My Stock Market journey and advice based on my experiences
This is my story, and before you get excited, there is no happy ending! I wanted to share my personal opinion about the stock market. I’ve some tips on what I do now, This is not an investment advice, so please don’t hold me accountable for anything said in this article.
If you’re thinking, is this guy going to sell any courses after all the ramblings? No, I’ll not be selling any courses about Stock Market now or ever. So if you’re interested, please sit tight and follow.
I’ve been religiously following the stock market for the last 12 years. Not so much lately, but I do take a peek at daily numbers and watch major stocks as it’s cemented into my daily habits.
For some background, I’ve taken many courses on stock strategies like day trading, swing trading, long-term investments, options trading and spent around 30k. These are from big schools like the trading academy, sjoptions, and a few other mentors. I was doing day trading stocks for a while, but I didn’t make any money, and then I got hooked to Options where you can learn how to control risks. But Options is a very dangerous vehicle if you don’t know what you’re doing. From various gurus, I learned every strategy, like vertical spreads, Iron Condor, ratio spreads, and custom strategies. I’ve tried every technique and was not successful in the long run! I’m not saying it won’t work, but it’s not for everyone. It is hard work, and you need time and patience. More than time, it’s patience that is very important. I don’t have the patience based on my character, and that’s why stock market investing is not for me. But I’m convinced of a few simple strategies that I’ll discuss below.
For close to 10 years, I’ve made money, lost money, had some happy days, and had some sad days doing day trading and options trading. Some days I even made 50K. I’m not exaggerating. Those who have been doing this may understand what I’m talking about. When you get into that level of trading, you get into gambling mode. So eventually, you’ll end up losing money. As they say, it’s a zero-sum game, and all you end up with is stress with nothing to show for. If I had followed the strategies outlined below, my investment portfolio would be pretty sizable, but that’s not the story. For example, I bought 1000 AMZN when it was $220, 1000 TSLA at $270 before the split, NFLX at $40. I was there when the stock market was rock bottom to buy and sell when it moved $10 up or down. In hindsight, if I held those stocks till now, it’s worth multi-million dollars, but instead I ended up losing a lot of money. I agree that no one could have made that prediction, but my point is if you simply bought and held for a long time, all of those stocks would have made a lot of money. But at least now I’m starting to follow my advice, so I don’t regret it in 10 years.
The main reason for writing this is to share my experience, be accountable for my own actions, and stick to what I’m doing which is working atleast for now.
Currently, I only do combinations of these techniques. Key is to keep it very simple so you don’t think too much when making decisions. I’m not going to give the exact details as well. These are high level concepts which you should adapt based on your risk tolerance.
Strategy 1 — Buy Index funds on down days
Since I watch the stock market on a daily basis, I wait for days when the market goes down for three to Four consecutive days and buy a few SPY or QQQQ. These are index funds and very safe when you invest for the long run. The main goal here is you buy on the DOWN days and dollar cost average and let it ride. Personally, I would invest 40 to 50% of your investable money in this strategy.
Strategy 2 — Buy Few Quality Stocks on down days
I have a portfolio of stocks that I watch based on sound fundamentals like TSLA, MSFT, IBM, AMZN, SQ, PLTR, etc. Keep a handful of these stocks and follow them closely to see how they move. A handful of 5 to 10 stocks is what you need to make money. Use the same techniques as Strategy 1 — Watch for down days on these stocks on the weak earnings report,s or some bad news, or due to overall market down days. Then buy 5, 10, or 15 stocks, depending on what feels right. There is no right or wrong answer here. But it’s smart to wait for the market to move down to buy these quality stocks. As Warren Buffet says, “fearful when others are greedy, and greedy when others are fearful.”
Keep doing this based on whatever money you invest. You should at least plan on holding these stocks for five years or if you double your investment.
Strategy 3 — Sell a PUT on good stocks
This is an Options Strategy and a little more advanced, but this is one of my favorite techniques. You write a contract to buy the stock at a strike price well below the current price when you do this. And in exchange, you get a premium. You need some sizable money to perform this strategy, and also your life shouldn’t change significantly if the stock goes to zero. That is why you do execute this on companies with good fundamentals.
There are various articles and Youtube videos on how to do it. But let me give you a couple of examples. Below is a screenshot of February 22nd options for TSLA. TSLA is currently at 1090 at the time of this writing. So If I ‘SELL A PUT’ at 900. All I’m saying is, if TSLA goes to 900 or below on February 22nd, I’ll buy the stock at 900. So the risk here is if TSLA is less than 900. But in exchange, I’ll get $3000 in my bank for two-month trade. Not bad, huh! Even if TSLA goes to 700 or 800 and I had to buy the stock at 900, I’ll wait until it moves back to 900 and sell it. My goal is not to hold the stock, but to get the premium and keep repeating it. For $100,000, you can make $2000 to $4000 every other month. Wait, you may ask what if TSLA goes to 100 or 200. Hmm, it’s possible, but without the risks, you cannot make any money. That’s why it’s essential to do these on the money you can afford to lose.
Again, this is a more advanced technique and something you can do if you want to buy the stock at a discount. The maximum risk in this trade is $90000, which happens if TSLA goes to zero. You can do this on cheaper stocks like BYND, PLTR, SAM, etc. But the premium may not be a lot.