Market Basics 101

In the past, I have always left our personal investing up to my husband, Darren, since he was a broker for several years, but now I manage my own IRA account. He even lets me buy and sell in his account, too. He's a very brave man. Before I became involved in trading, I never realized how reflective the market is of fear. I had no idea what a VIX index(I think I said that right) was, and if you told me they existed before I started trading, I would have said that's crazy. I still say it's crazy, but the market is a mirror of man and his relationship with money( I know that's not politically correct). Fear of losing money forces its way to the forefront on a daily basis on Wall Street, and guess which way things move when fear is in the lead and the VIX is high? DOWN. Isn't that just the most logical connection? Of course, following that line, when optimism abounds, everything goes UP! That's my lesson 101of market basics.

There are many graphs and charts and models and voices available to follow in market decision making, Cramer and Weiss and Motley Fool and so on. One says Yeah! the other says Boo! One says Bear! The other says BULL! Really, I think both sides are right. It's a bear to keep up with, and the whole thing is probably a lot of contrived bull. Another market puzzle to me is that almost anything can affect the mood of the market. The President sneezed last night, and the drug companies are running out of flu vaccines. SELL! SELL! Christmas is just around the corner, and Howard Johnson was raised from the dead. BUY! BUY! Actually, it's far more a world of make believe than Disney ever was.

Lesson 3:  When to sell. Darren taught me to watch my percentages of gains and losses regularly. When my percentage reaches a certain amount( I think he said 10%, but I'm not sure any more. It's probably good he doesn't read my blog.) high or low, then I sell. That works well for him, but I use a modified version.. My method does not involve a calculator. It involves color coordination. Red/Green color blindness will exempt you from my strategy of market watching. It's a simple method, and I like simplicity. It's this. Watch your account profile for red or green. If it stays green and goes up a few bucks,sell it. If it stays red more often and goes down a few bucks, or it's bothersome to watch,sell it. Always listen to a bit of gloom and doom and follow it slightly and a lot more optimism, and follow it strongly. It's worked out for me pretty well, so far. However, today everything is red AGAIN.  It's been red off and on for a few days now. I'm thinking I could possibly need some more strategies, but that might mean a lessen in buying short or commodities or something else that could get very confusing. I could possibly have to start using a calculator every day. That thought alone is raising my VIX index, so I'm not going to stress. I trust my red and green method. I'll just continue to believe in it, and it'll be fine. After all, speaking of red and green, I did get that picture of a bright red cardinal I asked for in my green tree. I'm visualizing a green come back already! SELL! SELL!


Then Jesus came over and touched them. "Get up," he said. "Don't be afraid."  Matthew 17:7

Peace.

Love, Linda