We often have clients who ask us what we think about the stock market and what i trade. I’d like to share that information with all of you and give my opinion on the market and what i do at a time of high volatility. I am not a certified financial advisor so these are not recommendations, but just a look into what i am currently holding and what I’ve traded.
We’re currently in the middle of a trade war and we just had an announcement that Canada will impose retaliatory tariffs on U.S. Steel. This will definitely impact the markets and with the global political climate we’re heading towards some headwinds. Just recently i met with some financial advisors in a race car friendly environment “pictures coming soon” and i had a chance to pick the brains of some of the money managers and stock analysts. They all reassured me of what all the talking heads are squawking about. THEYRE ALL HOLDING OVER 50% CASH. I’ve even heard of one fund that is holding 70% cash. This is somewhat concerning for some of my investments because i do believe that we should have our money diversified, but my opinion is that in this market it’s best to have investments in company stock vs. index funds of mutual funds.
I started making the transition into stock picking vs. parking my money two years ago because i wasn’t happy with the performance of my portfolio. Ever since i made the switch I’ve seen my returns go up by an incredible margin. I believe in investing in what you know and researching two crucial things. I always read the quarterly reports and i follow the RSI “relative strength index” The reason why i do this is to make sure that i am purchasing a stock that’s trading at a price and multiple that i am comfortable with. Now this doesn’t always work, but i thought it would be nice to share this information with you. I also wanted to let you know that it’s a good time to take some of the profits and reinvest them or even take advantage of tax loss harvesting if you have any to utilize and reduce your capital gains.
Last year i was heavily investing and have been holding ATVI The reasoning behind this pick was that a new Esports arena in Burbank and the announcement of new teams that were backed by professional team owners and well renowned organized sports organizations were all jumping on the band wagon. Since I’ve been purchasing the stock has gone from the mid 30’s and is now trading at over 70 dollars a share. This was a 1 year change. I still believe that it has room to grow, but i am following the RSI. In this market we’re seeing lot’s of profit taking and with computerized trading some of the volatility is instantaneous and automatic.
BAC Bank of America i am holding long term options at a 40 strike expiring June, 2019 The reason why i trade options in this case is that i wanted the option to purchase a large quantity of shares. I believe that we’re still heading towards more deregulation and with rising interest rates it should benefit the banking sector. They also just announced a dividen increase of 15% yesterday. When i look back at the banks history i am gauging where the dividend will be and with their revenues increasing I believe that this might actually be a some what “safe” investment in my eyes. From where the payouts were since the Great Recession i believe that the only way is up for this pick. Since I’ve been purchasing it has ran up, but i still like this for a long term hold.
Dis Disney This was my biggest loser this year because i started purchasing the stock at 109.00 and it was at lows of 98 a few weeks after i made my investment. It’s now bouncing back since they’re pursuing the acquisition of Fox. The DOJ approved the ATT Time warner merger just a few weeks ago and since the dead cat bounced. I am currently still holding and buying whenever i see that the RSI is low which means that it’s over sold. I am going to hold only if they can acquire FOX if not i am going to put my money elsewhere. My reasoning is that they have a great portfolio of content. This stock could really take off if they can make move on setting up there streaming applications, but that might take a little longer then expected especially if they cannot acquire FOX.