Nikki Dunn — Combining technicals with fundamentals for long-term trading

Smarter Trading Podcast Episode 10

Hello everybody, our guest today is Nikki Dunn, a trader, investor, and Certified Financial Planner. Nikki is the creator of She Talks Finance, a financial education platform to help people learn money in a fun and approachable way.

In this episode we talk about Nikki’s framework for picking companies and investing in stocks. She discusses the fundamental criteria she looks for, trading around positions, and the mental side of holding stocks for the long haul.

We also get into the value that a Certified Financial Planner brings to the table and some of the optimization points active traders should think about like trading in the right account structures, taxes, and a lot more.

Please enjoy this episode with Nikki Dunn.

This episode is sponsored by Investor’s Business Daily

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Right now Smarter Trading podcast listeners can get their first 2 months of IBD Digital, a subscription service that gives you access to IBD’s proprietary market analysis and top trade ideas for only $20 by signing up at investors.com/evan.

Watch the interview in video here

Key learning points

• Split your investing into multiple portfolios (accounts) 
  • One portfolio is passively invested in index funds
  • Second portfolio is actively managed picking stocks
• Understanding where you are in the macro environment helps you understand what can happen with your stocks
• Key fundamental metrics: revenue growth, debt, valuation, relative valuation, management.
• Find trade ideas using technicals and then follow up with fundamental analysis
• Trading around core long-term positions
• Be sure to define your strategy ahead of time and don’t confuse strategies
• Trading and investing is a practice just like yoga is a practice
• Spend time on your business structure, account types, taxes, insurances
• Do you qualify for day trader tax by the IRS standards?
• Actively trading in a self-directed IRA account
• Get your long-term investing set up first and then focus on active/short-term
• Emotional mistakes all stem from risk

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Episode timestamps

0:00 Introduction
3:00 Nikki’s background & evolution from day trader to fundamental investor
8:50 How Nikki interprets the macro environment
11:21 Fundamental research and the factors to consider
17:38 Portfolio construction, trade management & average hold time
24:13 Mental side of trading and holding onto trades for the long haul
29:35 The importance of a Certified Financial Planner
32:40 Who should be actively or passively investing their money
35:58 CFP tips: trader tax status, account structures, and IRAs
44:15 Buying short squeezes & starting as a long-term investor
46:45 How to optimize the mental side of trading

Highlight clip: What to look for when analyzing the fundamentals of individual stocks

Highlight clip: Certified financial planner on optimizing active traders