My Stock Investment Strategy

 

My Stock Investment Strategy

 

Let me preface by saying that this is not investment advice, but this is my plan for investing in stocks.  Follow this plan at your own risk.

 

After searching the internet I have not been able to find a stock investment strategy like the one I am using, so I am sharing it with the world since, so far, it has worked out pretty well.

 

I started by opening a traditional IRA with $426.  I didn’t even have any plans to open one, but I could get an additional credit on my tax return by opening one, so I did.  Then I forgot about it for 3 months.  I just didn’t even log in to the account.  Then when I had some time off, I thought maybe now is a good time to learn about stocks.  I had never bought or sold stocks before this, so I didn’t know what I was doing or how to go about it.  I was afraid I would mess the whole thing up and lose all my money.  I started by subscribing to the Wall Street Journal.  I thought it would be good to look at the stocks that hit 52-week lows and target them.  Lucky for me I wasn’t aiming very high.  I found a stock to target, AKUS, and then I targeted a 2% return.  I bought one day and sold the next.  Easy peasy.  I was still afraid I would lose my shirt on stocks, so I had even retargeted so that I only made 1.5%.  But I now knew how to buy and sell stocks.  Over the last 6 months, I have started with a plan, then broken away, failed, won, and now I am settling in on a new plan. 

 

My plan is simple:  Grow the $2700 I have already invested and not add any more.  Grow it 3.75% per week, and in 5 years I can make my first withdrawal of $1,000,000 and pay off all my debt.  Sure, I’ll pay 42% in tax on the million, but it will be worth it because I will still have more remaining in my account for retirement.  I also started a Roth IRA, so it will be tax free when I turn 59 ½.  That is my investment plan in a nutshell.  It involves having to pay the piper when I decide to take out the first withdrawal.  Until then, it will grow tax free, and I do not have to deal with it when filing taxes.  It’s not day trading, but a form of low growth swing trading. 

 

So how’s it working so far?  In these 6 months of learning to trade I have made 62% ROI, which is far better than I would have done in a mutual fund.  I am invested in Humanigen (HGEN) right now, which should take me over the 100% ROI very soon, since it is expecting a large increase in stock price for the EUA (Emergency Use Authorization) of it’s covid drug Lenzilumab.  Otherwise, my plan is to search for $3-5 stocks that are under-valued and near their all-time lows, and make my 4-5% growth in buying when they are down.  Then sell in the next few days when they are up.  I pick a stock based on the average range from the previous day's low to the next day's high and take into consideration the company news, and if it is near the tested low.  This I repeat once, maybe twice a week.  Since I have an IRA, I cannot buy and sell in the same day, but I can sell the very next day.  I just have to wait 2-3 days for the trade to clear before I can trade again.  Once I start dealing with larger money, I will either have to split it between stocks, or start investing in more expensive stocks.  That will be a good problem to have.  We’ll see how it goes.