If you follow my blog, you know that I use two strategies –

1) I invest into dividend growth stocks
and
2) I trade options.
 

When speaking about stocks, I invest into stocks. I do not trade them. In the past I chose dividend stocks for two reasons:

1. Dividend income
2. Long term investment

In the past I tried to trade stocks and apply a buy low sell high strategy. I always ended up with buy high and sell low result. I must admit I sucked in trading stocks. I remember once I wanted to get a better price of Johnson & Johnson (JNJ) stock. So I sold it at a lower price than I originally bought it hoping the stock would fall lower and I buy it back at a much lower price. The exact opposite happened. I sold it cheaper than I bought it originally and bought it back higher than I bought if in the first place. Bummer.

After I successfully repeated this silly strategy adding to my losses I realized that I act like an idiot and put a halt to it. It was a time to change strategy.

Dividend stocks strategy

When thinking about a buy and hold strategy I wasn’t comfortable with it. I wanted action, but safety at the same time. I wanted safety and income at the same time. A dividend growth strategy was the answer.

So, where is the action in dividend growth strategy? It is considered a boring investing. I saw action in building a portfolio adding to positions, little by little and see my income growing. Picking stocks, evaluating them and most importantly looking for the best buy point.

I substituted trading stocks with trying to get the best entry point into a stock. It provided me with the desired action.

Some investors take a certain amount of cash every month and invest it in a regular manner without a regards to a current price of a stock. They cost average their positions. Although it is a legit strategy, it wasn’t for me.

In my heart I am a trader, not investor. Analyzing charts, looking for supports and resistances to find the price I wanted to buy a stock. This satisfied my trader’s desire.

Getting a better price of BABA

Two weeks ago I saw an opportunity to repeat that silly strategy I tried so many times in the past and failed. I saw an opportunity to sell my position in Alibaba (BABA), wait a bit and buy it back cheaper.

In my post about a new trade against BABA I described my reasons why I bought this stock. Now I saw the stock falling. It is not a dividend growth stock at all. It is a speculative, growth play.

I originally bought the stock for $89.9 a share. I could sell it for $88 a share and immediately I placed a limit order to buy it back for $86 a share. A few days later, the trade executed and I bought BABA back for cheaper.

This is not to say that I am going to do this on a regular basis, not at all. I still do not trade stocks. It is just a humble report to my readers about my swap trade, which ended successful.

I hope you had a great last week and be able to spot good stock opportunities.

Good luck!