After over two weeks of watching my investment portfolio get pummeled, I decided to take matters into my own hands and try some market timing. I sold six "safe" — actually, lousy — mutual funds that had been trounced in the market, and ploughed the money into Google (GOOG) and Apple (AAPL). The funds were attempts to hedge against the domestic financial market, all 5-star Morningstar rated funds with moderate risk, high return ratings. Some were international funds and hedge-type funds. They lost over 40 percent collectively since I bought them last fall. Forget about being cautious. I decided to go back to my tried and true friend, Google, and pick up some shares of Apple. I’ve won with Google twice, the first time being when I picked up shares at IPO ($85) and made a killing. Google dropped from $707 per share last year to almost $320 last week. I picked up shares of both on the bounce. While the financial markets will probably be volatile for the foreseeable future, these two companies are undersold. My gut tells me to ride them on the bounce until they recoup my loss and then jump off. I think it’s a good contrarian move. While it’s not always a good idea to concentrate in a limited number of stocks in a volatile sector such as technology, there’s one rule that trumps this adage — sometimes it’s better to go with your gut.
