Stocks are Risky but so is Life

I learned a valuable lesson about stocks just recently when Colorado and Washington legalized marijuana. I had two stocks MJNA (15,000 shares) and GRNH (10,000 shares) I nearly tripled my money turning $1200 to $3400 on the election results in November. I sold MJNA, took a nice profit and kept GRNH. MJNA dropped and I re bought 10,000 shares @ 11 cents each. As MJNA ascended towards 20 cents I thought I should set an order to sell at 14 cents with the price at 15 cents. A dip below 14 cents sold me out then the thing went to 50 cents! Meanwhile my $600 was still riding in GRNH which I had bought in several different purchases at an average cost of  4 cents per share. GRNH went to 20 cents making $600 into $2400. As I danced around the room patting myself on the back I returned to the screen and looked at the $2400 on the screen and told myself, "you should sell and take that profit." The next day my wife and I decided to hold 5 marijuana stocks and wait till the big announcement that was sure to come from Washington, D.C. that marijuana prohibition has been lifted nationwide. It did not happen and bad news came out about marijuana nearly every day for the next 3 months. I stopped the bleeding after a 40% loss and I took the money out of all five marijuana stocks and began assembling a portfolio of more stable stocks with actual earnings. 

Since I have been trading online I have heard the phrase, 'pigs get fed, hogs get slaughtered.' I got slaughtered by, first being to greedy and not thinking a 400% gain was good enough, and second by turning a news-hyped trade into a buy and hold investment. I also broke the diversification rule by buying 5 companies in the same industry. I will not repeat these errors. 

Here is my new portfolio

1. 50 shares of  KR (Kroger) a stalwart in the grocery business

2. 300 shares of RVLT (Revolution Lighting) an led lighting company

3. 125 shares of HBAN (Huntington bank)

4. 100 shares of ATRS (Antares Pharma) makers of self injectible meds

5. 100 shares of STKL (Sun Opta) an organic foods producer

6. 100 shares of MVIS (Microvision) a tech company

I chose these stocks based on research, as I did with the Marijuana stocks, but the marijuana stocks were a trading opportunity that I botched, not an investment. These companies are established businesses with real earnings. As of 3pm on 6/11/13 the value of my portfolio is $5382.73 the amount invested is $5419.02. I will be updating these numbers periodically.

Now get out there with $500 and learn about investing on the fly. Wages are not rising and the Fed stimulus money is only reaching the stock market and not main street. You have to learn to play with the big boys and you might take a few lumps but I still believe that there is no other place on earth where a little research can literally change your economic fortunes. I recommend that you read One Up On Wall Street: How To Use What You Already Know To Make Money In The Market, by Peter Lynch BEFORE you invest anything. Don't wait til 4 years into investing to read it like I did...Big mistake! I am not endorsing these stocks nor am I soliciting anyone to buy any securities as I am not a certified financial planner nor do I hold any licenses or permits to sell or recommend stocks or other financial instruments.