NAF Case Studies

Plan Your Financial Life (National Academy Foundation)

Chapter 8: Day Trading

Harvey has made and lost fortunes in the blink of an eye. He believes in taking big risks to make big profits. That means buying into special situations in which stock prices could go up or down. Harvey does not believe in holding on to shares of stocks for a long period of time. His motto is, "Buy and sell as soon as you have a profit." Harvey also doesn’t care about stock dividends since he never keeps a stock long enough to earn any dividends. He wants stocks whose price changes frequently.

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Do you think Harvey has a good investing strategy? What are the pros and cons of buying and selling as soon as there is a profit?