Sometimes selling is winning

*note: I am not an investment professional, my opinions are absolutely worthless, always do your own homework before buying a stock, your mileage may vary, etc, etc..*

I invest in the stock market. I have a modest portfolio, some funds I rolled over from an old 401(K) - actually my Thrift Savings Plan from the Navy, but it works just like a 401(K). I actively manage a portfolio of about eight to ten stocks, buying and selling as needed. My current focus is on domestic retail, financial, consumer staples, and technology stocks. I had a good position in drug stocks, but I sold them in anticipation of next week’s election.

So far, I’ve done pretty well, netting about a 7% gain for the month, soundly beating my current 401(K), which is invested in mutual funds. I got a bit to greedy, and last Friday gave some of it back. Come Monday, I ‘panicked’, and went all to cash (sold all of my shares). I did book some profits from my stocks that were doing well, but much less than if I sold the Thursday prior.

Yesterday, I expected the market to rebound from the past two day’s bloodletting, and bought up some shares. Wrong move, Tuesday was a down day as well. Today looked bad in the morning, and once again I went back to all cash, and spent the day watching those stocks tank. My frantic buying and selling has racked up a bunch of commissions from my online stockbroker. If I had planned this better, I’d be in much better shape right now. As of 3:48PM today, the stocks I track have been hammered, I got out this morning just before the real damage was to be done. I got lucky.

My original plan was to go to cash on Monday, and keep my powder dry until next Wednesday, after the election, and then come out guns blazing. I fully expect the Democrats to take the house, and perhaps the senate; the market will not be happy. But, I got antsy with such a large cash position, and bought back in anyway. Dumb move.

Right now I hold shares of Altera (MO), Level 3 (LVLT) and Companhia Vale do Rio Doce (RIO), a mining stock in Brazil. Mercifully, those three held up today, with RIO going up a couple percent. I held MO on anticipation of good news from their appeal of a huge lawsuit, that stock will tick up on any good news from that front. LVLT is speculative, I have a small holding, and I’m comfortable letting it run its course.

So, my game plan is this: stay in cash until after the election, buy up my favored stocks at what will hopefully be a large discount. Hopefully..