Should I sell all my stock and count my losses?

[Nick Radge]

hmmm...


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Here is the equation:

non-licensed + General public + Bull market + leveraged environment = ?

 

[Seaking]

non-licensed + General public + Bull market + leveraged environment = ?

Bloody hell Nick, That's 4 things to add up, I can't find any of them on my calculator and no matter what I try it keeps coming up with nothing...

 

[wayneL]

non-licensed + General public + Bull market + leveraged environment =

-$1500?

 

[MichaelD]

I start trading about 2 months ago with $5,000. But my stocks have done nothing but go down hill and ive lost about $1,500 so far. Should i just sell everything and count my losses?

This may sound facetious (but it is not meant to be, it is meant to be good advice) - what does your trading plan tell you to do in this situation? Sell or hold?

Welcome to the crazy world of stocktrading where unfortunately without a fully worked out approach to the markets before engagement, new stock traders pay dearly for their education.

My suggestion - go out to a bookstore immediately and purchase at least one good book on stock trading and read it as if your money depended on it (since it does). There are many good books for beginners (and many bad ones), but the one I'd suggest as the friendliest read at this point in time for you would be Louise Bedford's Trading Secrets.

Having read the book, you will at least have some concept of what the correct answer for you will be in regards to your portfolio.


MichaelD

 

[Bobby]

-$1500?

Great Answer Wayne !!

Nick

Bob.

 

[clowboy]

WayneL,

Technically I think it should be -30% as it would be applicable to anyone and we all have differing amounts of capital

 

[tech/a]

OK fine he did the "not so smart thing" but he HAS asked a question?

The last thing he needs is to be told how thick he is---he knows that!

Now let him "Do the smart thing" and ask a forum what to do!

 

[The Once-ler]

Howdy frizie.

I'm down 75 grand this correction. WOW, that's bad. But I piled in 3 years ago and I was up 400 grand 6 weeks ago, now up 325 grand, so don't feel sorry for me.

I think you have learned a very valuable lesson. In your lifetime you will get back much more than the $1500 you've lost. It's true.

You probably shouldn't even be trading at your level of experience. Your basically funding the 10% of good traders who make heaps.

If I was you I would put the lot into Woolworths shares, learn a bit about the market and try again when your more experienced. You've done what happens at the top of every cycle. You've heard from friends or the media, about how well shares were going, you have got in at the very top and lost. Lots do the same.

Good luck.

 

[Realist]

If I was you I would put the lot into Woolworths shares

:nono:

Absolutely great company, tremendously overpriced though.

P/E of 22, dividend of 3%. :bad:

If Woolworths keeps growing it will own the whole of Australia soon, and that just wont happen!!


BHP or RIO or Westfield is the go!!

 

[Realist]

My suggestion - go out to a bookstore immediately and purchase at least one good book on stock trading and read it as if your money depended on it (since it does). There are many good books for beginners (and many bad ones), but the one I'd suggest as the friendliest read at this point in time for you would be Louise Bedford's Trading Secrets.

:bad:

My suggestion is to give up trading!!

The stress, tax, and brokerage fees, only lead to a death of 1000 cuts.

$1000 traded for a 10% price gain could be estimated at. $20 brokerage to buy, $100 profit, $20 brokerage to sell, $30 tax, overall = 3% return. You make $30. :bad:

Take up investing, learn how to buy great companies that are undervalued and leave them for as long as possible. Reinvest the dividends and become truly rich. You can forget tax and brokerage fees cause you aint selling, forget stress cause you don't care what happens day to day.

$1000 invested and not sold in a good company that pays dividends, for a 10% price increase over 1 year, equals $20 brokerage, $100 profit, $50 dividends, $10 tax on dividends = 12% return - you make $120.

4 times the profit of a trader!!

Is it easier to make 10% in a day,week or in a year? I can't make 10% in a day and never try, in a year is easy though!!

(sorry traders I just had to have this snipe )

 

[nizar]

I agree realist

Peter Lynch's research shows that if u were to invest a sum of money annually at the highest point in every single year (how unlucky), over 20 years u would make 10.6times ur money, and if u were to invest a sum of money annually at the lowest point in every single year (wat a champ), over 20 years u would make 11.7times ur money

Not a great deal of difference

In the last 30 years the FTSE is up by 19-fold

In the last 25 years the DOW is up by 13-fold

And of course some stocks outperformed massively

Why is it so easy to be profitable in the stockmarket in the long-term?

