The following article was written by our guest blogger Rachel Fox. She is a 16-year-old movie actor and part-time trader. In this post she tells us how she works and makes over 30% return by stock trading. On her blog Fox on Stocks she teaches people how the capital market works.
My name is Rachel Fox and I am a 16-year-old successful day trader, making slightly above a 30% return on my day trades in 2012, sometimes reaching return levels of 64% and higher.
My primary work is acting. I am best known as evil Kayla on Desperate Housewives, Chloe on the Daniel Craig film Dream House, and other roles on shows and movies including Alias, Melissa & Joey, and Private Practice.
I’m a closer, a high risk-taker, and an adrenaline junkie. That’s why I’m a day trader. My time horizon is anywhere from hours to a couple of days. I look for stocks that have a history of volatility, swings in price anywhere from 50 cents to dollars at a time. Generally, those are stocks with higher volumes, but on occasion, there are few stocks that trade in lower volumes, but for some reason undergo a volume spike. I’ll go after them because there is likely a reason behind the spike and spikes in volume smell like blood to a day trading vampire.
The companies I focus on vary from trade to trade. The stocks must be stable companies, with a long trading history, and as I mentioned, have a good amount of volatility. I love $MMM, $EBAY, $SBX, $SLB, and $APC. I generally do not target sectors but I may do so in the future.
The most unique aspect of my trading is that I often sell stocks short. Because of the infinite loss potential, most people do not sell short. Maybe it’s because I know that what goes up, must come down, or that I have a sense about the market, industry, and company factors that lead to a stock’s price decline. I don’t know why, but I am successful with short selling.
As I get older and need to lower my risk exposure, I will turn to longer-term investments. I’ll buy mutual funds, bonds, and individual stocks for their stability and dividend potential.
I love receiving dividends on the stocks I buy on quick trades. It’s like getting a surprise gift! I can imagine how happy long-term stockholders feel when they invest long-term in a company and get the dividend payment from the company. It’s a Wa-Hooooo moment.
I recently discovered an investing strategy called The Dogs of the Dow, which teaches an investor to invest in the 10 top highest yielding stocks of the Dow Jones Industrial Average. The results are remarkable. If a person invested according to the Dogs of the Dow strategy since 1973, their overall return would be 20.9%.
You can read the entire piece on the Dogs of the Dow here: to learn the strategy and learn further about Small Dogs of the Dow and Pigs of the Dow.
Whether you buy long or sell short, or whether you invest for the long-term or trade quickly for a short-term gain, focus on the prize and enjoy those little gifts that seem to fall from the sky…. The dividend payments.
Many Happy Returns,