The stock market is driven by economy. Investors get happier when the economy looks good and get worried when the outlook for economy is not good. Often, investors overreact for the good/bad signs.
If you have invested money in stocks, you should carefully watch out for the indicators of the economy - like consumer spending, housing market, unemployment rate, jobs growth, exports/imports etc., You should also time your trades (buy/sell) accordingly. Do not ever make a buying or selling decision without even monitoring the economy indicators.
Saturday, January 05, 2008
Make hay when the sun shines
This is an old saying but holds good even for stocks trading. I had completed building my portfolio in November with the stocks from NTGR, BRCM, AAPL and ATHR.
The market was very optimistic before the Fed's rate cut in December. My portfolio showed an 8% ($350) increase in the market value. I was waiting to sell them all, right after the rate cut - hoping that it would shoot up even higher. Some of the stocks in my portfolio crossed the price targets that I had for them. But, I was greedy and wanted to wait for more time.
The Fed announced a quarter point rate cut instead of a half point rate cut expected by the wall street. Wall street became very unhappy and there was a huge sell-off right after the Fed's announcement. I saw the stocks grow by 8% and fall to 1% on the same day. I missed the golden opportunity to make money.
I have been waiting for about a month since then and the stocks never reached that pinnacle.
The lesson here is "Sell the stocks when your target is reached. Do not wait for the stocks to go up even higher"
The market was very optimistic before the Fed's rate cut in December. My portfolio showed an 8% ($350) increase in the market value. I was waiting to sell them all, right after the rate cut - hoping that it would shoot up even higher. Some of the stocks in my portfolio crossed the price targets that I had for them. But, I was greedy and wanted to wait for more time.
The Fed announced a quarter point rate cut instead of a half point rate cut expected by the wall street. Wall street became very unhappy and there was a huge sell-off right after the Fed's announcement. I saw the stocks grow by 8% and fall to 1% on the same day. I missed the golden opportunity to make money.
I have been waiting for about a month since then and the stocks never reached that pinnacle.
The lesson here is "Sell the stocks when your target is reached. Do not wait for the stocks to go up even higher"
Thursday, January 03, 2008
52-week low doesn't mean a BUY
I bought Broadcom (BRCM) when it hit a 52-week low of 28.75 in Nov 2007. The company had also announced a stock buy-back program. I was very tempted and bought the shares of BRCM for $1000. The stock touched a new 52-week low of 25.78 in the next 6 weeks. I lost more than 10% in 6 weeks. It was a lesson well learnt. I didn't do a proper research on the company. The market ratings were hold & avoid for BRCM :)
I am eagerly waiting to take my money back. Hopefully, the stock will break-even soon. You should never just use "52-week low" as the ONLY metric to buy a stock.
I am eagerly waiting to take my money back. Hopefully, the stock will break-even soon. You should never just use "52-week low" as the ONLY metric to buy a stock.
Arizona Trip - If I had to do it again ...
Well, it was quite an adventurous and relaxing trip. If I had to do this again, I will do it slightly different. Here are some of the things that I will change:
1) I will not plan to drive the RV for a long duration on a single day. I should've ideally landed in an airport closer to Flagstaff/Page and should've rented an RV there. That way, I would've avoided lots & lots of driving. The other option is to camp in the places - on the way to Page. That would have prevented some of the tiresome driving.
2) I will avoid hiking in cold weather with the baby :)
3) Some of the campers have rented a SUV/minivan in addition to the motor home. That way, they can drive around using the SUV/minivan and camp in the motor home during the night. I will consider this option next time.
4) Page is a very beautiful location. You can stay there for more number of days to cover all the places in and around Page. You should specifically visit Rainbow bridge :)
Here is a list of some attractions in Arizona. It may be helpful for some of you in planning for a trip to Arizona.
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