If you have been following the stock market, it has been swinging wildly from one end to another end. All of us who are in stock investing obviously want to make money by buying low and sell high. However, for the past several weeks it has been a lot more difficult. Looking at my portfolio, most of my stocks (particularly in the equity) are on the negative side.
The question that I am trying to answer today is when do you actually buy or sell the stocks. It is very difficult to predict what the market would do consider because of my factors. Even though some of the businesses are doing well, their stocks are not. While some stocks continue to do well even the market condition says otherwise.
If you follow my blog, I put a majority of my investment in safe stocks such as Microsoft and Apple. The other holdings that I have are ETFs which are relatively safe. One third of the rest of my assets are in stocks that swing wildly; these are the stocks that I am willing to buy and sell and these are the stocks that I plan to make most money from.
The past several weeks have been difficult because majority of the stocks that I plan to sell are being depressed. Not only I am not making the money, if I sell them today I would incur some loss. What strategy should we use when it comes to these holdings?
There were a few times when I realized that some stocks I bought went up enough to make enough profit. Immediately after I sold the stock, the stock continue to climb. Conversely, there were some stocks went up to a level that I thought it was worth to buy. Instead, those stocks continue to come down to a level that I’ve ever seen before. Is that what we call buying / selling remorse? All I know is I feel like kicking myself on the behind.
I don’t think there is one way to deal with the fluctuations. Some would argue that you need to study the company, understand its market share and consider its prospect. Unfortunately, not all of us have the time to really study each indices. Even if you spent those time studying them there are not always spot on. One good example is the NIO, the electric auto company from China. For the past several years NIO was a good buy because of its prospect. Its stock price went up as high as $63. The first quarter of 2021 showed increased sales and that’s good news. Instead of expecting the stock price to climb up it continues to drop.
The strategy that I continue to follow is quite simple: Hold. The portfolio that I have continue to include companies that are more stable. Some companies such as those in the pharmacy are not as stable but they make up a small percentage of my holdings. The risks of my portfolio are considered low. My only option is to continue to hold these holdings and hope they will go up.
I would love to hear your strategy when it comes to dealing such uncertain market conditions.