You may have noticed that your online broker offers a few order options when purchasing a stock or other security. I wrote in my review of the Robinhood app that many reviewers on the App Store blamed Robinhood for paying too much for a trade when the real problem was that they did not understand and properly utilize Robinhood’s limit order option.
If you simply post the default market order, your order will go through at whatever price your broker and another trader agree upon a few seconds or minutes later, which might not be the same market price you see on your screen. That could be frustrating if the price goes up in that short period of time, which is not unusual.
A limit order makes sure that your trade won’t go through any higher than a certain price. If the price of the security goes up between the click of the order button and when the trade actually happens, the broker won’t buy it for more than the customer wants to pay for it. It will wait for a cheaper trade to be available or the order to expire.
There are tons of order types being used in today’s technology-driven trading environment, most of which the average investor does not even know about. Commercial investment brokers like the popular online ones usually only offer a few order types, and it is probably for the best, as we are about to see how complicated they can be.
A novice might notice that his broker offers the option for a stop loss order and wonder what that means. He could hit the ‘help’ button or Google the term to see what it is, and at first glance it may look like an interesting idea. Let’s dig deeper into what it is and what the broader implications of it are before we use it to make a major financial decision. Continue reading “What Is a Stop Loss Order? Why Use It? And Why Not?”
The market is flooded with books about Warren Buffett. This is the 5th one that I have read. Some books assemble or quote Buffett’s writings; others reverse engineer Buffett’s investment strategy. Often these authors seem to be trying to convince you they have inside information or trying to indoctrinate you into the Buffett cult. University of Berkshire Hathaway is not one of those books. It has details you won’t find anywhere else, which makes it a relevant addition to the prolific repertoire of books about Buffett and Berkshire. Continue reading “Book Review: University of Berkshire Hathaway”
In my latest article for Seeking Alpha, I look at how two companies handled industry disruption between 2000-2010 and analyze whether GameStop (GME) meets the profile of a survivor. This was a fun article to research, as Blockbuster was a comically mismanaged company, and one of its competitors, Family Video, remains a model for resilience to both disruption and recession.
An app that let’s you quickly and easily trade stocks with no transaction fees? It sounds too good to be true. There has to be a catch, right?
This was my reaction when I heard about Robinhood, the app you can download for free and use to start trading stocks with no transaction fees. At the time, most of my retirement savings was in a 403(b) and a state pension. These accounts have limited options, mostly made up of index funds. I am not crazy about index fund investing for several reasons, which I will elaborate on at another time. I had finally opened a Roth IRA with an online broker to invest in individual stocks, but I was frustrated with the fee situation. I investigated Robinhood as an alternative, and here is what happened. Continue reading “Robinhood to the Rescue”
I have continued to update the Articles page in the Resources section of the blog. These articles are great for learning new investment strategies or exploring new sectors or asset types. Here are the latest additions:
In Long Run, There’s No Such Thing as an Einstein Investor
Robert J. Shiller, The New York Times, June 23, 2017
1 Value Investing Tip That Could Earn You Thousands
Timothy Green, The Motley Fool, June 25, 2017
Your portfolio probably doesn’t have enough bricks and mortar
Marcuss, ValueWalk, June 25, 2017
The Best Real Estate Investment for 2017
Matthew Frankel, The Motley Fool, June 25, 2017
The Ultimate Guide to Investing in MLPs
Nick McCullum, Sure Dividend, June 25, 2017
Quick Tips on Investing in the Pharmaceutical and Medical Device Industry
Maxwell Koobatian, GuruFocus, June 25, 2017
While I called solar energy “mostly a speculative venture” in my previous post while making the case for investing in LNG transport, I want to make the case for why solar still has a role in my portfolio. Continue reading “The Case for Investing in Solar Energy”
Let’s explore some potential investing strategies in 4 different stock sectors: technology, healthcare, energy, and real estate. We’ll start with tech, which had a huge drop today worth serious examination. Continue reading “Sector Study Session”