Can anyone explain this to me? When you go to sell a stock to cash out at a high number is there always someone to buy it? Or are you forced to hold it until a buyer comes along? Is there ever a point when you say sell and nobody buys? I've never been involved in stock trading other than mutual funds and am paper trading now to see if I could learn and play the marked with a small amount of money. All my limited assets have always been in material things like real estate, collectibles etc, that's probably why I'm pretty broke.
Collect collectibles because you like them not to make money. You'll get sick of beanie baby and pogs stew real quick.
Dude. It depends on liquidity, always, in any market, stocks, real estate, pusssy.... anything. If you don't mind my asking, what is the equity that you're trying to sell? And, more so, you seem pressed to dump it or is this just paper trading? Basically, there is usually a buyer for a seller. Again, though, depends on liquidity. So, yes, to answer your direct question sometimes there are points where there are no buyers. Also, if the market is in the midst of a downdraft there will be typically be fewer buyers until things stabilize. One thing you want to watch is the spreads (difference between bid & ask aka buy and sell). In a market with poor liquidity the spreads are typically very wide. In markets with good liquidity the spreads are usually pretty tight. May I suggest that you purchase John Bogle's book 'The Little Book of Common Sense Investing' and after you read the initial 100 pages, then put your money in Vanguard 500 index fund. I'm not being snarky. If your investment horizon is over 5 years out, just put it in the VANG 500. I'm not a broker. I spent 5 years on The Street in NYC & Princeton & Malibu, trading everything from currencies to precious metals to stocks to orange juice & pork bellies & plywood & derivatives. It can get complex. Don't let it get complex. Seriously, it's no big: index funds, mang. You win threefold plus one: very low annual fees, very low taxes due to the fact that index funds rarely sell positions & thus they do not subject you to taxable events, you attain diversification because you hold every stock in the S&P 500 ..... & the index funds have beaten every single actively managed fund with a better annual return over the past 40 years. And I'm happy to answer questions over coffee at Assateague Surf Shop one of these days if you wish. I think it's great that you're seeking answers & a solid financial future.
Thanks for the help. Not looking to liquidate any of my assets just thought it would be fun to try and learn how the market works by paper trading and maybe risk a little eventually to see if I could get it to translate into a profit. I have always been into tangible assets like homes, land, coins etc. I like things I can see and touch and have always been nervous about stocks. It doesn't help that I bought land for my business right before the real estate crash and really lost my shirt. I came out with money in my pocket but lost what is a lot of money, at least to my meager funds.
My pleasure. Paper trading is a good thing to do; I still do it with positions that I'm thinking about but don't want to commit cash to. It's honestly very tough to make money trading stocks. Lots of folks will make lots of noise about how they scored trading such & such, or how they are making beaucoup bucks or how their broker is killing it for them, blah blah blah. It's always smoke. Similar to the guys who love to go to Vegas & never lose, always net winners. Yeah. Sure you are. You know who the people are who get killed the worst? Doctors and dentists. They're intelligent people, worked hard to get where they are, have done well in life, they know they're smarter than most of the genpop & they possess usually pretty hefty egos, and they think what's the big deal, this investing stuff is easy. No. It isn't. Easy. These guys would go into trading, when I was on the bro side of it, and get crushed. They are the suppliers of the blood pool where the financial sharks swim. At this point in your life, I'll say it til people puke, put your money into index funds. Keep chunking your money into that index fund, let the miracle of compound interest take over, check it in 10+ years & smile for a long while.
