So is riding a stock all the way down to zero.
Investors....come in please!
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This. If a stock drops 8% or more, get out. Immediately and move on. Statistically speaking you are better off. Either it's never coming back or it will take such a long time you are better off elsewhere.
Learn to sell.
Hold your winners, dump your losers.
THREE very solid points/rules of real investing, vs the trite "buy low, sell high"
8% doesn’t seem that much unless you’re talking dividend blue chip stuff. Half of the nasdaq moves that much on a monthly basis
Back a few years ago I immediately dumped Linn Energy and Seadrill when they started having problems.
I originally bought them for the nice dividends.
Last year it was COIN, I broke even on COIN. Should had just bought VOO.
Really?8% doesn’t seem that much unless you’re talking dividend blue chip stuff. Half of the nasdaq moves that much on a monthly basis
Two questions for you, then.
What number do you use?
What‘s the value of your portfolio?
Nearly 400k (CAD$) in the stock market but most is in indexes. My play money account is about 10-15% of it.
I don’t use specific numbers. If I think something will beat SPY over the next few months, I hold. If I don’t, I sell. Sometimes you win and sometimes you lose.
Visa, for example. Down pretty big from ATH someone could have bought “the dip” at 210 in early November, been down 8% within four weeks (actually more like 10%) but now another four to five weeks later it’s at 221 and likely on its way a fair bit higher. Plus if you’re averaging down your 210 average could be like 205 or whatever before the reversal.
Of course you can’t do this with everything but there are still quite a few somewhat volatile solid companies.
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ON average doesn't mean every stock. There will always be exceptions. Say you buy on pure speculation.
Just like not hanging on to every loser. Do you hold EVERY loser into oblivion? Of course not.
Mostly this applies to stocks bought correctly. Per the chart. If if doesn't work (ie down ~8%) get out. ON AVERAGE, meaning greater than 50% of the time, you will be better off.
Just like not hanging on to every loser. Do you hold EVERY loser into oblivion? Of course not.
Mostly this applies to stocks bought correctly. Per the chart. If if doesn't work (ie down ~8%) get out. ON AVERAGE, meaning greater than 50% of the time, you will be better off.
Following the 4% rule ensures that you don’t bet the farm on any one stock.
For those who don’t know, the 4% rule is simple. No more than 4% of your portfolio should be in any single stock.
Even if you invest in indexes applying the 4% rule to any single stock you might purchase outside of those still gives you peace of mind.
For those who don’t know, the 4% rule is simple. No more than 4% of your portfolio should be in any single stock.
Even if you invest in indexes applying the 4% rule to any single stock you might purchase outside of those still gives you peace of mind.
Agree with that, I’ll go to 5% if something is really cheap or beaten down for no reason, but 3-4% is a good number.
Call me crazy, at one point 100% of my IRA was Amazon stock but have made some changes to it.
Invest in something else. When you fall in love with a stock when the fundamentals are poor, you're left broken hearted.
Nearly every time i have trimmed a stock at a loss it has gone up in my face within months. I try to never sell anything at a loss unless its a tax harvest play. In a week or so i can buy one of them back for a little less and i will have cut the 2021 tax bill a little.
You just never know what the market will do and what any given stock will do.
You just never know what the market will do and what any given stock will do.
I just play the long game.
The thing about this rule, it applies to stocks bought according to proper charts, using correct techniques in a bull market. Not randomly bought or stocks bought "because they were low"8% doesn’t seem that much unless you’re talking dividend blue chip stuff. Half of the nasdaq moves that much on a monthly basis
Perfect example. "Buying the dip" would not have been the best time. I look at the chart and maybe guess at the time frame you mention but buying the dip during the fall in Sept and Oct would have been too soon (burned a bit), but decent buy with a handle seemingly formed after Dec 1. Continue to watch the volume.
Most likely the buy was not well timed. Never selling at a loss is not a prescription for success. I mean basically this tells me some folks either have forgotten or don't know what a bear market is.
You can know what the market is doing as whole. And you can properly buy and sell stocks.
Trying to help. Not an expert or telling people what to do.
Best advice: Buy VTI early and often and keep buying. Don't check it often.
My Theory of the Day: With inflation increasing the smart money is abandoning bonds. Where is that money going? Into stocks with relatively high yields. Why those stocks??? The investors that are abandoning bonds are the investors that are seeking yield. This kind of a trend can have some long legs.
That is a nice chart Warstud, I study charts and don't buy without due diligence, unless I follow an advisor that is 60/40 so far on "unusual action" High Volume on Options at a certain strike and date, trading naked. Options is my playground, and there are many ways to play on the playground. I often sell upside calls or puts on my common held shares on days when these stocks have large upside or downside days, and commonly buy back the calls or puts the very next day for half the price and pocket the money. 24 hours income the easy way. Yes, I have had to bite the bullet, but have learned the stocks I can do this with, and the stocks not to. "Don't do it with NVDA"
Treasury Bonds are dead. The FED is buying them, and they will be tapering, which will make the yield go up. The only thing they are good for is an indicator to the markets short term's reaction, but for the most part they have already been priced in, unless they go overboard, which they most likely won't. If they Tank the market the Fed will back off the Taper and continue to buy their own bond, they have been buying their own bond for well over 13/14 years, yet they are in fact behind the curve as far as all advisors are concerned. Remember, the market likes to think they have everything figured out at least 6 months ahead of time, but the exchange averages say different. The exchange averages respond to the News in the short term, but in the long game, the interim news is fairly insignificant.
Treasury Bonds are dead. The FED is buying them, and they will be tapering, which will make the yield go up. The only thing they are good for is an indicator to the markets short term's reaction, but for the most part they have already been priced in, unless they go overboard, which they most likely won't. If they Tank the market the Fed will back off the Taper and continue to buy their own bond, they have been buying their own bond for well over 13/14 years, yet they are in fact behind the curve as far as all advisors are concerned. Remember, the market likes to think they have everything figured out at least 6 months ahead of time, but the exchange averages say different. The exchange averages respond to the News in the short term, but in the long game, the interim news is fairly insignificant.
The Fed has dug themselves into a hole so deep that it will be painful to the economy to get the inflation beast under control. They will have to raise rates and do so aggressively now.
What does that foretell for the housing market? The end of that bubble and back to reality.
Using the same measuring parameters that they did back in 1980, inflation is now at 15.15%. This is a more believable number than the 7% posted today.
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