الرئيسية
Don't Shy Away From Volatility, Earn From It
Richard Henry Suttmeier, Contributor
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U.S. stocks as represented by the Dow Industrial Average declined by
564 points during Thanksgiving week, the worst such performance since
1932. Last week the Dow rallied 787 points–one of the best weeks ever.
With a “buy and hold” investment strategy investors get scared away by
this extreme market volatility. The net change for those two weeks was a
gain 223 points – 1.9%.
I have been touting a “buy and trade” strategy where you buy on
weakness to a value level using ‘good until canceled’ (GTC) limit
orders, and sell strength to a risky level also using GTC limit orders.
This is how my ValuTrader model portfolio works to capture the extreme
volatility in a period of near record two-way volatility. Don’t shy away
from volatility, earn from it.
On weakness during Thanksgiving week the following stocks were added to the ValuTrader model portfolio;
Amazon.com (AMZN) was
added to the model portfolio on a GTC Limit Order to buy weakness to a
semiannual value level at $183.52, which was hit the day after
Thanksgiving. This stock is rated a BUY according to ValuEngine and at
last Friday’s close was up 6.8% with the Dow up 1.89% over the past two
weeks.
Baker Hughes (BHI) was
added to the model portfolio at $48.95 the day before Thanksgiving and
this BUY rated stock is up 9.5% at last Friday’s close. In my “buy and
trade” strategy BHI came out of the model portfolio on October 27 at
$61.11, making 9.1% on this prior strategy. A “buy and hold” investor
would not have had this investment opportunity.
Expeditors International (EXPD) was
added to the model portfolio the day before Thanksgiving and reached
its risky level on November 30 for a gain of 7.2% as a result of using a
GTC limit order to sell strength to my semiannual risky level at
$43.27. This was the third consecutive “buy and Trade” strategy within
the same trading range; an exit on September 14 gained 9.0% and an exit
on October 10 for a gain of 7.9%. The total gain of 24.1% was missed by
the “buy and hold” investor. This stock remains BUY rated and will thus
return to the model portfolio on weakness. This strategy will be
presented to ValuTrader subscribers.
L3 Communications (LLL) –
was added to the model portfolio on November 22 and this BUY rated
stock ended last week up 2.9%. The prior “buy and trade” strategy
occurred on October 12 with a gain of 5% from a higher price than last
Friday’s close, so this is another example of “buy and trade” beating
“buy and hold.”
Schlumberger (SLB) – was
added to the model portfolio on the day before Thanksgiving and ended
last week up 12.2% on this BUY rated name. The prior “buy and trade”
strategy for this stock was an exit on October 27 from a higher price
than today for a gain of 6.3%.
Richard Henry Suttmeier, Contributor
+ Comment now
U.S. stocks as represented by the Dow Industrial Average declined by
564 points during Thanksgiving week, the worst such performance since
1932. Last week the Dow rallied 787 points–one of the best weeks ever.
With a “buy and hold” investment strategy investors get scared away by
this extreme market volatility. The net change for those two weeks was a
gain 223 points – 1.9%.
I have been touting a “buy and trade” strategy where you buy on
weakness to a value level using ‘good until canceled’ (GTC) limit
orders, and sell strength to a risky level also using GTC limit orders.
This is how my ValuTrader model portfolio works to capture the extreme
volatility in a period of near record two-way volatility. Don’t shy away
from volatility, earn from it.
On weakness during Thanksgiving week the following stocks were added to the ValuTrader model portfolio;
Amazon.com (AMZN) was
added to the model portfolio on a GTC Limit Order to buy weakness to a
semiannual value level at $183.52, which was hit the day after
Thanksgiving. This stock is rated a BUY according to ValuEngine and at
last Friday’s close was up 6.8% with the Dow up 1.89% over the past two
weeks.
Baker Hughes (BHI) was
added to the model portfolio at $48.95 the day before Thanksgiving and
this BUY rated stock is up 9.5% at last Friday’s close. In my “buy and
trade” strategy BHI came out of the model portfolio on October 27 at
$61.11, making 9.1% on this prior strategy. A “buy and hold” investor
would not have had this investment opportunity.
Expeditors International (EXPD) was
added to the model portfolio the day before Thanksgiving and reached
its risky level on November 30 for a gain of 7.2% as a result of using a
GTC limit order to sell strength to my semiannual risky level at
$43.27. This was the third consecutive “buy and Trade” strategy within
the same trading range; an exit on September 14 gained 9.0% and an exit
on October 10 for a gain of 7.9%. The total gain of 24.1% was missed by
the “buy and hold” investor. This stock remains BUY rated and will thus
return to the model portfolio on weakness. This strategy will be
presented to ValuTrader subscribers.
L3 Communications (LLL) –
was added to the model portfolio on November 22 and this BUY rated
stock ended last week up 2.9%. The prior “buy and trade” strategy
occurred on October 12 with a gain of 5% from a higher price than last
Friday’s close, so this is another example of “buy and trade” beating
“buy and hold.”
Schlumberger (SLB) – was
added to the model portfolio on the day before Thanksgiving and ended
last week up 12.2% on this BUY rated name. The prior “buy and trade”
strategy for this stock was an exit on October 27 from a higher price
than today for a gain of 6.3%.