Playing the Stock Market

06/25/2012

Maybe I just don’t get it. Maybe I’m disillusioned. But it seems that the real trick (which seems like no trick at all) to “beat the stock market” is patience. Patience. There’s so little of that these days. People – advertisers, investors, marketers, boards of directors – brainstorm and work so hard to retain our interest, ranging from the duration of a movie to the duration of a commercial. When that patience fades and you start to mix in a little fear, you end up with something that can get very ugly.

The part of me that may be disillusioned and allows me to perpetually keep a positive outlook is that I can’t recognize the things I don’t know… blissfully unaware, I suppose you could say. The more I learn, the more I realize there is a science to everything. And the more science explains a story, some of the magic can start to disappear.

I currently own one stock and am weighing my options for buying more in different companies. The stock I do own is the result of an Employee Purchase Program. It was kind of a fluke… I signed up for the program without really thinking it though.

The employer would set aside 5% of my check every week, figure out the lowest price of the company’s stock for the quarter, then give me a 10% discount off the stock. Then that weekly money set aside would be used to buy the stock. At the lowest point, I bought stock for $00.88. That’s right – I bought stock when it was on its way to being worth nothing. Then it turned around. It climbed up to $12+ at its high, and it’s back down now to $7-something. That’s still not bad…. and, for me, it was all on a whim. Also, don’t think I’m a bajillionaire now because I’m way, way, way far from that.

Where this decision to buy worked out, I also could have bought a flop, which is what happened with the stock from my other job at the time. My boss there said “You don’t wanna buy that… media stock is never worth anything.” I thought about buying some anyway but didn’t. About a year later, that company’s stock was delisted from the New York Stock Exchange. Not good.

At this very moment, I am at a crossroads. It feels like I am in a very adult place at this point, where I have to weigh my options and try to make the best decisions for myself and my family. I keep thinking about dumping the shares I have but can’t ever make that decision hit the “sell” button and jump. I set a target sell price when it was over $12, then missed it when it dipped below that mark. So now it’s like “I should have sold then……buy maybe it will climb back up.” That’s where patience comes into play. One of my family members lost a lot of money in stocks 20 years ago. I don’t know what the stocks were exactly, but I have to wonder how the price compares today to what it was when she decided to sell.

Anyway, it’s time to diversify. It’s a lot of decision-making to prioritize my list of potential buys, which consists of some cheaper, industrial companies (for now, HAH-HAH!!!) and some blue chips. Whatever happens, when my gut stops telling me conflicting things, I certainly won’t be putting all my eggs in the same basket.

Whoever thought diversification would be so hard? Yet the whole process is also very liberating at each step, when you’ve saved up enough, a little bit at a time, to put away for decades.

I guess no matter what happens, I just need to remind myself to breathe… and to have a little patience.

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