Tuesday, August 09, 2011

That Crazy Stock Market

How are you riding all these bumps in the road? I was appalled to see the huge drops in the market last week and yesterday, but I also tried to view them as an opportunity to invest at a lower cost. I pulled the trigger this morning and bought some shares of Ford, Kroger and Bristol Meyers Squibb. In the last few years, I've generally stayed away from individual stocks and kept to various mutual funds, mostly the low-cost Vanguard index funds. But I guess I was feeling a little reckless this week, so I used the E*Trade screening tools to find myself some companies with lower P/E ratios and some earnings growth, and then picked these three. We'll see how it goes-- I bought first thing this morning, and by the end of the day, Ford was up almost 4%, while the others were down more than 1%, but my net for the day was a slight gain-- maybe $20! But I'm not trying to be a day trader-- I'll hang onto these for a while and see how they go.


Doug said...

Ford was a good pick.

It's funny, lots of people pulled out of the market Friday and Monday because of the downgrade. And where do you think many of these people put their cash for safe keeping?

Gold and other metals? Yes.
Mattresses and bank acounts? Yes.
Into the very same Treasury bonds that were downgraded and started the panic in the first place!

Guess AA+ isn't so risky after all.

T'Pol said...

This same thing repeats itself every once in a while and I guess many people still panic when the Stock Market loses value a bit. If you are a long-term investor, sit tight, buy shares at a discount and ride the wave. I do that.

Michelle said...

The volatility in the market right now is insane. Good job on the gaining $20!

Super Saver said...

Of all the car companies, I like Ford the best. However, I lost money from buying it in Jan 2011 and selling it in June 2011. Then I shorted Ford in June 2011 and made money as it declined. I closed the short position on Aug 9, 2011 for a profit. I think Ford will more likely go down that up in the near term.

I think Kroger and Bristol Meyers are good defensive dividend stocks. People need groceries and medicine, even in a recession.

Good luck on your investing.

aluma said...

It is really a problem when stock market lows a bit value. It affects every thing, from simple person to a big company. Great review! we have to monitor it as long as we can.

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Connecticut Blogger said...

I moved about $5K from an IRA Vanguard money market to a Vanguard index fund.

although it is unnerving when they say some of the pros are advising their clients to stay out of equities for good.

Frugal Under Forty said...

I've been reading a lot about options trading lately. It's a lot more complicated the just buy-and-hold. But the up-front costs are far lower, and you can make money in bull, bear or flat markets. I confess that I got a bit lucky. But this past Tuesday I bought some options on Netflix and Amazon and sold them back about 4 hours later for a $500 profit. I don't think I'm savvy enough yet to do that consistently. But for an up front investment of about $300, it was a solid gain.

I'd recommend reading this book if you're interested:


Anonymous said...

Try selecting from strong, stable, undervalued companies with wide economic moats. This way, it's easier to stick with them in choppy times. Morningstar is a good resource for this. You can download their list for free during a 14-day trial.

Brad said...

I would stay the course and look for value buys right now...looks like you're doing just that. Panic is how most folks are separated from their money in the market.


Cherleen @ yesiamcheap said...

I can't understand why people are pulling out and selling their stocks, simply because the market was down for a day or two. I still think it was not a wise decision. On the other hand, buying shares from Ford is a good decision.