Author Topic: Do you trade, invest, or both  (Read 1965 times)

Honest Abe

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Do you trade, invest, or both
« on: January 12, 2013, 06:58:35 AM »
I'm guessing that most people here don't "trade" securities exclusively, but I'm interested to hear other people's thoughts.

Myself, I'm 90% an investor and 10% a trader. Most of the time that I buy a company, even one that is a growth company and doesn't pay a dividend, I intend to hold it for the foreseeable future, and certainly more than a year. What I've learned that that when I've bought good companies for a good price and tried to trade around my position, most of the time I either lose or don't come out anywhere near as ahead as I would if I just held on.

There is, however, a spot in my portfolio reserved for small bets to trade on. For example, I'm currently holding some SLV that I bought when silver was trading at $29/oz. I'm not a silver bug, nor do I play one on TV, but I felt that $29 was a good support level and I fully intend to sell my position when the price of silver flirts with $35/oz. I also like to do this with USO from time to time

But that's about it... Otherwise I buy shares of old standbys such as MCD, KO or GE etc. (XLF is my new favorite too.) and reinvest the dividends. I've also been putting extra money into Betterment when I have the cash to invest but not the time to research my next position.

Anyone else supplement their investing with a bit of trading?


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Re: Do you trade, invest, or both
« Reply #1 on: January 13, 2013, 11:55:58 PM »
I am 90% an investor as well. I'd like to stay in a stock long term for the dividends, but I have other stocks. For instance, I was in TSLA at 22$, and at the beginning of 2012 when it shot up to 35$, I sold out because I saw the stock being stagnant throughout 2012 from that level, and that was 5000$ in profits. Another short term story I'm in right now is Nokia. I don't really care to be in it in 2014 and beyond, and i don't care about tablets and what not, but I do believe that at any level below 4$ it was extremely undervalued, especially with the good news coming out about it. Now at this level I'm willing to sit on my shares after taking in some profit and see how the story changes.

So, basically I spend about 90% of my efforts on 20% of my stocks. Most of my money is sitting in longer term investments(Intel[dividends + 2014 mobile effort], Ford, Sirius XM[stock buybacks, growth, liberty media control], AIG, TGH, WM, CSCO).

The best source of long term gains I feel is good dividend paying stocks, but that isn't to say that people can't make money doing other things, but from Stocks for the Long Run and Intelligent Investor, I feel safest with the majority of my money there, and a smaller amount of "play" money.


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Re: Do you trade, invest, or both
« Reply #2 on: January 14, 2013, 02:49:27 AM »
Ditto to the responses already.  90% of my investment is in "buy and hold", either blue chip stocks or low cost ETF/LICs.  However, I do dabble in other stocks, with the recognition that its very much short term punting, and a bit of market timing. I'm quite frank with myself that these are pretty much gambling, and I track them pretty closely to keep myself accountable.

Most of my speculation has been on ASX listed stocks (I'm Australian after all), and has included:
FKP - bought when then announced a capital raising, sold a couple of days later, +$1082.  Had I held to date, I'd have lost -$4628.
VAS (Australian ETF), Sold holding of 900 shares in April.  Re bought 1000 shares in June (10% fall), sold August for a total profit (short and long) of +$7553.  Alas, if I had continued to hold these, I would be up another $3,500.
BBG two trades on this one, both when it was in the doldrums, sold when takeover proposals received +$3131.  I'd be down more than that had I held to completion.
BSL.  Took a punt on this one when they did a capital raising, sold off for a loss -$400.  Had I held to date, I would have been up +1983.
QBE. Sold and re-bought for a profit of +1750.  Market timing.
BLY. Bought after a downgrade, took the dividend and sold for a profit of +$1095. If I'd held to date, would be up another +$3520.
JBH.  Bought and sold for a profit of +1034. Holding would have been an additional +$1080
FXJ.  Bought and sold for a profit of $267 (really getting out once it broke even again).  Holding would have been another +$1700
CSL.  This one is open at the moment, I sold off half my holding after the stock rose 80% in a year.  Its back down a little, so I'm up $760 on paper so far.  If it comes back down a bit more, I'll buy back in.

Overall, I've generally profited from these trades.  But with a couple of exceptions, I'd have been better holding these to date, rather than exiting!