Stock Trading

Is It a Buy or a Hold?

One of the most common questions we get at Wanderer goes something like this, "I missed the trade alert on Monday. I see the price of ABC is $X now. Should I still buy it?"

There are some fairly simple rules that will answer this question the majority of the time. Let us break it down by portfolio type.

Buy-and-Hold Portfolio: Generally, if the price is below the original price, or less than 5% higher, you can buy any of these. These positions are meant to be held long-term. If the price is currently lower we consider this to be a short-term blip in an otherwise long-term trend higher. If it is only a little bit higher, that won't matter in the long-run.

Dividend Portfolio: With the dividend account we have added a column for Buy/Hold. If it says buy, then we still consider it a good buy at the current price as of the date at the top of the column. Otherwise it is a hold and probably not a good buy at the current price. The reason the dividend portfolio is different than the buy-and-hold is because we purchased the stocks based largely on what the dividend yield was at the time of purchase, and that changes as the stock price changes. If we bought a stock with an 8% dividend yield and the stock price has gone up to the point that it now only offers a 4% dividend yield it may not be a good buy any longer. However, that doesn't mean that it is not a good hold for those that have it already.

Trading Portfolio: These trades are based on the charts at the time the trade is made. Generally, if it has been less than two days, and the price is still near the same (within 1 or 2%), you can buy. Beyond a couple of days you should probably pass on it, or at least ask us our opinion first. Our trading portfolio trades are often made based on momentum, and if a stock hasn't performed rather quickly it may be better to hold off.

Basecamp: Any time you have a question about a trade, we highly recommend you take a minute to pop in to that day's Basecamp chat and ask us right there. You'll get an answer right away from Pat, Lorin, or one of our regular traders in the group. We also point out many trade setups in Basecamp that aren't available elsewhere. If you see a trade posted in there, but some time has passed or conditions have changed, you should post your question about it there.

Let us know if you have any other questions any time.

Keep Up With the Wanderer Crew No Matter Where You Are


We've attempted to make Wanderer as simple and accessible as possible for our subscribers. We know there will be times you are off doing the fun things in life and miss a trade alert. We also know that when you settle down in a beach chair somewhere you might want to catch up and spend some time with fellow Wanderers discussing trading and travel. We encourage everyone to join us in Basecamp. Ask questions, and share stories, it's a great place full of interesting and fun people.