Buying Stocks in the Present Market

It might not seem very wise to buy stocks at the moment, as most appear to be falling and/or reporting of expected losses. However, it's far from all stocks that are in bad shape and it might not be as many as you'd think.

The stock market acts very strange at the moment with both ups and down. Analyst predict both boom and bust, housing market is going down but gold and oil is soaring. The sub-prime crisis might not be over, the credit crunch seems to still be crunching and today I just read an article that mentions credit swap defaults, which might be the "next" sub-prime crisis (basically, those who lent money also bought a form of insurance and not all insurers expected to have to pay out, making it possible that even more companies will go out of business).

Amidst all this there are still some money to be made it seems. I was lucky to stumble across Illumina (ILMN) last week and bought a few stocks in them. Since then it's gone up around 23%. Not bad in a few days :) Apple (AAPL) also went up the last few days (after taking a beating with the rest around new year's) and I expect it to rise even further once they've announced that-shiny-new-cool-gadget later today (rumors have it that it's a sub-sub-notebook, possibly with a solid state "hard drive" and other new stuff).

So far I'm only up $18 from my initial investment, but I'm still learning and either I've just been really lucky with my last few stock trades, but it seems to be heading in the right directions now...

My current portfolio (which is very small, both in terms of funds and amount of stocks) is Illumina and Apple mentioned above, plus General Motors (GM) becausee I think they're cheap at the moment and because the Americans will probably buy "local" cars as the dollar keeps de-valuating and imported cars will become more expensive for them. I've also bought iShares COMEX Gold Trust (IAU) as their price is supposed to follow the price of gold, and I believe the gold will go higher than it already is due to a falling dollar and general nervousness on the stock market.

For all stocks I've set a STOP marker, to ensure they're sold before the price falls below what-ever threshold I've decided on. Usually a maximum loss of 5% or close to the current price if the stock has risen in value and i stand to make a profit.

Hopefully I'll be able to make a profit off of this, but in either case playing round with stocks this way have taught me a lot about the market and provided me with a new "world" to learn, which was the main idea.