Five minutes a day in practice
Having spent more than three years investing and trading in the markets on a full-time basis to the end of 2014, I have used that experience to come up with some guidelines for myself that will give me the greatest chance of still generating excellent returns while only looking at the markets for about five minutes a day.
While, I have nominated an hour a day as an average time spent across a year, the practical side of my involvement will only see me check the market for about five minutes a day.
The majority of my accrual of my self imposed 365 hours per year will come from undertaking my fundamental analysis by valuing about 100 of the better quality stocks twice a year at the half yearly (February) and annual reporting seasons (August) over the weekends of these months.
For technical analysis, I will spend about an hour typically on a Saturday morning looking at charts on a weekly timeframe to determine possible buy or sell signals for the week ahead.
I will then do a quick review on a Thursday evening of these charts to confirm any of these potential buy or sell signals and act accordingly for five minutes typically on the Friday.
*As of mid June 2015, I have averaged one buy or sell transaction a week during calendar year 2015 to date using this protocol*
What stocks will I be buying?
The same high quality businesses I have been buying for years. Quality being based on:
1. Balance sheet strength
2. A history of consistently good cash flow
3. A history of earnings generating an above average return on equity
4. Stocks with a consistent history of paying dividends
5. The likelihood that these economic traits will continue into the future
**If these companies are good value and/or growth stocks even better**
What timeframe will I use?
When will I buy?
When these good quality stocks stop going down.
When will I sell?
I will partially sell when these same stocks stop going up. That is, I will sell to a free carry position and leave the capital gain in the market to accrue dividends for free and take my initial capital back to put into the next opportunity.
Timing my entry and partial exit of good quality stocks on a weekly timeframe should do the trick.