Buy Amazon or Daytrade? $AMZN
This past month of October has not been the kindest to investors, FAANG stocks were hit the hardest and the marijuana stocks did not perform as well either. The penny stocks saw random blips of performance like they usually do but what is an investor to do during this past month of volatility? Buy and hold the big tech companies or dabble in the dangerous waters of day trading? I'd like to express by experience throughout this past trading month with humble lesson below.
FAANG. Facebook, $FB Apple, $AAPL Amazon, $AMZN Netflix, $NFLX and Google $GOOG. If you've been anywhere near the stock market I'm sure you've seen the acronym, a symbol of the giant tech companies who dominate a large portion of the market with giant earnings and a product in almost every household. The stocks have all seen amazing growth over the past 5 years however some like Amazon and Google traded around 2000 dollars ($AMZN) and 1200 dollars ($GOOG) towards the beginning of October. Then it happened, the correction. Some still believe the correction has ended and we're rising upwards and yes we've seen a tick up today however amazon dropped to a close of 1530 on 10/30/18. If you purchased just two shares at the beginning of October you would have lost close to 1,000 dollars. That is just SOME of the craziness that investors went through last month, and even i (who daytrades frequently) had to re-evaluate my trading fundamentals, averaging down my position and stop lossing my self into a negative for the month.
So, what do we do? Do we sell everything and hide? Do we "buy the dip?" Do we just wait it out and see?
These are complicated questions, currently $AMZN is trading at 1741 per share, up 99 dollars from the open, thats great, but still down over 250 dollars from last month. Experience will tell you to buy and hold, this will pass and although this may be true, if you bought during last month you could still be looking at a red screen.
I'll be the first to admit that my trading experience had not seen a month like that before, that usually on a penny stock you can be in and out of a position in the green and take home moeny. This buy and hold strategy was new to me and i have learned a lot throughout this past month and am able to say that when i stuck to a plan, and only entered into trades with a plan have i managed to get back into where i was in october.
The lesson to learn here is to always educate yourself before you trade. If you are not comfortable with the cost of some of the stocks stay away and build slowly. I'm green because I've learned that lesson in the past but during the FAANG craze i bought stocks i had never bought, having over 10 shares of $AMZN and more of $AAPL and $FB im happy to be back to full confidence.
What a ride last month has been with a lot of people learning lessons while others got burned.
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