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10:13 AM
CJ
Every time I purchase a stock, I make myself write down why I thought it would be a good idea to make the purchase.
* Disclaimer: This article is in no way a solicitation to buy, sell, or trade for the stock. It is just my analysis of my thought process when I purchased the stock. *
Stock Name: Nokia
Stock Ticker: NOK
Purchase Date: (Initial) April 9, 2012
Purchase Amount: 16 shares @ $5.10
Additional Purchases:
April 10, 2012 - 58 shares @ $5.08
May 16, 2012 - 26 shares @ $2.82
April 5, 2013 - 25 shares @ $3.35
Mindset during initial purchase:
When I was first researching and buying stocks, I was a fucking moron. I did everything wrong. I traded with extreme fear and wasn't patient at all. I did the stupid first time stock buyer thing; purchase penny stocks with dreams of getting rich quick. Nokia is the shining example of my first time stock purchasing blunders.
Looking back at my first initial order, I saw three cancelled orders. Apparently, I was attempting to buy the stock during a price upswing. I kept missing out on all the price targets, so I kept canceling orders trying to chase the stock. Eventually I landed at $5.10 a share, and then the Nokia stock "bottom fell out".
The stock would eventually drop to sub $2 towards the end of 2012. I couldn't believe how much money I "lost" on the stock. As you can see, throughout the year I tried to hedge my losses by purchasing more Nokia stock at lower prices in attempts to make up ground.
That's a stupid way to invest. It's a form of gambling that I need to learn how to control.
I also needed to learn, I technically didn't lose any money, because I hadn't sold the stock yet.
Reasons Why I Purchased Stock:
Nokia is a famous phone company and the mobile industry was booming. Nokia held the largest world wide share of phone users and the stock was dirt cheap!
CNN Money forecasted that Nokia's stock would jump to around $10 (at the time I purchased it). I thought I would be doubling my money. (CNN Money currently forecasts the stock to go as high as $7).
Nokia pays a dividend. I like stocks that pay dividends; it's free money.
Lessons Learned from Purchasing This Stock
Just because a stock's price drops, doesn't mean that you lost money. You can only lose money if you sell the stock. I also learned that the opposite also doesn't apply. If you have a stock that's worth more now than when you bought it, it only means you made money once you sell the stock.
Dividends can hurt a stock price. Usually, after a company pays out a dividend, the price drops the same amount of the dividend payout.
Be patient. There's no harm in waiting out a stock price. It was silly of me to keep canceling orders and chasing the stock price. It only cost me money in the long run. If I waited even one week to purchase this stock, I could have owned twice as many shares at only half the price. I know I don't have a crystal ball and couldn't see that coming, but it taught me to take a deep breath before I press the order trigger button.
* Disclaimer: This article is in no way a solicitation to buy, sell, or trade for the stock. It is just my analysis of my thought process when I purchased the stock. *
Stock Name: Nokia
Stock Ticker: NOK
Purchase Date: (Initial) April 9, 2012
Purchase Amount: 16 shares @ $5.10
Additional Purchases:
April 10, 2012 - 58 shares @ $5.08
May 16, 2012 - 26 shares @ $2.82
April 5, 2013 - 25 shares @ $3.35
Mindset during initial purchase:
When I was first researching and buying stocks, I was a fucking moron. I did everything wrong. I traded with extreme fear and wasn't patient at all. I did the stupid first time stock buyer thing; purchase penny stocks with dreams of getting rich quick. Nokia is the shining example of my first time stock purchasing blunders.
Looking back at my first initial order, I saw three cancelled orders. Apparently, I was attempting to buy the stock during a price upswing. I kept missing out on all the price targets, so I kept canceling orders trying to chase the stock. Eventually I landed at $5.10 a share, and then the Nokia stock "bottom fell out".
The stock would eventually drop to sub $2 towards the end of 2012. I couldn't believe how much money I "lost" on the stock. As you can see, throughout the year I tried to hedge my losses by purchasing more Nokia stock at lower prices in attempts to make up ground.
That's a stupid way to invest. It's a form of gambling that I need to learn how to control.
I also needed to learn, I technically didn't lose any money, because I hadn't sold the stock yet.
Reasons Why I Purchased Stock:
Nokia is a famous phone company and the mobile industry was booming. Nokia held the largest world wide share of phone users and the stock was dirt cheap!
CNN Money forecasted that Nokia's stock would jump to around $10 (at the time I purchased it). I thought I would be doubling my money. (CNN Money currently forecasts the stock to go as high as $7).
Nokia pays a dividend. I like stocks that pay dividends; it's free money.
Lessons Learned from Purchasing This Stock
Just because a stock's price drops, doesn't mean that you lost money. You can only lose money if you sell the stock. I also learned that the opposite also doesn't apply. If you have a stock that's worth more now than when you bought it, it only means you made money once you sell the stock.
Dividends can hurt a stock price. Usually, after a company pays out a dividend, the price drops the same amount of the dividend payout.
Be patient. There's no harm in waiting out a stock price. It was silly of me to keep canceling orders and chasing the stock price. It only cost me money in the long run. If I waited even one week to purchase this stock, I could have owned twice as many shares at only half the price. I know I don't have a crystal ball and couldn't see that coming, but it taught me to take a deep breath before I press the order trigger button.
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