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investing in stocks

It Was An Obvious Mistake To Sell My APPL Stock!

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Today’s date is January 30th 2012  – this is a reference date provided for those who find this post in the future.

On January 21st 2012, I sold my Appl stock and documented by reasons.

At the time of this writing, AAPL stock is trading at:  452.91 per share.  Obviously, I misjudged the situation.

I sold at around $424 a share.  I ditched the stock right before the Earnings report came out.

I have read that more times than naught, a stock will decline after earnings. That was one of my justifications give in the previous AAPL stock post.

I expected that even if there was a sudden increase after earnings that there would be a whiplash decline within a few days.

Sadly for me, I was mistaken.  It looks like AAPL is in a definite rise.  And I have missed out on a nice gain.

Theoretically speaking I have ‘lost’  almost $20 per share by jumping out.

I believe that I read analysts expect AAPL to go above $550 a share.  Of course, you cannot put much stock in that (pun intended)

Analysts are often wrong and even if they are correct, the amount of time before it reaches that height could vary significantly from what would be reasonable.  One day AAPL may very well exceed $550 per share, but we don’t know WHEN that will be!

So, my little folly lends more credence to the ‘buy and hold’ philosophy.  But, after living through the huge decline in stock prices back in 2007 / 2008  I just can’t put much faith in ‘Buy and Hold’ anymore.

On the other hand, there will be plenty of experts who will be willing to bash me for this kind of logic.  Let them!  It’s my money and my loss or gain.

There is much risk in investing.  You have to make your own choices.  I am by no means an investment expert.  You should always consult the professionals of your choosing before making any investment decisions.

I hope I make better decisions in the future.  But at the very least, I gained on my trade.  It’s just that I could have nearly doubled that gain, had I held until today!

No one can accurately predict short term moves in the market.   Let the investor be ware!

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Should You Trust Your Stock Broker?

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That title is sure to make some people smile.  I suppose if you really know absolutely nothing about stocks and investing, you are a prime candidate to be taken advantage of.  The problem is that there is a learning curve and you are probably going to lose money in the beginning no matter which way you go.

Stock brokers can charge an awful lot in commissions.  When you compare that to do it yourself accounts where you might pay  7-9 dollars for a trade, the savings is significant.  I once asked what it would cost to make the same trade through a broker.  Just by putting the middle man in the picture, I think the commission was around $150 or something like that.

Obviously,  I would much rather pay the 9 bucks than $150!  When you consider that there are going to be two trades, one when you buy  and one when you sell, the savings are double!

Ok, to answer the question at hand.  The only way you know you can trust your broker is if he is making money for you.  If not, then what is the point?

Many brokers are simply looking for their next trade.  It is to their benefit to have you trade as often as possible because each transaction signifies a commission for them.  If you put yourself in their shoes, this only makes sense.  We all need to put food on the table.

Since I have been making my own trading decisions for a long time now and I have enjoyed the savings, I would never use a high commission broker. The amount of money I save is significant.

However, you might be scared to death to pick your own stocks and I can understand that.  You have a lot of questions.  When do I get in?  When do I get out?  It is not an easy game for the novice and you can easily get your clock cleaned.  I am not so sure you would do any better with a broker.  If your broker was so good at picking stocks, why would he be working as a broker?   He could be independent and trade for himself, right?  He would not need to work as a broker.

One thing is for sure.  If you have already been using a broker and he is making a lot of money for you, then why not continue?   It is hard to argue with profit!  But if the broker is losing money for you, then maybe you should think twice.

The game of stock market investing is a tricky one.   If you could find a mentor who is willing to teach you, that might be best.

I can give you one clue however.  The things that you think should be driving a stock’s price up and down probably are not what actually does.   Anyone who is ‘in the game’ understands that last statement intimately.  If you didn’t get it, then it is almost a certainty that you have a lot to learn!

Be careful when playing with stocks, you can really get your butt kicked.  Should you trust your broker?  Only if using a broker is profitable for you.  That is the best measure.

If you have questions or thoughts to share, please use the comment box below.