the market can be pretty forgiving
I've made tons of mistakes since starting to manage my own money last december. And I mean tons. Some of them classic, bonehead mistakes. Some of my highlight reel:
1. I bought Textron (TXT) for $16. I doubled down when it dropped to $12, and held it as it went back up to $16... I added at 9, I added at 8, I added at 7.. only to sell it at $7 for a tax loss to offset gains from another trade. Talk about catching a falling knife.
2. I took a huge stake in DOW when it hit a 20 year low at $15. only to watch it go to $7 before selling it for a tax loss to offet gains from the same other trade.
3. I dollar cost averaged my way into MTW with an average share cost of about $6.xx . I held as it hit 4. I sold at $2.87 after a small pop from $2.50, taking a bloody bath and then some only to watch tha thigh beta ticker fly upward. Left a good solid 70% gain on the table in a week there.
4. I sold HWD before a 50% pop
5. I DIDN'T sell, trim, or hedge OSK for $9.xx when my average was $7.xx and watched it go to $4.xx
6. I caught falling knife after falling knife after falling knife. Sold some low, too.
7. I sold calls on C for $2.50 in march and saw alot of my shares go bye-bye when that thing all of a sudden rallied like mad.
Mostly I was dumb, except for a few smart things
1. I bought underpriced value stocks that weren't in favor (classic dremman / buffet / etc. contrarian stuff)
2. I had alot of NCX
3. I bet half the farm on financials, insurance companies, and BDCs around the early march lows and those have been rocket stocks since. I postd about hwy I was doing this in my blog in very early march.
So mostly dumb, a little smart, and .... drumroll... I'm nicely up with the market still down more than 10% from when I started.
And that, folks, is a fun time. Peter Lynch once said you don't have to get even 1/2 of your picks right to make money investing in stocks, and he was right.
Remember, things can and will change, things can and will turn around, and what is today will not always be. study options and hedging strategies and pick your stocks carefully, and then be patient. So don't sweat it if you screw something up, or if you're stocks drop for a while...
And also, the time of buy and hold isn't gone, as I see it, a new golden era of buy and hold is beginning as I type!