Sunday, January 6, 2008

Make hay when the sun shines

This is an old saying but holds good even for stocks trading. I had completed building my portfolio in November with the stocks from NTGR, BRCM, AAPL and ATHR.

The market was very optimistic before the Fed's rate cut in December. My portfolio showed an 8% ($350) increase in the market value. I was waiting to sell them all, right after the rate cut - hoping that it would shoot up even higher. Some of the stocks in my portfolio crossed the price targets that I had for them. But, I was greedy and wanted to wait for more time.

The Fed announced a quarter point rate cut instead of a half point rate cut expected by the wall street. Wall street became very unhappy and there was a huge sell-off right after the Fed's announcement. I saw the stocks grow by 8% and fall to 1% on the same day. I missed the golden opportunity to make money.

I have been waiting for about a month since then and the stocks never reached that pinnacle.

The lesson here is "Sell the stocks when your target is reached. Do not wait for the stocks to go up even higher"

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