I bought some stocks last week. It was late Friday and everybody was hurting. Me, too. I've neglected to set my stop loss limits, and the stocks took a free fall to the ground. Seeing your portfolio lost 40% of its value is definitely not fun!
Still, I am one of those people who sees positive things in life. "Well, if this is the absolute worst bottom I've seen, then anywhere I go would be UP!" Yep, bought some more stocks. That was Friday, October 10.
I bought GM stocks when it was trading around 5 dollars. I figured, it pays $1 dividend. That's 20%! That's how credit card companies makes money, you know? It was a standard rate when the price hovers around $20-$40. $5 is an absolute bargain! I'd have spent $50,000 had I have the money. I have it set to DRiP, Dividend Reinvestment Program. How can I lose? If the price went up, I make money. If the price went down, I get more of these super shares! Well, there are ways. They can cut dividend, as most cash strapped companies most likely do, which would cause the price to drop for the now useless shares. Alternatively, they may merge shares, which would indicate big trouble at the company. Huge insider selling and share merging are two indicators I should exit the position and cut my losses.
All these talks about GM declaring bankruptcy, I don't believe it. GM is too big for that. They'd sooner sell off assets than declare bankruptcy. Their attempt to acquire Chrysler got disrupted by market crash. I think they'll be fine. Good management I've seen so far.
I also bought some Microsoft stocks. This was based on a tip that they recently split their stocks and increased their dividend. So I bought some. Then I do research and found out that they did it last year. That's not recent! I didn't make out too bad. Anywhere I go is up. However, that'll be the last time I act on hot tips without checking.
Lots of learning this last week. Trend lines, APR, and ROI. This has been an intense, chaotic week. It is just the way I like it!