On my other website (www.littlebuddhaproject.com), I had a week long discussion about charities and the value of giving. I know that this seems to be an odd subject for an investing site, but there is some value for investors too. I’m not talking about just tax right offs.
Let’s be honest, if we don’t have a purpose, it’s difficult to stick with something that can be frustrating (like the stock market). If you find that you are losing purpose for having a portfolio (except money), try trading stocks to give a portion to charity. Pick a good round number and once you profit, donate! I would suggest starting with 20% of the profits.
Giving can be a very rewarding endeavor.
Do you think I’ve lost it? Do you give to charity? Let me know in the comments. Happy trading!
As always, I seem to learn a lesson by losing money. In this case, I was prepared for a trend to break downward. What I wasn’t looking for was a trend to break upward. My new rule, once a trend is broken, UP or DOWN, sell.
JOEZ was set nicely for a good upward trend. I was excited about the chart and the upward movement it was making. I bought it at just the right time (at the bottom of it’s trending cycle). It did everything I expected. Then one day, bang, it jumped 15%. 15%! Yes, what I should have done was sell it. The trend was broken. Unfortunately, I was only tracking a trend that broke it’s trend downward. The next day, bang, 15% loss. I went from a $200 profit to a $6 loss. Of course, my trailing stop loss kicked in and sold.
Moral of the story:
When a trend is broken (up or down), it’s time to sell.
I’ve had a few days with my iPad and I can honestly say this has potential to be a big technology changer for everyone. This also includes investors. The new mobile society has become even more capable with this device.
What does the iPad have in store for Lunch Break Investors? Here are a few of my thoughts on how this will change it all:
1. Full web browser. No more squinting at the mobile version of our favorite financial site. I was able to log into my Scottrade account and view charts, financial data and news. Just like on my laptop. The only drawback I’ve had so far is that I can’t use the drawing tool on the stock chart. So, I’m still not at the point that I can completely know if a stock is trending.
2. The every growing awesome apps. The Apple app store has enough financial apps that should suit anyone’s strategy. I’ll start reviewing those over the next few days.
3. Numbers is the Apple version of Excel. This is an amazing application. I’m in the process of converting my stock tracking spreadsheet to it (I currently use Google Docs). Again, there is one draw back to the app, it will import Excel documents, but not export them.
4. iBooks, Knook (Barnes & Noble) and Kindle (Amazon). These are the three big boys of the ebook reader market (sorry Sony). Barnes & Noble and Kindle both run on the iPad. What does that mean for Lunch Break Investors? No more heavy books! You can now buy all your favorite books on your preferred format and read away.
5. The video player is much better on the iPad than on the iPhone/iPod touch. Now those videos from podcasts and iTunes U are much easier on the eyes. Time to upgrade your financial knowledge.
Those are my thoughts, do you have any to share. Post a comment below, I would love to hear from you!
There isn’t a strategy that will make you rich quickly in the stock market. I’ve seen the ads for making millions investing in penny stocks and the ads for how to make millions in the stock market. It just doesn’t happen.
Let’s do the math:
To make a million dollars in one week:
1. Invest enough money in stock that can be sold for a million dollar profit.
• Let’s say you have a stock that will go up 10% in one week.
• You’ll need to invest $10,000,000 to make your profit. If you have that much money, why do you need to get rich quick?
2. Invest $1,000 that grows to a million in one week.
• You would need to find that wonder stock that will grow 1,000%. To my knowledge, that doesn’t happen.
Sorry to burst the “get rich quick” bubble.
But, there is a way…
What you can do is grow your wealth using the stock market. Investing is more like growing a garden than winning the lottery (I’ll do that comparison later). Like a garden, you need to sow good seeds or in this case buy good stocks. You also need to weed out the bad stocks that bring down your portfolio.
Some ways to do this are:
1. Value investing
2. Large Cap Stocks
3. Small Cap Stocks
4. Trending
I won’t include day trading, because this is too risky. Besides, I’m a lunch break investor. I don’t have time to sit around watching the stock market. Any strategy should be easy to follow and not take up to much of your time.
I’m sitting at my favorite coffee cafe having a tea and using their free WiFi. I try to be as careful as I can when I use free Wifi. How do I know that one of the employees don’t have some high tech way of tracking my log ins and passwords? I know this sounds paranoid, but it is possible to do this.
This is why I list mobile broadband on my what you need list. If you are not using a connection you can trust, DO NOT enter user names and passwords to sensitive web sites. Someone could steal your information. You can imagine how scary it would be to log into your brokerage account only to find all your money gone.
