Thursday, August 25, 2005

A line in the sand

I stink at investing. I'm generally a day late and a dollar short. My 401k has flexible options for allocating funds, depending on how conservative or risky one is. For years I kept my money in the stable fund, being the super conservative person that I am. Along came the dot com boom and my coworkers were revelling in the super growth they'd achieved. I plodded along with my low growth stable fund. Finally, I decided that I should join the masses who were headed towards early retirement with their fast and furious gains. I reallocated my funds. Wouldn't you know, the dot com balloon went poof. My timing was impeccable. Buy low, sell high. It sounds so simple, but for some reason, I am consistently out of phase. By the time I make a move, it invariably turns out that I've bought high or sold low. So, the thing to do is diversify. I tried that. Somehow, I still manage to lose. Well, maybe I've gained a little, but looking back over time, I would have done much better to have stayed in my safe stable fund all along, and not listen to anyone's advice. However, I have recently decided to try being a little more active in my allocations. To keep track of daily trends and make decisions and changes more fluidly than once every two or three years. Having made that decision, two days ago, it would appear that the stars were not aligned for me. The stock price dropped, so it was a good time to buy. I tried to buy, but made my order after the closing time, which means I would get the next day's price, not that day's price. Drat, so there's a time limit involved. That's why you see scenes from the stock exchange on TV with utter chaos and people yelling, waving their arms, bits of paper fluttering through the air. Okay, I get it. I cancelled my order (nice option available with my plan) and waited to see what the next day would bring. The next day, the price dropped even more. I should have kept my order and not cancelled it. I tried to place the order again and got a proxy error, whatever in the heck that is. I guess my session timed out or something. Hmmm. So, I missed the boat again. Today was the third day of looking at stock prices. Today the price went up a bit. Not much, but a bit. It was still down a bit at 4 minutes to closing, so I decided to place my order. Confirmed. Great, at closing the price ended up being up. So I say to myself not to worry. It's just a line in the sand. Forget about the gains or losses prior to today. Just make sure that the next time you sell, the price is higher than it is today. Don't worry about what the price is today. It's just your reference point. Chill. I am definitely not cut out for this. (But if my coworkers retire as multi-millionaires while I have to work until I'm 90, I'm going to be very angry with myself for not being able to grasp the simplicity of 'BUY LOW, SELL HIGH'.)

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