July 2022 Investing Update

Posted by

For the month of July, the DOW added 1748 points. That recovered most of the ground lost in June. YTD the DOW still down by 10.5%. Interest and dividend income was $1,249 for the month. Withdrawals for living expenses came to $1,078 for July. Interest payouts are starting to increase. In July my interest holdings paid $298 compared to $171 in June. During the month I sold all my shares of ROKU stock for $97.40 per share, just before earnings. After earnings the stock dropped to $65 (but is recovering today back to $78). My average price per share was $88, giving me a $927 profit. I watched Roku’s stock go from $78 to $98 several times in the 3 months that I held it. This is not a stock that you want to hold for very long. I could have made a lot more money trading on the price action. Buying the stock after earnings and selling it a few days later would have produced a 16% gain. I’m sure the big guys know this and are getting some nice profits.

Setting a price target for when to sell a stock is a good idea. Typically, I like to see a $1000 gain on an individual stock trade but will settle for less if the stock is struggling to going up. Selling dividend paying stocks is much harder, because you are giving up the dividend. That’s why some people wait until after the dividend payout to sell their position. This can sometimes lead to a buying opportunity if you are looking to acquire the stock. In the coming months we need to watch the inflation numbers. If the Fed can get inflation under control, we would see a more stable market. I will be waiting to see how much they increase interest rates. The current federal funds rate as of July 29, 2022, is 2.32%. This is still historically a low level. I expect the rate to be near 5% by the end of the year, as it was between 2005 and 2008. Of course, the deficit has tripled in the last two years which will make it difficult for the government to pay higher interest on their debit. Back in 2005 and 2008 the deficit was 10 times less than it is today. Believe it or not there was a 236-billion-dollar surplus back in 2000. Those days are long gone.

Leave a Reply