I use days like today to check all my stocks (not that many really - no need to have a zillion -- just good ones!) and anything where my 5% rule is lagging -- I look to add to those positions not sell... I look to buy when the others are selling.

Schwab has a tab in the Positions page - where you can check your "unrealized gains/losses" --- This is the page I go to on days like today. I look at the red numbers first - because these are stocks I've done all the research on - and I only bought them because I want to own them - perhaps they're red/down at the moment - but I certainly don't expect them to stay that way over time.... and I pick away (add to the position) on days like today. That usually (short term) adds to my loss... but I don't care about that --- I'm SCALING IN. I never buy an entire position at once. Some of you can't scale in -- so this is info for when you do get to that place... So this post is just about how I personally use a down market day.

Today I added 5000 shares to my Banco Santander (STD) holdings. I have now made 4 separate 5000 share purchases... and I have a "loss" (paper only) in the name. They pay a very handsome dividend and I expect this world bank to be just fine 3 or 5 years from now. In the meantime - they're paying me to sit on my hands. :unibrow: The name is still a low holding in my Schwab account... and I don't expect to get to 5% in this name because of the share price -- I'd simply have to own too many shares to get to what constitutes 5% of my investable assets. So there's another INVESTING 102 lesson. You don't have to have any particular number in any particular name. The 5% "rule" is about THE MAXIMUM - but it doesn't mean you ever have to get there.

So here's another thing to pay attention to and I've written about this before -- it's what I call the "LAW OF LARGE NUMBERS". This is true regardless of how much you're investing!

10 shares down $1 ='s 10 dollars

100 shares down .35 ='s 35 dollars

Doesn't make any difference that the 10 shares are @ $500 each and the 100 shares are only $5

So as you can see -- the one stock that you have the most shares of can really "counter" your other stocks. The more shares you own - the more affect they can have on your performance -- and this is true whether they're going UP or DOWN!

I try to be cognizant of this when looking at my accounts. Sometimes you're surprised at the gain or loss of a particular holding -- and then you have to look at the number of shares you're holding rather than the actual dollars invested. And that's when you'll see this "law of large numbers" take affect.

Today's market is hardly "scary" and you shouldn't be scared by a market that is down 1 or 2%... I'm always HAPPY for days like this because it allows me to add to my positions. It's like going to Nordstrom and finding a pair of shoes you've been wanting to replace - on sale! :woot:

I was going to say for people waiting to buy certain items, they are having a sale today..

Greg you are right ,, today is not scary but just another day.

And for people sitting in cash.....Time is not on your side...You gotta put the cash to work..

I jumped into the Utilities and Consumer Purchases/tobacco sectors today... thats why the down market. :cheers:

go take advantage of the "After Albert buys" Sale going on now! ;)

Too funny Albert! But it is an absolute truth that right after a guy buys the market goes down... thus my "scaling in".


Okay -- so I forgot a key part of my post about looking at your account and picking away at any of the names you've yet to "max out" on... and that key part was to not look at just the numbers as in --- a $10 stock is down .50....
Rather -- look at the PERCENTAGE move. So Banco Santander (STD) is down today - and I took some more because it was down 5%... This is a $7 ish dollar stock -- so it's down a whopping .45 CENTS - but that .45 cents is 5%

I have other stocks that are down in dollar terms far more... Phillip Morse (PM) is down $1.22 as I write - but that's only down 1.43% so I'm not taking down any more PM for a picayunish 1.5% move... But STD down 5% if it just comes back to YESTERDAYS closing price I'd have a 5% gain.

I'm not looking for 100% gains -- or 50% gains... tomorrow... or by the end of the month. I'd like (LOVE?) to have a 10% gain by years end... but if I have a TOTAL RETURN of 10%+ by years end I'd be thrilled.

So watch for PERCENTAGES... because that's how you make money!

It's comforting to know it's not just me. Stay the course, the tide will come back in. :thumbsup:

You guys are too funny.. The after Albert sale....Dang you are smart and funny..:thumbsup: :lateral:

Yes, I am looking at the long term, so the in and out flow does not matter..

Stocks never rise in linear fashion, and I am just looking to the yearly or long term average too...

Double digits would be nice...Ya, 10% to 12% would be a win in my book for a yearly average gain.

So... Now i am covered in these sectors within my ROTH:

Retail/Wholesale (MCD) 19%
Comp&Tech (MSFT, CSCO, APPL) 16% (before "Investing 102" purchase)
Utilities (ED) 26%
Consumer Staples (MO) 26%
Aerospace (LMT) 5% (before "Investing 102" purchase)
Medical (PFE) 5% (before "Investing 102" purchase)

What sectors would be a good offset for these? My next two considerations for next weeks purchase ($2k) would be possibly be in Finance, and Oil/Energy. Just trying to gauge where to invest my "time" to research. ;)

I'm looking at my Rollover IRA (Fidelity) and when you say to look at the unrealized losses/gains, would that be the same as ''changes since purchase, dollars/percent". Navigating Fidelity's page is somewhat troublesome so I'm hoping their terminology is just different and I'm not looking at it incorrectly.

Im guessing so. My Sharebuilder (where i have my ROTH IRA) has a "Gains or Loss" column. and the footer notes show thats the gain/loss ($ and %) since "purchase".

Looking at my IRA I've noticed Pepsi is -7.72%, Consolidated Edison is -6.93% & Disney is -2.34% since purchase. Is -5% just your benchmark for scaling in or is that one of those unwritten suggestions for investors?