Stock Markets Exposed

Active stock traders: Do you trade stocks that are in your long term portfolio?

It seems that the stocks in your long term portfolios would be the ones that you have the most confidence in their fundamentals and so on, but also increases your vulnerability and mindset. For example, if I spot a short term death sentence in stock trends for a stock I still have confidence in long term, I could be shorting a stock that I also own! On the other hand, if I follow my instincts, I will constantly buy and sell those stocks in my long term portfolio, and end up turning it into a second trading portfolio, which isn't good for anyone. What is your system here?

Public Comments

1. maximize profits by taking advantage of some short term changes but focus most of efforts on researching long term purchases. It is important to know your short term companies well too or just don't bother with the shorts... stick with companies and industries you know the best in any case.
2. Active traders do not hold "long term portfolios" due to inherent risks associated with long term single stock holdings. (see source) I strongly advice that you learn how the markets actually work before risking your own money. Good luck
3. I consider myself a position trader, long term to me is 6 months. I seek out stocks/options where I can make a profit in a short period of time and then move on. To me a long term investment is a trade that went bad. However, I'll hold it as long as it remains higher than I paid. All traders try to keep moving, that doesnot mean that they wont go back into a stock at a higher price as long as it will continue to move higher.
4. You have to look at each stock individually. You can't just label a stock part of the "long-term portfolio" and then forget it. If the conditions change surrounding a company such that its risk-reward profile is no longer favorable, then you should sell. Generally, if it looks like a stock price will be flat or down for the next six months, then it makes sense to sell it and invest your $$ somewhere where it will make you money. You can also use options to manage your risk on the stocks you own, for example, by buying a put or selling a call.
5. no I don't
6. I consider myself a trader. I also have a long term account. "Long term" can be a mindset instead of a position. I really like IBM. If I think it is going south, I will sell and take a profit fully expecting to buy it back at a lower price. I will buy it back as long as I have faith in the company. I think one of the biggest investing mistakes is becoming married to a stock. Watch it go up and watch it go down. Unless it pays a huge dividend you are losing money. The whole basis of the market is buy low and sell high. If you have a great company you can do with a couple of times a year or even once every 2 years, you will be better selling and buying again. When I trade, I really could care less about the company. I am only trading a trend. I have on occasion owned a stock for a period of minutes that I had no idea what they did. I just identifed a trend and went with it.