I don’t talk about stocks very much, but I would consider the stock market a passive hobby of mine. It is a very fascinating time to own stock as the markets are all over the place. One day the market is on fire and you’ll add a few points here and there only to see that evaporate the next day.
Here’s a couple of simple trading tips that help keep me making money in times like this:
- If one industry is down, it means another industry has to go up. For instance, today my automotive stocks got nailed. But my oil stocks went up. When the economy slows it means bad news for high end retail and good news for Target, Wal*Mart, and other places people are likely to shop when short on cash.
- Have firm high and low points to sell. I’ve got a stock that has returned almost 100% in 3 months. It’s ripe for the picking and I can sell it comfortably knowing I’ve locked in an amazing return. Likewise, I’ve had some stocks that have “safety valves” built into my E*Trade account. It hits a certain number and I dump the stock to secure I don’t lose too much.
- Invest in companies that pay dividends. A lot of investors don’t like dividends. I do. If I made some money by investing in your company, dump it in my account and let me decide to invest it somewhere else.
I’m no expert. But we’ve consistently survived in good markets and bad. What are your tips?