2007 was for sure an up and down year in the market. High volatility and inexperience led me to a weak gain in my in first full year of active trading. As the year closes it appears I will make roughly $300, a mere 1% gain for the year. I have some ideas and approaches for 2008 which will be outlinde in the next blog. However, below are some thoughts and lessons learned from the year past.
1. Buy in increments and don't be afraid to take some money off the table when a stock has moved up.
2. Playing around with options can be a very successful way to make money. Buying and selling these in increments can lead to exceptional gains; however, pick and choose wisely...much research must be done in order to excel here.
3. Covered calls were a good approach to the solar sector. My dad had a lot of success this past year with these. 2008 could be the year for covered calls in the troubled financial sector.
4. OTM calls are no good unless they are months out. They risk/reward ratio is not good enough for an investment.
5. My 2007 spec stocks did not work well. Had I not invested in these in 2007 I probably would have had a big gain.
6. Companies that now have ridiculous looking dividends may not be a safe investment (AHM).
7. DITM calls are the safest way to invest in options.
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