I told you that buying TLT was a bad idea, that you didn’t understand its fundamentals. You replied that you didn’t want to understand them, because you didn’t need to. Now, you’re either seriously underwater on your holding of roughly 778 shares, or you did honor your mental stop of $103 and change and got out yesterday for a loss. So, which is it?
Yes, anything can be traded as if it were just flickering lights in an arcade video game. But serious investors or traders --instead of just pretenders and wannabe’s – pay to fundamentals, because it’s fundamentals that make charts, not the other way around. Not necessarily in the very, very short term. But sooner or later, their impact gets manifested in prices. Period. End of story.
Secondly, you claim you bought TLT --and some other equally bad choices --for its dividend. But TLT’s yield is a pitiful low 2.70%, or just 45% of what the short end of the yield curve has been offering lately. But because you don’t understand how bonds are priced, you bet on the long end of the curve. Not smart.
In sum, if you’re going to make bets on bond derivatives --which is what TLT is-- then it makes sense to understand what its underlying is and how that is being priced. But you scoff at “fundamentals”, and you’re now suffering the consequences. Not smart, and not very “professional”. And, No, I’m not being very nice about this, because I’d like you to succeed.
So, here’s what you need to do. Get a hold of a copy of Sharon Saltsgiver Wright’s book, Getting Started in Bonds (any edition) and work your way through it, pencil in hand to underline key points and calculator at your side to work through every example. Once you’ve done that, then work your way through Barnhill’s book on high yields, as well as Graham’s book on value investing. Then hop on over to E*Trade and teach yourself how to use their bond seach engine.
What you’re going to discover is this. Your so-called ‘divvie program’ is high-risk, low-yield nonsense compared to what you should be doing if you were really serious about constructing income streams for yourself in a disciplined, professional manner.
Spoiler Alert: We’re in a recession and headed for a depression. Understanding the fundamentals is going to become more important than ever.