The Paper Trade Part 5 (That GNC loss tho...)

Had to get out of GNC because news just broke that they put illegal- synthetic drugs into some of their products and therefore I took about a 19% loss. The main essence of GNC is ingredients and people trusting GNC for their body. I was skeptical about the stock as it did not follow my investment strategy upon a second check, but I remember an early on pop in the price and analysis all-over marked it as a buy till this day. I was thinking when I wrote part 4 of the paper trade earlier today about the cause of stock declining....and I could not find anything on the internet to indicate any issues. It would have been my best bet to cut my losses much earlier as I was not confident in my stock selection, but I let outside influence albeit professional analysis break me. 

However, I invested in a diverse portfolio to mitigate my GNC loss to keep me in-line with the s&p500 and total index so I am okay. I will bounce back with my next selection(s) to outpace the s&p500 and total index. I must stick to my script and I can live with such set-backs if it is 100% in-line with my strategy. 

The Paper Trade series has been a show-and-tell so it includes the good, bad, and bouncing back. This GNC loss was a reminder and another learning experience to not be swayed by anyone else when doubts arise. 

The Paper Trade Part 4

I decided to take profits from Cisco as it reached 16% and I am still holding onto a position. 

The Paper Trade Part 3

                                     

                                  

Added the second half of the money to the S&P500 and Total Market indices as my comparison for success. 

                                     

                                     

Took profits on Starbucks as it was inevitably a trade because the price rose to quickly for me to get the 2nd half of the money into the stock. I am still hanging onto Starbucks as I did not close my position.

Paying the bank to keep ya money and I ain't talkin' fees! (negative interest rates)

The title explains it all. Instead of earning interest on your money you lose a set percentage of your money annually even if you met minimum deposit requirements in a negative interest rate environment. You are paying the bank to protect your money as your money would be better off under the mattress. However, the benefit is lower interest rates for your car purchases, home purchases, and other large purchases. And for a more academic definition allow me to quote Investopedia:



"A negative interest rate policy (NIRP) is an unconventional monetary policy tool whereby nominal target interest rates are set with a negative value, below the theoretical lower bound of zero percent.

BREAKING DOWN 'Negative Interest Rate Policy (NIRP)'
During deflationary periods, people and businesses hoard money instead of spending and investing. The result is a collapse in aggregate demand which leads to prices falling even farther, a slowdown or halt in real production and output, and an increase in unemployment. A loose or expansionary monetary policy is usually employed to deal with such economic stagnation. However, if deflationary forces are strong enough, simply cutting the central bank's interest rate to zero may not be sufficient to stimulate borrowing and lending.

A negative interest rate means the central bank and perhaps private banks will charge negative interest: instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank. This is intended to incentivize banks to lend money more freely and businesses and individuals to invest, lend, and spend money rather than pay a fee to keep it safe."

( http://www.investopedia.com/terms/n/negative-interest-rate-policy-nirp.asp#ixzz3odwxEnS4 )

The Paper Trade Part 2

                              

                             

                             

Cisco and Starbucks have become trades as I could not get the second part of the money into the stocks (CSCO and SBUX) as they continued to rise during the current/recent bear market. For individual stocks I will not buy 2-3% above my cost basis as a safety in case something goes wrong and I need to get out of a position. I will probably take profits from SBUX and CSCO in the near future as I do not maneuver in a way to simply avoid the tax man when a nice percentage gain is on the table.

                              

However, I did put the second half of the money into Apple, GNC, and JP Morgan as those stocks have not taken off enough to become a trade instead of an investment.

I will add to the VOO (s&p 500) and VTI (total market) tomorrow as dollar cost average and the nature of the diversification protects me when I buy above my cost basis in comparison to individual stocks. Those indexes are my benchmark for success as outpacing them validates my portfolio of individual stocks.