What to do with an orphaned account? In this case, it’s a Roth IRA account that got hit hard by losses last year, leaving only a small amount of cash? Especially if, like me, you’re retired and so can no longer put new funds to fill the tax-deferred account.
It’s too little money to productively trade using options. The only conceivable strategy is one that has long been anathema to me: Buy shares and hold them, praying that Fortuna will smile upon them.
I did that bit of housekeeping this afternoon, establish a small number long-share positions in AAPL, CHK and FXI.
There’s very little strategy behind these choices.
AAPL because, you know, Apple. They’ll eventually produce a roaring success, they’re smart and focused, they have a lot of cash, and they like to do stock buybacks to keep shareholders happy.
That left a few bucks remaining, so I had to fit prices to what I could afford. I chose CHK because its the oil business, which often moves independently of the broad markets (and also as an homage to my father, who got his start in business as a partner/accountant of a drilling contractor firm in Oklahoma), and FXI because China, although a wildcard at this point, seems to have a long-term strategic plan that I suspect will result in a rapid recovery, no matter how much tariff pressure it faces from the U.S.
The AAPL entry price was $223.96 per share, CHK $4.00 and FXI $41.21.
By Tim Bovee, Portland, Oregon, Sept. 14, 2018
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.
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