This is a summary of what I was doing and why i got into a little bit of trouble. I started saving money and payed off my debts. i am debt clear now. I started investing modestly and I got good returns on CMG and DPZ. I made 25% profit with a modest amount of 5k capital. But I knew the time of my entry was not the best. Stocks were already near their 52 week high and the Dow has reached 10K and was moving towards 11k. I knew that this is the phase of over extension of the rally from past year. I did not have money to pay of my loans and I cautiously payed off my loans instead of investing in the right growth stock. I was just afraid of losing money again after a horrible experience last year.
then I made 1k profit. the Dow was 11k. Confidence was fading in the market. Debt and Euro problems in europe. Political instability in here in U.S. 30 day MA of Dow started to cross and move down. That was the time stocks like DPZ and BKS were slumping from 52 highs. I knew this was the time to short the market.
But I was too cautious and did not take the right decision. Instead I was trying to catch the falling knife and pay them and average them down. The blunder mistake that can ruin anyone.
This was the first time experience after my major loss last year and after I read the best book about stock market. I am still inexperienced. But now I got the experience real time. I promise to follow the rules.
Never search for dividend long term stocks when the market is falling. Just leave the cash as it is or short the stocks on may be 3-4 stocks. Put sell limits on 30 MA. I would have made 30% profit if I did that. but I did not do it due to lack of experience and confidence to do it. I have learnt a lesson. One can make money on the market up and down. Investing in dividend stock is a was of time and money. It is dangerous if the dividend stock goes down and down like BKS. I wanted to take a little risk with it and this stock started to slump 20 %. A loss of 700, but I got lucky with IDT and made the money back.
I wand to invest in IDT after the first pull back. there is high volume. the only problem is the general market conditions. I hope it is not becoming worse.