The fundamental process I use to determine whether or not I will take a position into an ETF or equity stock is to apply the Avokado Decision Tree.
Situation
A bullish Google ETF GGLL 0.00%↑ is currently trading at $29.06 (at close of market today). Should I buy 100 shares of this ETF?
Mental Exercise
Savings. While a very basic question, I ask myself do I have enough savings to cover this position. As a seasoned trader, the answer to this question is always yes as I have accumulated enough savings to conduct most any trade.
Investing. Naturally, since this is an investment, this is suppose to yield a return. So I ask myself what can I expect for a rate of return and over what period of time? If the rate of return and the time horizon are acceptable, then this checks the second box of taking a position.
Be entrepreneurial. Being entrepreneurial when trading equates to being creative or innovative about executing the trade. Should I buy 100 shares straight up or do I dollar cost average into my position? Is there an expected volatile event like a court ruling and should I set a sell order prior to the ruling? Being entrepreneurial causes you to think two steps ahead and prepares yourself for any up- or downswings so that you can stay rational on what to do next.
Live Action
Right now, I would not take a position in GGLL as ADT #2 doesn’t check the box for me. Specifically, I would like a 10%-12% return in less than 60 days, and the current price is not a good entry point to achieve my objective.
Note: Please read the 24Hour Journal disclaimer regarding finance and investing information on this site.
TUTORIAL: How to determine buying into a position
TUTORIAL: How to determine buying into a position
TUTORIAL: How to determine buying into a position
The fundamental process I use to determine whether or not I will take a position into an ETF or equity stock is to apply the Avokado Decision Tree.
Situation
A bullish Google ETF GGLL 0.00%↑ is currently trading at $29.06 (at close of market today). Should I buy 100 shares of this ETF?
Mental Exercise
Savings. While a very basic question, I ask myself do I have enough savings to cover this position. As a seasoned trader, the answer to this question is always yes as I have accumulated enough savings to conduct most any trade.
Investing. Naturally, since this is an investment, this is suppose to yield a return. So I ask myself what can I expect for a rate of return and over what period of time? If the rate of return and the time horizon are acceptable, then this checks the second box of taking a position.
Be entrepreneurial. Being entrepreneurial when trading equates to being creative or innovative about executing the trade. Should I buy 100 shares straight up or do I dollar cost average into my position? Is there an expected volatile event like a court ruling and should I set a sell order prior to the ruling? Being entrepreneurial causes you to think two steps ahead and prepares yourself for any up- or downswings so that you can stay rational on what to do next.
Live Action
Right now, I would not take a position in GGLL as ADT #2 doesn’t check the box for me. Specifically, I would like a 10%-12% return in less than 60 days, and the current price is not a good entry point to achieve my objective.
Note: Please read the 24Hour Journal disclaimer regarding finance and investing information on this site.