Timing can often be a big help on individual stocks in many cases. This is often the case when stocks move a large amount during a certain time frame due to specific events that occur or may just be believed to be likely to occur at some point in the future - usually the near future. But it can be risky. My buying and selling of Voltari recently over a 3 week period that I talked about in detail in the penny stock forum is a perfect example of event-driven timing of a stock.
I've got an ETF in the China market and I've just cut my holding in half. The temptation was always there to ride the investment higher and see where it takes me. But then I remembered that I've actually had it for about 7-8 years when it was riding high before. I didn't sell out of it at the time and then the market crashed. It pretty much took up until the beginning of this year for me to get my money back. Now's the right time to cut the holding. If I feel that the market kicks on a bit too much further in the near term I may sell the rest.
An alternative strategy I use at times is to play with the house money. If you are enjoying a nice gain, sell a portion of the position to take out your original investment and let the remainder run. It's all profit. You can play with covered calls or trailing stop loss orders or something else, or just watch the remaining position percolate while collecting dividends, until the run tires or you find something more interesting for your portfolio. HTH. YMMV.
All very informative posts. I was reading how many millennials have become an "under the mattress generation" and I have seen this pretty widely to be true. 2 of my of former roommates never even opened a bank account or had any credit record. Doesn't seem like a smart, well thought out position, but one more based on hysteria and mal-education. I appreciate your informative posts, JR. I'm trying to learn what I can on this website even though I do not have money to invest right now. I'm hoping that just by learning more about money, I will discover better routes of obtaining it.
a lot of people tend to be investing in gold or even silver as part of a IRA or retirement strategy. It is up to you as to what you wish to invest in, cash, gold bars or a traditional retirement strategy involving stock, bonds, and some investment of just paper money. SInce the best investment strategy is to diversify, having a bit of everything may be the way to go.
JR Ewing, care to elaborate your "shorting"? Me, I sold the CAC40 future as CFD. Very volatile trade, with daily movements of 10% the invested money being quite common. Gotta say this: in a Bear market, good companies tend to fall as well.
Yeah, in a bear market, just about everything gets hit to one degree or another. If I could just figure out ahead of time when a bear market will start, how far down it will go, and when it will end and reverse itself, and how long and how far up the following bull market will be, etc - I'm confident I'll be a zillionaire in short order. I've talked with many people on the internets who have tried to convince me they're able to do this - without any proof, of course. And I've also noticed that the very best and richest investors on earth share my inability to be able to predict these things very accurately with any consistency. So I'll continue to always be at least somewhat long on a number of good companies that appear to be cheap and/or rapidly growing, especially since there is a general upward bias to the markets for various reasons - most investors (even large investors) are long-only, and stocks that get onto the major exchanges and stay there any length of time tend to be better companies that are appreciating in value (or at least holding value) for the most part for the mid to long term. And I'll also always tend to have puts against more volatile long positions so that I can at least profit on any significant downturn... And I'll also have some puts against more volatile, high-beta stocks that appear to be overpriced/declining fundamentally that I don't have long positions on, that I believe are very likely to go down & that I consider too dangerous personally to actually short... And I'll also usually have at least a few actual short stock positions in less volatile companies that are similarly overpriced/declining fundamentally but are less likely to spike up to any degree than the high beta stocks... And I'll usually also have at least a few BOTH put AND call positions on more volatile individual securities that I believe are very likely to move sharply in one direction or the other, but that I'm totally unsure of which way they'll go... and that I'm not wanting to tie up much capital on via an actual long stock position - for example, small-mid cap biotechs that tend to move up and down violently on news such as FDA decisions and clinical trials. Not uncommon for a biotech stock to move down literally overnight well into mid to high double digits on bad news, or up triple or even quadruple digits over the course of a day or 2 or 3 on good news: http://www.marketwatch.com/investing/stock/AQXP And I'll also usually have at least a few bucks in commodities such as gold, and at least some cash on hand. But I'm never personally 100% short, or 100% in cash, or 100% in gold or whatever. And I'm big on diversification. I've been doing this for a couple of decades, and I know my own risk tolerance quite well (and that of each of my clients also), and learned a long time ago that at the end of the day we're all speculating to some degree or another. I'm not one of those guys who thinks I know it all (those guys end up broke, usually within a very short time). Nor am I willing to blow a substantial portion of my nestegg on any one bet because I just "know" I'm "right", or on some fool's errand like "forex trading" because it's currently the hip or sophisticated thing to do or whatever. People like myself who have the time, experience, and money to devote to more advanced investing techniques can do more than the typical novice who works outside of the industry - especially if they have limited funds. Not wise for a novice with a few grand or less to quit their job and spend a small fortune on transaction costs, STCG taxes, realized losses, etc trying to invest/trade like someone with many years of experience, lots of money, and the time to devote many hours a day every day to this. Better for the novice with limited funds to stick to an index fund, or to perhaps find a handful of good stocks or a couple of mutual funds, and to dollar cost average every payday to build up their wealth. Not wise for such a person to worry about shorting, options, using leverage, frequent trading, etc.
JR, how many transactions do yo do per week? In what range? I'm curious, because you seem to be a professional. LE: oh, you are a professional indeed. I just read about you having clients
