Stock Trading after Layoff

I was recently notified I will be laid off from my job as an analytical chemist. Since I will have some free time soon, I thought I would share my experiences in stock trading over the past 26 years. I will try to make bold any text which I consider important factors in making money in the market. Ideally, I would like to make money by trading my 401K. If I could turn this into a trading business, I could gracefully slide into retirement. I realized several years ago that I had been training for this my whole investing career. My employer's plan allows me to make one trade a day. This gives the flexibility to get out of bad trades quickly before losses become too large.
Since this is my first post I thought I would relate my initial investing experience. I started in 1983 with an IRA account at Fidelity Investments in the Magellan account. At that time it was no load meaning it had no sales charge. The market fell over the next six months but it seemed to be a good time to be in the market after interest rates had just fallen from the mid teens to single digits. In 1984, I invested additional money in a non IRA Magellan account and in the Overseas fund. The market was up in 1984. I tried to talk my dad into putting money into some mutual funds but he was a Certificate of Deposit man and would not do it. I told him I would guarantee his principal but no go. I continued to add new money to the funds in 1984 and 1985 and things were great. I found out I could borrow money on margin and buy twice as many shares, which I did. In 1986, the price of oil fell from $36/barrel to the teens and stocks took off like a rocket. I did not know why but I was happy. In early 1987, my dad said he would like to put some money into mutual funds. I told him that I wasn't sure it was a good time. He did it anyway. I should have listened to my own advice. I was fully margined during the 1987 crash and I was introduced to the margin call. I was able to scrape enough money together to meet it. The market bounced up and down for 3 months and I finally decided to sell most of my shares and repay the margin loan. This was an important lesson. When people who normally have no interest in the stock market suddenly do, it is time to get out.

I take no liability for any losses anyone may sustain by reading this. The stock market is a tremendously difficult place to make money and each individual is responsible for their own investment decisions. I give no investment recommendations, only relate the factors that I consider important in making the decision of how to invest.
I will relate more in my next blog.
(c) 2009 - William Jones - All Rights Reserved