Tips From 50 Years of Trading
Dolores M. Johnson
Dolores is a long-term growth investor who regularly beats the S&P 500 and has been trading since 1967. She focuses on what she deems growth-stocks, dividend stocks, and a milder but immensely rewarding long-term strategy. She’s been through dozens of corrections and crashes to date, and her wisdom has followed. Dolores along with her son, Jason; both believe a mild correction will be seen in the coming year.
Beginnings of a 50 year old investor:
“My interest in investing in the stock market arose when my brother joined EF Hutton Stock Brokerage in the sixties, and who remained with the organization throughout the mergers and acquisitions (Shearson-Lehman and Smith Barney, and till he retired 24 years’ later in 1991).
My brother provided me with magazine subscriptions, market charts, business and economic data and recommended that I read books by famous market participants and suggested reading the Wall Street Journal regularly, This led to my expanding knowledge throughout my fifty-years of investment in mostly stocks of the 30 Dow, the NASDAQ, and Index funds.”
“To be a member of the Dow 30, each stock meets the complex criteria of that category, and the following are stocks in which I have invested, based on dividend payout, strength of the balance sheet and its historical importance in the U.S. economy: Apple, American Express, Caterpillar, Cisco Systems, Chevron, Coca-Cola, DuPont, ExxonMobil, General Electric, Home Depot, IBM, Intel, Johnson & Johnson, JPMorgan Chase, McDonald’s, Merck, Microsoft, Pfizer, Verizon, and Wal-Mart.”
Since the Internet, we’ve been exposed to the most excellent source of stock market information; which can be supplemented by speaking to a stockbroker or friend who has invested successfully in the past. Then, you will explore which brokerage meets your needs. (Keep in mind that many in the industry may approach you to handle your account, (particularly if you are older or handle a large account), but with the knowledge and experience you have learned earlier, you will want to control your activities and not allow the churning of your portfolio, which can result in the vanishing of your funds/stocks.
Daily, there are mixed reports on what is occurring in the market activity. Do not be misled into believing that any of that “noise” is significant. Otherwise you may be selling, when you would otherwise be purchasing. Follow your instincts that have been learned from your personal experience. The more you learn from your studying the market, the greater will be your profits.
The old adage is that the retail investor cannot profit in the market, and to a certain extent that is true, as hedge funds and others receive information from different entities that precedes yours. While the Securities & Exchange Division has addressed this issue–it has not vigorously enforced the law. However, with a long-term perspective you can overcome short term volatility and achieve a price closer to your stock’s time weighted average price at sale.
Historical Crashes – and why:
There were three catastrophic periods that caused massive losses in the market: October 19, 1987 when the market declined by 508 points in one day, the technology industry was overvalued from approximately 1995 to 2001 due to speculation, and The Great Recession began 2007 –the housing debacle which is described in detail below.
The housing crash caused concern throughout the world as the potential for banking and financial markets to collapse. The Federal Reserve authorized the printing of money to distribute to the banking and insurance industries, and it incurred a balance sheet at the Federal Reserve of $4.5 trillion in debt during this process. Banks were also given 4% interest on reserves. Although the banks were responsible for this chaos, they enhanced the value of their institutions by three times prior to the crisis. Investment banks in America sold their “toxic assets” to foreign countries at tax payer expense.
It was revealed that loans made to homebuyers around 2001 to the beginning of the loan crisis were deficient, many had no income or jobs and loan applications reflected the negligence of banking and lending institutions to ascertain the validity of the loans, and these properties were bundled for sale to the world.
Listed below are the six stocks I intend to sell before the oncoming correction occurs either in 2017 or early 2018. When the market once again indicates positive movements, it will be an opportunity to purchase growth stocks.
- ExxonMobil – 350 shares – $81.63 per share – oil throughout portfolio plus coal
- PTY (Pimco) – 700 shares – $15.49 per share – $91.oo monthly payout
- Goog – 25 shares – $847.84 per share – growth purchase
- RDS.A – 200 shares – $52/26 per share – commodity holding
- AAPL – 10 shares – $141.09 per share – growth stock
- NFLX – 10 shares – $ 145.99 per share – growth stock
For those entering the market, may your investments bring extraordinary profits.