Alpha male investing.

Aggressive stock-picker on the prowl for less risky financial plan

Stanley Richards may have been a latecomer to investing, but he's made up for lost time by aggressively buying and selling stocks such as Intel (Nasdaq: INTC) and Dell Computer (Nasdaq: DELL). Richards, 38, is a bus operator and entertainment promoter in Washington, D.C. Now that he's planning to marry his fiancee, Chereace Spriggs, a systems engineer, he's reexamined his lone wolf style of investing and is preparing a long-term financial plan.

Richards began working flesh out of high school, when, at 19, he landed a job as a fingerprint examiner with the Federal Bureau of Investigation. For eight years, he maintained a traditional passbook savings account with Chevy Chase Bank, saving $3,000.

In May 1989, Richards became a bus operator, and began earning $29,000, up from the $19,000 he made at the FBI. In 1993, he started contributing $50 per week to his retirement plan, increasing the amount gradually over the years to the current $100 he contributes per week.

At the same time, he got together with two childhood friends and formed Positive Black Men Coalition Inc., an entertainment business. Between dance moves at a show headlined by singer Howard Hewitt at the Grand Hyatt in December 1998, Richards spoke with a financial advisor and his life changed. "He spoke to me about the stock market and I went to see him the next week," Richards recalls.

Paying off $4,000 in debts by January 1999, Richards turned his sights on investing in the stock market. By February 1999, he had invested more than $6,000 in stocks, and became an aggressive speculative trader, buying and selling stocks, sometimes within weeks of completing a transaction.

He won some and lost some. Richards bought 20 shares of Intel at a cost of $2,873.67, which he sold in April at a $306.47 loss. He sold 20 shares of First Union (NYSE: FTU) and 60 shares of Dell, both at losses. Richards decided to hold on to his 20 shares of Cisco Systems (Nasdaq: CSCO), which he bought for $2,046.28, or $102.31 per share. But when the firm had a 2-for-1 stock split, he sold his shares for a $611 profit.

Other companies he's rapidly bought and sold include Internet Initiative Japan Inc. (Nasdaq: IIJI) and Global TeleSystems Group (NYSE: GTS).

Engaged to be married in August 2000, Richards has finally acquiesced to his fiancee's wishes that they both sit down and map out a long-term strategy. "She's more conservative in her approach," says Richards. He's committed to ironing out the financial plan that he has shunned until now.

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Financial Snapshot:

Stanley Richards and Chereace Spriggs

Gross income:          $61,000 per year

Debts/liabilities:
  Credit Cards                   $4,000
  Car payments:          $637 per month
  Household expenses   $1,100 per month

Expert Advice

FINANCIAL EXPERT:. Wakeen Edmonds, Financial Advisor, Morgan Stanley Dean Witter, Washington, D.C.

His Strategy: Wakeen Edmonds sees nothing wrong with trading stocks, but he agrees that with an impending marriage, Richards would be better off if he and his bride-to-be hammered out a financial plan. He believes Richards should diversify his assets, plan for retirement, make provisions for his son, Khalon, 8, and stash away money in an emergency fund.

Edmonds' Recommendations:

* Establish a Cash Reserve: Richards' cash reserve is dry, so Edmonds suggests that he set up an emergency fund of up to three months' salary in case of disability.

* Establish Education Fund: Edmonds believes that for 2000, Richards should contribute the maximum of $500 toward an Education IRA fund for his son.

* Set Up a Roth IRA: Richards should immediately begin to contribute the maximum $2,000 per year to a Roth IRA or $4,000 to a joint IRA once he and Spriggs get married.

* Diversify Holdings: Richards should diversify his portfolio using an asset allocation model of 70% stocks, 10% cash and 20% fixed income, especially investing in municipal bonds because they are taxfree. Instead of relying on technology stocks, Edmonds suggests that Richards also buy consumer cyclical, energy and financial stocks.

--C.L.B.