http://www.moneychimp.com/calculator/compound_interest_calculator.htm Play with that all day long ^^ Put $30k in, add $1k per month / $12k per year for 10 years @ 5%.....see where you end up.....$207k
Generally, when you sell, your stock price drops a couple of cents. And yes, you can put a stock up for sale and it never sells. But those would be very loser type stocks, ones that nobody else has an interest in. I have been trading for many years Zippy. Some advice based on *MY* experience, not anybody else's. 1) Biotechs are toxic. They are news depended (new inventions, products, ec) and they are volatile; you can lose your shirt with them. Pharmas, on the other hand are stable. 2) Try to earn a little with each trade; do not expect a "killing". If you do, you usually kill own account. 3) If you can, trade with dividend paying stocks. The reason for this, sometimes you buy a stock and the price per share decreases. I will usually hold it until the stock prices rises to provide me an earning. In the meantime, if I have to hold for say 6 months, I earn 2 quarterly dividend checks. IMPORTANT: You never lose or earn with the money invested unit you sell the stock. 4) Pick 10 stocks you think can earn you money with: get to know them. Follow them DAILY, so you get an idea how much, on average, their daily rise and fall is. Some I trade with MRK, PFE, CSX, MS, ZTS, T. 5) Be patient--if a stock goes down, do NOT sell it right away--give it plenty of time to come back. I have waited for months and I always end having earnings....IF I WAIT!! 6) DO not try to time the market--losers do that. 7) As you mentioned, use only a portion (you determine %) of your assets. Lastly, there is indeed a learning curve. You will get burned here and there. If you make money3 out of 4 times, you usually win. Just be patient. Oh, one more....I NEVER short stocks, i.e., betting they will go down, neither do I do options. The reason why--I do not understand the process and the logic, so I stay clear from them. Good luck And btw, I agree with yankee.....it is hard to earn money trading, and there are better ways to earn money. Analyze WHY you want to trade. If it is just "to earn extra money"....ETFs, or a a bond fund etc would work just as well. Personally, I trade because I enjoy the process. It keeps my brain involved in the world in ways that is a departure from the rigid scientific world I lived in before retiring.
One of my first jobs was as a paralegal for a corporate tax/estate planning attorney, having graduated second in his class from Harvard, and he was an excellent mentor. Toss a little in just one stock and watch it; that is the best way to learn. I have been living off of my stocks for over a decade, now, but when a natural disaster comes along, I do get involved. It's really not a big deal.
I will add that I lost my butt on my first purchase, and it was a great learning experience. It was long ago, and Delta Airlines had taken a hit, causing their stock to plummet. I thought it might be a wise gamble, and so I dumped 1k on it...bad move...lost it all, and hated it, lol. I really do not pay much attention to the market, which did hurt me back in 2008, because I waited to late to move quite a bit, but that is simply how it goes, and I have since made it back up; however, I find that is the best way of dealing with the market (ignore it, or you will sweat).
Zippy, especially do not accept adviCe from an individual whom does not know when to utilize the word over adviSe.
wow been a while since I checked in... and this topic is front and center on a surfing forum... Oh man, this post has to be a joke... but I will throw my 2cents in there just in case it's not. there are 2 groups of "traders" someone like you needs to know about. "traders" because it sounds like you are talking about playing the market on a daily basis, which would make you a trader and not an investor as the other advice covered certain points to that matter. also if you want to be a day trader, with out 25k plus an account on margin, you will be limited to 3 trades in 5 days or a non marginable account which means you'll have to wait 4 days for your closed trade to return to your funds available for trading. first group 100% of new people who try to trade the market with their own money get hurt (don't underestimate the word hurt here... hurt and bad). second group 100% of people who trade the market successfully with their own money had gotten hurt but educated the hell out of themselves and learned how to trade stocks. Now just because you WILL be part of the first group does not mean you will then become part of the second group. my advice to you - hire a professional investment firm and go live your life. If you're serious start learning and developing technical chart reading skills. short term 1min to several days is 90% charts and 10% news. good luck and prepare to have your sh!t thrown in.
Thanks for all the insight. If I'm anything I'm cautious, while surfing, while breeding pigeons and especially with money. I'm just gonna play around paper trading for the fun of it and look into what Yankee advised, thanks again for the help.
On your first point above--wrong. I have been trading for years, and have done very well, but... On your second point, above-- perhaps....but, have had to learn over the years , that is very correct. On your third point above--"professional" traders are usually "exalted morons". They do not pay attention to YOUR funds; you can lose because they ain't watching it for you. The only person that will earn you money worth bragging about is YOU. But you have to be on it every day once you buy a trade. Trading demands focused attention, look away, and your opportunity just disappeared; you have to now wait a bit for it to happen again. Take your morning sh1t BEFORE the market opens.
