Friday, January 25, 2013

An Apple A Day

In March 2009, when the stock market was in the pits, I bought some Apple stock.  At the time it was priced around $100 and I bought 25 or so shares (a $3000 investment).  Well that Apple stock did tremendously well, in fact many stocks purchased in 2009 did were winners, because the market has, overall, gone up.

As an aside, we only buy individual stocks in our IRAs, so that is $5,000 for each of us per year in stock purchases (now $5,500).

If you follow the market or new regarding the market, you probably know that Apple has been down from a high of $700 per share down to a low of $437.  I did some research and, since I just funded my 2012 IRA, I decided to buy more Apple stock.  Whether or not that was the right decision is not the point of this post.  So I picked a limit order price of $428 earlier this week and put in an order for a few more shares.  But, instead today I decided I couldn't hold out anymore and switched my limit order to a market order (meaning I was going to buy at whatever the market price was that day) and purchased my shares today at $451 per share.

This is not the first time I've switched a limit order to a market order and I need to figure out why I can't wait to see if the stock price comes down to my limit order price.  So, I'm posting this to remind myself to watch the Apple price and see if it comes down to my original limit order price or not.

1 comment:

Anonymous said...

The answer is yes, it went down to $420.05 on March 4th.

Why did you "chase the stock price higher"?

The short answer is that while you're obsessive about the rules for much of your financial life, you aren't familiar with investing in stocks and don't know any of the rules.

Further, you aren't putting any serious amount of time into investing in individual stocks. If you're not willing to spend the time, you should buy a whole market mutual fund or ETF and hold it for the long term.

Finally, let me remind you of something I wrote in a comment to you some years ago. You are now at a point where, given your net worth, you are, or should be, earning more from your investments than you can save. Your savings goal this year? $69K. What you should be earning from investments worth $1.1M? $110,000. Or, if you've included your home in your net worth, 10% of your net worth minus the value of your home.

Maybe it's time to focus on the return on your investments instead of Mr. Sam going out for lunch?