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).