Week 6 Market Recap

Week 6 Market Recap

Week 6 was a bad week for me as I lost even more of my money. The week before on Friday I bought a gold ETF named NUGT, hoping that the gold price would go up, and I could sell to profit. My strategy was to keep buying and selling with a 1-2% profit, so I can slowly make back the capital that I had lost. Unfortunately this week the price of gold crashed and the stock I was in fell 38%. This was a huge hit for me and I lost a ton of my money. I made the decision to not sell the ETF this week and see where it would go next week. I did not want to take such a big lost from this crash, so I plan to wait till the price of gold goes back up until I sell it. With this gold crash I was able to learn that gold is very volatile. There are many things that can cause the price of gold to move, and it is important to keep up with the factors causing the price of gold to move. I also learned the importance of diversification in a portfolio. Most of my portfolio was made up of this ETF so I was not able to balance my losses with gains from other stocks. Hopefully the price of gold will go back up and I am able to make some money. 

The other company that was in my portfolio was Twitter. I made the decision to buy shares of Twitter because there were rumours about multiple companies trying to them out such as Google and Disney. From the market recaps in class there were a few times where companies were bought out and the stock went up a lot so I thought of this as a good opportunity to buy in. I was right as the stock went up by 4% mid week. I should have sold out because the stock price crashed the rest of the week, but I was greedy and wanted to make more because I was losing a lot of money from gold. The reason the stock crashed was because more rumours were released that the companies are no longer interested in buying out Twitter. Investors quickly wanted to sell there shares, but I unfortunately did not. I thought that the stock price would only go down a bit so I can still sell for a profit. I was wrong about this as it crashed 30%. I learned that as soon as big buyers are no longer interested in buying a company I need to back out quick and sell as the value of the stock will crash. 

Overall I am disappointed with my progress in the market this week. I made bad decisions and often held onto my shares for too long. I need to find new companies to invest in and learn when to let the stock go. I am not sure how I can make back all the money I lost ($46,965.86). 

Week 5 Market Recap

Week 5 Market Recap

Week 5 in the market was another unsuccessful week for me. I made no progress and lost some of the money that I earned back last week. The main reason I lost a lot of money is because of the Nike stock (NKE). Nike released earnings after market closed on September 27th, so in the morning I bought 1219 shares of the stock for $54.92, expecting the share price to go up, as I knew Nike had been doing well this quarter with the releases of their Roshe, LeBron, Air Max and KD shoes. I was waiting for the earnings report that night, and I was very satisfied to see that earnings per share were $0.73 which is $0.17 high than what was expected. On top of that they also announced that revenue was up 8%. I thought for sure that with a good earnings report like this the stock will shoot up. I was wrong. The next day the stock dropped 3.83%. I was devastated and did not know what happened. I followed through with some research and learned that the reason the stock declined is that the investors were not happy with the companies future orders. Nike expects worldwide orders between September 2016 through January 2017 to rise seven percent after excluding the impact of foreign exchange. If this is true, it will be the companies lowest future orders growth rate in the past year. Although the stock crashed I felt like this was another very good learning experience for me. Prior to the crash of Nike, I thought that the earnings were everything. My mentality of investing has totally changed as now I know that there are other factors that can effect the value of a stock aside from the earning per share. I know that there are a lot of times where if the earnings per share of a company is doing well then the stock will go up, but now I learned that there are exceptions, therefore I need to be careful when investing in a stock. The decline of the NKE stock was very disappointing for me but I am glad I was able to learn a good lesson out of it. I currently did not sell the NKE stock yet as I think that it might recover at least a bit next week. It is currently down 4.12% from when I bought it and if it drops below 4.5% my stop loss order will automatically sell it. 

This week I did not do a lot of trades as Nike and Disney were holding up a lot of my shares, but another stock that I did invest in was the S&P MidCap 400 Dividend Aristocrats ETF (REGL). This was a VERY VERY stupid of me because this ETF is for Dividends. I bought 1789 shares of this stock for $46.18 and decided to sell it at the same 3 days later when I realized what this stock was for. After the Nike stock I was really just so fed up, and googled ETF's to make quick money in. The first we websites that came out said that REGL was a good ETF to invest in, and with only looking at the stock chart, I bought it. This was so stupid of me and I wish I had never done it because it wasted my time and buying power. The only good part that came out of this situation was that I learned what the S&P MidCap 400 Dividend Aristocrats and the ProShares S&P 500 Dividend Aristocrat are. Like the Dow Jones that collects the top 30 stocks in the NYSE the Dividend Aristocrats collect the top 400/500 for dividends. You can actually invest in them and make dividends off of it.   

Overall the week was another bad week and it is essential for me to stock making reckless trades. If I want to climb back up, I need to put in a lot more research in stocks and the market before investing in something.