Welcome to 2011!

By Rick Walter

What a year it was in the markets in 2010. It was extremely difficult to make money in the markets in 2010, although most major indexes ended the year on a positive note. The issue was do you sit tight using a “buy and hold strategy” or do you “trade”, taking profits as they occur, or do you use a combination of buys (going long) using puts and calls options to hedge and protect your positions, a strategy that I have tried numerous times over the last three years without much success.
 
The market played-out like this in 2010: it initially started off on a down note then picked up steam through April; the markets then “flash crashed” in May but recovered quickly; then the markets stalled during the summer but again picked up a little steam in the Fall- just enough to get you excited, and then came to a screeching halt around November- December. You needed balls of steel to trade effectively last year or the fastest computers on the planet.

Unfortunately, I had neither- lol. I misfired on a number of positions –either buying too soon or selling too soon. I hesitated repeatedly and missed the run on certain stocks, where from a technical standpoint, I should’ve been buying like there is no tomorrow; I shorted while I should’ve gone long on technology and almost lost my shorts. In the final analysis, I learned that a profit of 5% earned is still better than 5% not earned. Even though I made numerous missteps last year, I still made money. I look forward to great things this year, and hopefully we can all make some money in 2011.