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Showing posts from June, 2021

Exit Strategy When You Buy A Stock

When you buy a boat,  buy it with the sale of it in mind . Take a look at this example: Let's say a boat is selling for $40 per share during a  Low Tide  phase and your research shows it might be a good time to buy. Before you buy, you set a goal that you'd like to make a 10% return so you will return that boat to the dock at $44. How likely is it that the boat you are sailing can reach $44? Has it reached $44 before? How many times has it reached $44? In this stock trading example, the $44 is way more important than the $40 because the stock HAS to get to $44 to make this trade work. How long are you willing to wait to hit $44? You were hoping to sail this boat less than a month, but, after you set sail, you start looking at your charts and you see it's been a while since this boat sold for $44. Furthermore, based on deteriorating  sea conditions , you think it might take a while to get back to $44 and even further research shows the boat now has a better chance of hitting

Trade Or Hold?

Trading individual stocks is time-intensive, risky and can be an emotional rollercoaster. So why trade? The answer to this question is different for everyone but here are some considerations: Do you have a high-level understanding of stocks and the stock market? Can you afford to lose every dollar you are investing? Do you like to gamble and take risks with your money? Do you enjoy researching stocks and learning about companies? Do you have enough time to research? Are you trying to trade as a hobby or a full-time job? Notice how none of those considerations are "do you want to get rich?". Very few traders outperform the overall market and you have a FAR better chance to make money if you invest your hard-earned money in the overall market than you do if you try to trade individual stocks. I say "buy  $VOO  or something similar during  Low Tides .  $VOO  tracks the performance of the S&P 500 index so it requires far less research, time, and analysis than individual