X-ecutive

Stock Market Madness

Since "retirement" I have taken control of my 401K plan and my stock portfolio. I have new found respect for good money managers on the market. While I have found it is not difficult to handle the mechanics of trading, there are so many options and variables in play with each that making sense of even individual companies is at times a chore. When combining the market dynamics with those of the companies that trade on them, a truly mad world unfolds.

Back in February, they market was extrodinarily good. I made a few balanced investments in some ETFs (exchange traded funds) and was up 13% in a mater of days. Unfortunately, I rode it through March when the market went down 35% and I lost much (all) of that gain. The market since has been faily flat but I began approaching it with a different strategy. I own a few long term hold stocks in Large Cap companies that pay good dividends but for the most part I am now trading opportunistic stocks based on expected stock splits. To date every stock I have purchased that has indeed announced and subsequently split has paid off. I have even held a couple of them after the split because the run up is still continuing. I have made back all my lost profit even in this flat market and am now up about 18% YTD.

There appear to be several key market triggers beyond those factors inside the companies performance. These are things like federal monetary reports, interest rat announcements, durable goods reports and general market influence of super large company events. I have found it best to take profit in advance of major announcements and sit out periods of quarterly earning statements if there is any indication of weakness. Also as a general rule I have learned to buy most aggressively in extended hours trading early in the week and sell weak positions and take profit in mid session on Thursday as basic rules of the game.

There are many analogies that I could draw between market flucuations and the general madness inside corporate entities but for now I am happy to be on the periphery and experience the commonality as a opportunistic investor. I kind of like the idea of actively participating from afar. The sort term risks may be greater but I can assess and act on them from my deck overlooking the beauty of Montana.

posted by Unknown @ 9:24 AM