Sometimes You’re The Dumb Money

The market is up this morning.

And many of the stocks I own are up but have been down over the last few days.

I have learned from the past and I was reminded today that stocks often open up and close red in weaker markets; in stronger markets, stocks open down and close green. (BTW, @Ivanhoff is a great follow on Stocktwits)

Things have been going up for so long you can often forget these little gems of knowledge you’ve been aware of in the past. This is one of those things I often forget. And when I forget the fundamentals, emotion takes hold and I start to chase things. This can be a dumb money move. Basically, trading at the worst possible times.

The “dumb money”, I have heard, often trades the first few hours of the day. The “smart money” is trading into the close. I don’t know how true this is, but I will say, if I’d waited till the last hour of the day on some trades, I may have gotten a better price.

Honestly, if you’re investing for the long term, whether you got in at $1 or $1.59 doesn’t really matter if you think the company will perform over the long haul.

The majority of money is being traded by an algorithm anyway. And, we all have the same information. I don’t have an edge except to pay attention and learn. I always assume I don’t have an edge. How could I?

My intent is to ride the coat tales of people who do know. See what they’re saying, do my own due diligence, use my own mind to judge and find the best investments that work for me and my budget.

We’ll see how the markets react today and make a note as the days tick by.

Yesterday I bought 5 shares of $FB Facebook at $168.97 and I bought 25 shares of $MTCH at $35.49. I also added to my $SPOT position with a 5 share purchase at $176.22. I now own 10 total shares.

We’ll see if this was dumb or smart money over time. They are all long-term holds for me.

Full Disclosure: I am not a financial professional of any kind. I am a tin knocker by trade and an investor by passion. Please DO NOT take what I say as investment advice. Follow my investments at your peril. Thanks for reading.

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