Trading Dreams and Stocks to Watch

Trading Dreams Can Reveal Good Ideas 

I have always been prone to having work dreams after I’ve been at a place for a while. When I was a very active trader, price charts were a constant occurrence in my dreams in which they had the strangest capacities. For instance, I couldn’t open a door until a stock price went up another 50 cents. Or I couldn’t get to a party until I made $1000 on a trade, so I’d have three trades open. Weird stuff like that.

I had one profound dream where I was talking to my buddy about stocks. In real life, I knew he had gambled unsuccessfully on penny stocks and sports. In this dream, we were catching up while looking at a glass wall that had a stock chart on it.

He told me that he stopped wasting his time on penny stocks. Instead, he decided to keep things simple. He bought the stock of a company that made sense to him. This company started to become successful rather quickly. Every time he had extra savings, he would just buy more shares and increase his position. Over the next five years, the stock kept going higher in share price. As he explained this, the chart on the glass wall started to grow live on a timeline. The chart finally stopped moving once it reached the present day. At that point, he was up $18,000 with that one stock.

Scaling In

While I don’t believe it’s a good idea to put all your money into one stock, I do believe in the strategy of adding to a good position. At the time of this dream, I wasn’t confident enough in my own methods to add to any position. If anything, I was exiting too soon. Over the years, I got over my fears; it eventually became a practice I employ in the situations I feel most confident in.

I’ll often decide on a stock because I like the chart and its sector. My initial strategy might be shorter term. I might sell shares to take profits or lighten my position and just keep some shares for the longer term. Other times, I’ll change my outlook. If the chart and the stock show more potential for longer term growth, I’ll buy more shares of it at the next opportune setup.

I don’t think of investment decisions in definite terms because there’s no way to predict exactly how much you’re going to make. I like the idea of interacting with your investments over time in order to be fluid with the demands of the market or to take advantage of new opportunities that come up.

My Own Stocks

The market has been doing a nicely controlled correction – thankfully, it hasn’t dropped rapidly. I don’t know if it will react further to the news next week if we find out for sure that interest rates will go up. The market doesn’t like surprises, so if interest rates do go up, then there should be no major shock to the market. If anything, the anticipated news is already priced into the market and we can move on once it comes out.

I’ve been casually looking for stocks, yet I haven’t been very inspired by much of what I’ve seen out there. When this happens, I become more interested in watching how the stocks in my own TFSA portfolio are doing. Some of them are either consolidating nicely or seem to be doing their own thing. Here are some of my stocks that I might scale into:

  • ZPR.TO
  • MSI.TO
  • ECN.TO

These other ones I’ll be watching for more confirmations from the sector and/or market:

  • BBD.B.TO
  • EXE.TO
  • TECK.TO
  • APH.TO

This week, I was actually considering buying shares of APH.TO for the RRSP, but it’s not quite ready yet. I know this one is capable of developing really good patterns. Once I see the trading range tighten, the selling volume lessen, and a pattern improvement on the daily and weekly charts, then I’ll pick the price I’d like to enter at and I’ll put in an order. I’ll give it another couple of weeks. If it ends up going up while I’m waiting for these things to align, I won’t be too concerned if I miss the run. It will either set up again later or I’ll find something else.


N.B.

The last thing I want to do is to make stock calls for the purpose of getting others to pump up my own stocks. I tend to pick stocks that trade higher in volume, so price jumps are less likely to occur unless A LOT of investors step in. I lack that kind of influence – this is a low-key blog, not BNN. I expect investors to do their own necessary due diligence before making investment decisions.

 

Couples Who Invest Together Stay Together…Right?

Beach Talk

“What do you mean you have a bunch of money just sitting there?!?”

My forever man, JP, one of the calmest people I’ve ever known, had a mini conniption when I casually told him that I had a large chunk of uninvested cash in my TFSA. I had no explanation to offer other than a sulky, “I’ve been too busy to figure out what to get.” Saying that to someone who is busier than you won’t get you far. Thankfully, this conversation happened on a sunny beach in Florida last week, so it wasn’t hard for him to simmer back down in the face of my cringe-worthy apathy.

“Just buy anything that pays a dividend. Buy more shares of ZPR or SPB. Anything. How else are we going to retire in five to ten and live off dividends if you don’t have those shares? You know what to do. All your money should be working,” he gently advised before taking a deep swig of his particularly strong grapefruit juice and returning to his beach reading. 

I couldn’t argue with him about putting your money to good use – I tell people to do this all the time, after all. Now that I’m back from vacation and resettling into my icy reality, I’m ready to hunker down and start looking for stocks again.

We ‘Split Up’ and Went Our Separate Ways

When we were learning about stocks, JP and I started off trading together. However, we discovered the hard way that we often had different ideas that threatened the other’s need to try something a little off-script. We then split our account into two and started to operate separately. As our respective accounts grew, so did the number of accounts. We each now have three trading accounts.

We now share our ideas, but that doesn’t mean we act on them. Sometimes we’ll take the exact same trade, entry and all, but many of our trades are done without telling the other until later. It was when we started making independent decisions that we started to see our respective portfolios truly take off. The reason I think this improvement in portfolio performance happened is because we wouldn’t get shaken out of our positions due to fear of trade criticism.

In chat rooms, I’ve seen traders and investors criticize each other’s decisions. This is why I left chat rooms. People always share ideas and then sometimes scare each other out of taking chances or out of the trades they already took. It’s already bold enough to take a position, the last thing you need is an outside voice to instill fear or add doubt. If you invest from a position of little faith, you will have incredible difficulty at succeeding financially.

Whether or not we totally agree with each other’s stock picks, JP and I support and trust each other’s decisions because we share the same long-term vision. We want to have a second property in a hot place, we want most of our income to come from our investments, and we want to help others learn how to achieve their financial goals through investing.  Most importantly, we want to help each other become better investors.

Moving Forward in Harmony

For 2017, I resolved to be less of a ragtag investor. JP is so disciplined in that he reviews our stock portfolios – mine and his – almost every day and then he emails me (so I don’t misplace it) his watch list of stocks to pay attention to. I have missed many opportunities. Maybe I should just post his lists for my readers?

I am trying to be more organized and watchful of my stocks. I’m working on being more proactive with my investment ideas, and thanks to weekly blogging, I’m getting a bit better at it. It’s only February so I won’t beat myself up over how far I have yet to go. 

There is rarely a completely straight and easy path to any goal, but my conversation with my partner in life and business reminded me that it’s time to get back on track and to contribute more to our joint efforts. Our future beach bum selves are counting on it.