Mike Karbowsky

James,
First of all welcome to the world of investing in stocks! By subscribing to the Bowser Report and posting questions here on the forum you can become a “student of the game” following your investments.

Right now during the Covid recovery the markets are very volatile across all sectors. The markets have set records in regards to daily highs only to see them pull back in a few trading sessions. There is an indicator that is used to help investors determined volatility. It’s called Cboe Volatility Index ticker symbol VIX. For and explanation of what it is and how it works Click here

Once you understand volatility the next piece of the puzzle is a correction. A correction is a decline of 10% or greater in the price of a security, asset, or a financial market. Corrections can last anywhere from days to months, or even longer. While damaging in the short term, a correction can be healthy, adjusting overvalued asset prices and providing buying opportunities. If there is market growth after a correction the market remains bullish. If it continues to decline to the 20% mark or beyond then the market is termed to be a bear market.

Finally to the point of your question – a crash. A stock market crash is a rapid and often unanticipated drop in stock prices. A stock market crash can be a side effect of a major catastrophic event, economic crisis, or the collapse of a long-term speculative bubble. This was experienced in February and March of 2020 when Covid 19 became a world wide pandemic. The markets retreated their gains, March 2020 saw one of the most dramatic stock market crashes in history. In barely four trading days, Dow Jones Industrial Average (DJIA) plunged 6,400 points, an equivalent of roughly 26%!

The moral of the story is that it is very difficult to time the market for either buying or selling equities. The rules of the Bowser Game Plan help maximize profits and minimize losses.

Thomas Rice made a very valid point regarding the psychology of the investor. The stock(s) you chose will undoubtedly rise and fall daily, weekly, monthly, etc. You can’t control that. What you can control is the amount of risk you are willing to take with your investments. Bowser Game Plan Rule #5 SELLING PLAN: Sell half of your holdings when the stock doubles from your purchase price. Sell the remainder after the stock drops 25% from its most recent high. If the stock drops 50% without doubling, sell all sharesis a great fundamental rule for any investor. Basically don’t sweat the up & down bounces until the cumulative loss fits into Rule #5.

I hope this gives you some insight into market behavior.

I use TD Ameritrade. All stocks listed on the major stock exchanges trade for free. OTC stocks trade with a $6.95 commission.
They have a decent mobile app too.
I do have to agree with KirkZ – a brokerage firm is a matter of personal preference.

For those of you that may be using this spreadsheet for tracking purposes and have encountered a reverse split as seen with VHI you need to add the decimal equivalent of the split for the spreadsheet to calculate the reverse split. The syntax of the formula for the split category is positive thinking meaning a stock splits in a positve (to investors) manner such as 2:1, 3:1, etc.
In the case of VHI which was a 1:12 reverse split, divide 1/12 = 0.083. This value is then entered in the stock split ratio column in the transaction tab.