Saturday, October 2, 2010

Kicking some index ass

I don't know about you guys but so far this has been a good year for my portfolios.  Year to date my ROTH is up 16.25% and my taxable account is up 18.84%.  To put those percentages into perspective, the S&P500, NASDAQ, and DJIA are up 4.35%, 4.48%, and 5.98%, respectively.  That means for EVERY $1,000 that I have invested, I made about $100-130 more than the indices did.  I find it funny that I've read a lot of articles saying how the common investor is better off in the long run to stick with indices because if they just trade on their own their profits will be eaten up by their brokerage commissions.  
Just some background:  I am by no means a professional trader.  I have only been trading for about 5 years or so.  Back in the day I started off by throwing a hundred dollars at 5 or so different stocks and basically tried reading and learning as much as I could.  From my experiences, the best way to learn anything is to jump right in.  Reading is fine and dandy but until you have money on the line (no matter how little) you won't get as much out of it.  Keep in mind that had I started all over again today, I wouldn't throw $100 at a few different stocks because let's say that $100 worth of shares costs us $7 to buy the shares and another $7 whenever we want to sell.  That means we need to make $14 JUST to break even.  Lucky for me I did pick a few winners when I started out.  As my experience grew, I was more confident in my abilities and invested larger sums of money and my love of equities grows everyday.  I currently am both buying call options and selling covered call options.  I think it's a valuable tool to have and a great way to leverage your money without having to use margin.  I'll make sure that I go into depth on options in future posts as well as keep you posted on specific trades (both the good and the bad) so you can hopefully learn something from this.  I know I kind of rambled so get ready for a lot of that.  This is MySecretPublicProfile, not Yours so I'll ramble whenever the hell I want :D

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