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I see Ansell as a stock ready to buy, but how would your approach be to adding this stock to a portfolio?.  

The detailed question was:

I have been pondering a question that I have been wanting to ask for some time.  I have a bit of trouble when deciding that I want to add a stock to my portfolio and waiting for an appropriate area to purchase that stock that I get unsure whether or not it is the correct time for purchasing it. 

For example, I have been watching Ansell (ANN) over yesterday and then today and see that it has moved up away from it's last low.  There is good support at $20~ and then a further support back at $15~.
I see this as a stock ready to buy but how would your approach be to adding this stock to a portfolio? To me everything looks fundamentally good about the company.

While I would like  to advise you on this, it is not legal for me to do so without an Investment Adviser’s license. You may not think you are asking for advice, but ASIC would see a question about a specific stock from an investor thinking of buying it as specific advice. While I do not think this is a good law, I am bound to observe it.

 All I can do is to make some very general observations, that have no regard to the stock you are currently looking to trade.


If you were an investor, I would suggest that you study all of my teaching on investing and develop your own investment plan. Your plan should then tell you whether you want to buy a stock and what price you are prepared to pay. If you find a great business that makes sense on your investment plan at the present market price, then you put your order in the market and try to get a fill. For an investor with a multi-year time frame to be a part owner of that business, if it takes a few weeks or months to get set or you ultimately have to accept a higher offer, it will generally have minimal impact on your return. If the price runs away from you, then that is the reality of the market. There are hundreds of good stocks to buy – just go and find another one.  

However a trader like you, who is agonising over short-term price movements, has a more difficult problem. Your buying price is very important since you are aiming to only exploit short term price changes, rather than being a part owner of the business and earning the majority of your long term return from dividends and franking credits. Your trading plan should tell you what price you should pay and if you cannot get a fill, you move on to another opportunity.