I use Scottrade and thought at first how dumb it was that I could not make a withdrawal from their web site. I had to either call and have them snail mail me a check or sign up for the ATM/Checks. Still it seemed odd, until I started looking at how to be more secure. Now I’m thankful that if someone could break into my account that couldn’t steal all my money. What they could do is sell my stocks or buy bad stocks that will definitely lose my money. This option is no better than having my money stolen. Would someone do something that horrible. Yes, they would!
Tell me your thoughts in the comments section on what you think about security. Have a good tip? Share it!
Is your portfolio stressing you out? I know mine has. It wasn’t until recently that I realized how much stress it was causing me. Automation has helped reduce my stock portfolio stress greatly.
Automating my portfolio probably won’t make me as much money as an overly watched portfolio would. Let’s be honest, I’m giving up money when I set the trailing stop loss.
At the end of the day, if I’m making money or at least limiting my loss, then I’m ok. The extra bit of money is not worth the enormous stress I felt when I tried to micromanage my portfolio.
How much stress is your portfolio causing you? Share your stress with us in the comments below!
After careful consideration, I have decided to try a new investing strategy. I’ve found that I do not have time to use the traditional rules. My rules will have to fit my time constraints. In other words, it has be easy and simple enough to do during my lunch hour.
Here are my Lunch Break Investing Rules:
1. Only buys stocks on the watch list.
2. Must be trending upward.
3. Must have a trending sweep of at least 10%.
4. Buy only at the bottom trend line.
5. Set a loss limit (2-3%).
5. Set a trailing stop loss to 8% below the bought price (dollar amount on the stop loss, not percent)
6. Set a profit limit (5-10%).
6. Allow the stock to trend upward until trailing stop loss is activated.
7. Never break any of these rules.
8. Adapt my strategy as needed.
Over the next several weeks I will be expanding on each of these items. I will also concentrate on the automation and mobile techniques.
Picking individual stocks for a portfolio is not for everyone. If you are interested in investing, it’s worth the experience. Give it a try and if you love it, keep doing it. If you don’t love it, get out and find a different investment strategy like money markets or mutual funds. For an investor to really make money in the stock market they must have a passion for it. The stock market is a roller coaster with ups and downs. When you go up it’s the greatest feeling, elation with just a tingle of fear that it’s all going to crash. When it does crash, and it always does, it’s a sickening feeling that ties your stomach into knots and makes you doubt what you are doing. The doubt is the killer and passion is the defense. If you have the passion and excitement, then you too can make money in the stock market.
Most accounts can be started for $500 or less. Use your tax return or start a saving account to save the money to start investing. Also see my post about getting started even if you make minimum wage.
2. It’s the wrong time.
The worst time to invest in the stock market is tomorrow. Tomorrow is too late. Today is always the best time. Your money can’t grow until you invest it.
3. Recession!
Remember the often used “Buy low and sell high.” Guess what a recession does to stocks; it pushes them down to the “low” point of the last statement.
4. It’s too complicated.
It can be. Depending on your investing goals and strategy. Of course, it can be so simple you can do it on your lunch break. Like me!
5. I don’t have enough time.
Like step 4, most investing can be done in under an hour. I do most, if not all of my investing homework at lunch.
6. I’ll lose ALL my money.
Diversify! Unless you have a string of bad luck and all the companies go out of business, you won’t loss all your money. Keep in mind one of the goals of investing is to persevere your capital. It’s ok to take a loss if it minimizes the damage one or two bad stocks can do to your portfolio. And remember, always have a loss limit.
Got other excuses you have heard and want to share, COMMENT!
First, always set a loss limit. Know when to get out when you are losing money. Depending on your goals you may want to set a 5-10% loss to trigger a sell.
Now if you are like me and when you got started you had no idea what a loss limit was, then you may have a few that have lost big. Here are 4 questions to ask before you sell:
Is this a long term goal/investment? The beauty of the stock market is that it does bounce back. Depending on the industry and the company, you could see it bounce back.
Is it a good value company? Do your homework. Is it a good value stock. This is a good sign it could bounce back.
How much are you down? If you are down over 25%, then it may be time to sell and take the hit. Keep in mind that farther it goes down the more it has to earn to bounce back to your entry point.
Can you off set your winnings with this loss? Taxes! Uncle Sam gives investors some breaks. One is that you are taxed on your profits minus losses. Check the tax law or a trusted accountant for more details.
If you have other suggestions, please leave a comment below!