BECAUSE THE MOST U CAN LOSE IS 100% BUT THERE IS NO CEILING TO THE GAINS

 

[GreatPig]

BECAUSE THE MOST U CAN LOSE IS 100%

As long as you're not leveraged.

GP

 

[Realist]

As long as you're not leveraged.

 

[professor_frink]

I agree realist

Peter Lynch's research shows that if u were to invest a sum of money annually at the highest point in every single year (how unlucky), over 20 years u would make 10.6times ur money, and if u were to invest a sum of money annually at the lowest point in every single year (wat a champ), over 20 years u would make 11.7times ur money

Not a great deal of difference

In the last 30 years the FTSE is up by 19-fold

In the last 25 years the DOW is up by 13-fold

And of course some stocks outperformed massively

Why is it so easy to be profitable in the stockmarket in the long-term?

BECAUSE THE MOST U CAN LOSE IS 100% BUT THERE IS NO CEILING TO THE GAINS

Going back to the start of any bullmarket will make the return look impressive

here's flip side to that statement
3/9/1929 DOW-380

25 years later
3/9/1954 DOW 343

-9.7%.

The DOW bottomed in 1932 at around 40

My suggestion is to give up trading!!

The stress, tax, and brokerage fees, only lead to a death of 1000 cuts.

lol

 

[nizar]

Going back to the start of any bullmarket will make the return look impressive

here's flip side to that statement
3/9/1929 DOW-380

25 years later
3/9/1954 DOW 343

-9.7%.

The DOW bottomed in 1932 at around 40

lol

PF,

FTSE was from 1970 until now: many bulls and bears in the last 30 years

DOW was from 1982 until now: so that famous 1987 crash is included

But of course u can take the example of the biggest stockmarket crash in history; from 380pts in 1929 until 43pts in 1932..

 

[professor_frink]

DOW was from 1982 until now: so that famous 1987 crash is included

But of course u can take the example of the biggest stockmarket crash in history; from 380pts in 1929 until 43pts in 1932..

you took the one of the biggest bullmarket's in history so I thought I'd show the biggest bear! The 87 crash, whilst huge event, it wasn't a bear market in the DOW. The crash lasted 6 weeks then carried on upwards for the next 13 years.

The last secular bear in the dow was from 66-82
9/2/66 DOW 995

9/2/82 DOW 780

-21%

Looks even worse!

I didn't look at the ftse so I won't make any comments on that!

 

[Joe Blow]

My suggestion - go out to a bookstore immediately and purchase at least one good book on stock trading and read it as if your money depended on it (since it does).

No need to go to a bookstore. You can buy hundreds of stockmarket/trading books from the ASF Investment Shop and get a warm, fuzzy feeling knowing that you are helping to support ASF!

 

[powerkoala]

Guess ur nitemare just started...
how much u lose today ? :

 

[Realist]

Going back to the start of any bullmarket will make the return look impressive

here's flip side to that statement
3/9/1929 DOW-380

25 years later
3/9/1954 DOW 343

-9.7%.

ahh, but Professr Fink, (if that is your real name?). I believe you would be ahead over that time. Because "u invest a sum of money annually at the highest point in every single year".

For most of those years the dow was under 343.

You lose on the shares you buy in 1929 sure, but in 1932 you may have been buying when it was less than 50, in which case you'd maybe make a 700% increase on those shares. Add in dividends reinvested you'd be miles ahead!!

 

[professor_frink]

ahh, but Professr Fink, (if that is your real name?). I believe you would be ahead over that time. Because "u invest a sum of money annually at the highest point in every single year".

For most of those years the dow was under 343.

You lose on the shares you buy in 1929 sure, but in 1932 you may have been buying when it was less than 50, in which case you'd maybe make a 700% increase on those shares. Add in dividends reinvested you'd be miles ahead!!

very good point. Here's my 'but'- During the depression most wouldn't have had money spare to put into the markets, and that's if they even had a job! (slightly off topic and completely unverifiable on my part but thought i'd through it in there). Do you know if many companies paid dividends during that time? Not being an investor I don't know so you'll have to fill me in on that one.

If you were able to get out before things got too bad you would have had alot of capital to reinvest. Which goes back to what I mentioned to you in another thread about buying dips(even further off topic but worth mentioning)

p.s it's not fink it's frink, so no it's not my real name