay pays it's dividend this month.
Until then, I share exactly what I'm thinking about in my Premier Forums. If you want some direct insight live, make sure you check it out. I'm offering a 30 day free trial, so if you think I'm full of it, just cancel before 30 days.
How was January for you?