April 29, 2016

Stern bought ABB in 3 minutes and 7 seconds

This morning on April 29, 2016, me and my team had technical difficulties calculating the rankings and I had very little time deciding which stock to buy. Fortunately, I ran the Swiss Market Index (SMI) Top 10 List today, which I know well.

The third best entry on the list was ABB, a company that I admire. I didn’t look any further and bought 250 shares of ABB for the roughly 5,000 Swiss francs I invest each week. In the video, I needed only three minutes and seven seconds to make my decision, nothing more.

Is it crazy to buy stocks solely based on a couple of Obermatt ranks? No, it isn’t crazy. Many financial advisors will advise you to buy a popular stock index fund. The SMI is such a fund in Switzerland. If you buy the SMI Index, you automatically buy ABB stocks worth 5% of your investment.

That’s just what I did here. I bought ABB for 5% of my portfolio value of CHF 100,000 (this is the amount I want to invest this season). If you think buying ABB in 3.07 minutes is crazy, you would also have to say that all financial advisors that recommend buying index funds are crazy.

The benefit of picking the stock yourself? You know what you are getting. For example, I didn’t want any financial stocks or oil companies. Now I have a Swiss stock market investment without the companies I don’t want. I feel much better that way.

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