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Are the millennials wrong in investing in Tech stocks ?
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It depends.
I choose the beginning of this year, 2020 as an example to illustrate my point.
If a millennial invest in Amazon stock from 02 Jan 2020 and hold till now (01 May 2020), he would have made roughly 32% profits. That is just over 5 months, impressive huh ? Consider when SPX500 yearly gain ekes a 8% return only.
In the game of trading/investing, there are the 4 Ws and 1 H involved :
What to invest ? Tech stock in this case
When to invest ? that is the million dollar question
Why invest in Amazon ? hmmm, if i am a millennial myself, then it is highly likely that I would be investing in this as well. After all, I grow up with FB, Amazon, Apple, etc in my life and so are my circle of friends.
Where ? Here, refers more to geographical location like Asia, US , Europe,etc.
How ? Here, we can talk till the cows come home about the DIY method (what I do) and outsourcing to platforms like Robinhood app,etc.
By looking at the chart, you can see that if they invest in say , 14 Apr 2020, then the risk is much higher as the price has gone up quite a lot and is now consolidating. The possibility of a correction to the two levels (red arrows) are higher.
In a way, you can say looking at chart is a way of timing the market for buy/sell entry. It becomes important at which stage you have entered as it determines your profit or loss.
Go in with your eyes open. Do you research on the company you want to invest in, never mind if they are popular or not. The objective of investing is to make money , be financially free. However, if your other goal of investing is for personal reason, then it is not within the context of what we are discussing here.
If you don't know which company to pick, then a low cost index like SPX500 is a good choice. Study the charts, read the news for updates, etc. It is not the lack of resources that is the obstacle but the excessive amount of it that I think is scary. So scary that it causes confusion, analysis paralysis and even inaction on the part of the trader.
For me, chart reading is part and parcel of my trading/investment strategy. Reading the fundamentals of the company is crucial too though I do not delve too deep into the financial aspects. News are necessary as it help to sharpen your mind. Trading is like a battle game to me, the enemies (media) will constantly throw smoke screen at you , to divert attention ,to create chaos and also to launch into offensive attack at you sometimes.
What you read become important as it influences your buying pattern. Think how the influencers with millions of followers operate. Yes, they influence their buying decisions.
Again, nothing wrong to outsource to a 3rd party to do the investment selection for you if you are comfortable with it. For me, selecting the companies to invest in and doing the necessary homework is not a chore but a learning process. One that I pick up over the years, packed with lots of mistakes and losses.
So, know where is your starting point (entry) and when it starts to U turn, you know what are the possible consequences. Of course, nobody knows for sure if this is a bear market rally or a V shape recovery. Everyone is betting based on their knowledge, experience ,etc.
I choose the beginning of this year, 2020 as an example to illustrate my point.
If a millennial invest in Amazon stock from 02 Jan 2020 and hold till now (01 May 2020), he would have made roughly 32% profits. That is just over 5 months, impressive huh ? Consider when SPX500 yearly gain ekes a 8% return only.
In the game of trading/investing, there are the 4 Ws and 1 H involved :
What to invest ? Tech stock in this case
When to invest ? that is the million dollar question
Why invest in Amazon ? hmmm, if i am a millennial myself, then it is highly likely that I would be investing in this as well. After all, I grow up with FB, Amazon, Apple, etc in my life and so are my circle of friends.
Where ? Here, refers more to geographical location like Asia, US , Europe,etc.
How ? Here, we can talk till the cows come home about the DIY method (what I do) and outsourcing to platforms like Robinhood app,etc.
By looking at the chart, you can see that if they invest in say , 14 Apr 2020, then the risk is much higher as the price has gone up quite a lot and is now consolidating. The possibility of a correction to the two levels (red arrows) are higher.
In a way, you can say looking at chart is a way of timing the market for buy/sell entry. It becomes important at which stage you have entered as it determines your profit or loss.
Go in with your eyes open. Do you research on the company you want to invest in, never mind if they are popular or not. The objective of investing is to make money , be financially free. However, if your other goal of investing is for personal reason, then it is not within the context of what we are discussing here.
If you don't know which company to pick, then a low cost index like SPX500 is a good choice. Study the charts, read the news for updates, etc. It is not the lack of resources that is the obstacle but the excessive amount of it that I think is scary. So scary that it causes confusion, analysis paralysis and even inaction on the part of the trader.
For me, chart reading is part and parcel of my trading/investment strategy. Reading the fundamentals of the company is crucial too though I do not delve too deep into the financial aspects. News are necessary as it help to sharpen your mind. Trading is like a battle game to me, the enemies (media) will constantly throw smoke screen at you , to divert attention ,to create chaos and also to launch into offensive attack at you sometimes.
What you read become important as it influences your buying pattern. Think how the influencers with millions of followers operate. Yes, they influence their buying decisions.
Again, nothing wrong to outsource to a 3rd party to do the investment selection for you if you are comfortable with it. For me, selecting the companies to invest in and doing the necessary homework is not a chore but a learning process. One that I pick up over the years, packed with lots of mistakes and losses.
So, know where is your starting point (entry) and when it starts to U turn, you know what are the possible consequences. Of course, nobody knows for sure if this is a bear market rally or a V shape recovery. Everyone is betting based on their knowledge, experience ,etc.
Not
praise lord, it is moving nicely upwardsNot
Praise the LordNot
Facing resistance at 3233 level. It has to break this level before it can goes higher. Took some profits and adjust SL.
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