Ok good. I would never day trade, but that is just me. You can issue a query for this (I won't post it, because some foul-mouthed Yankee is seriously going off): "Day Trading ruined my life" THANOS43 Youtube
While I am no expert, I have traded a fair amount over the past two decades (not quite at old wise man status like Barry...he seems to have some good perspective on this). A stock would have a hard time "selling" if it is thinly traded (as Yankee mentioned)...most of the time these are penny stocks (less than $5). These stocks can be fun to trade but can hurt you badly due to the volatility. The comparison of investing and trading is key as a few have mentioned. Differentiate this in your goals. I don't necessarily disagree with the buy and hold strategy of the S&P index. I prefer to purchase a basket of individual stocks paying dividends and reinvest the dividends into the stocks. Through dividend growth over time and stock appreciation, I have found that the compounding really makes a difference (whoever was splitting hairs on the compounding calculation a few pages ago missed the point...compounding is one if the strongest forces in the universe...ask Einstein). Also, there are different ETFs (Exchange Traded Funds), that you can get a basket of stocks in particular sector (like Pharma)...these offer a lower cost associated with them (compared to Mutual funds). Investing for the long term is not exciting but the law of compounding and inflation should cause your portfolio to appreciate. Invest systematically....put some in each month. As for Trading, it's like going to Vegas everyday. Yes, it is risky and the odds of beating the S&P over the long term are probably close to 0. But, when you go to Vegas do you just play the slot machines or do you hit the tables. Risk Aversion Level depends on the person. I personally enjoy trading. I have my long term goals set on cruise control and I tweak it here and there. I take a portion of investable assets (non real estate) and trade it (for me it is about 20%). It is such a huge topic, everyone is different. Like I said trading can be fun but you have to commit to it. When you take your eye off the ball, that is usually when you get your ass handed to you. Good luck
the best stock traders I have seen held their positions for less than 5-10 minutes, most of their systems were absed on stock/company movements around news events or earnings. ex: Apple posts record phone sales and etc etc..news hit stock jumps 20% you need to be there at the time it rises and check out once you made your 10-15%, and don't get greedy take the 10% , 10,000$ in times 10% is 1,000$ in about 10 minutes time, close the computer and go surfing or mow the grass I was part of a stock group and watched firsthand, this type of trading though you need a large amount of capital to make the share count matter small capital increases you length of time holding and also your chance of losing a real time chat group with people you know helps as news and movements occur and the more eyes the better
that being said you have to trade by rules and adhere to them strictly it can be done but it also is quite time consuming,,,market news is literally 24hrs a day now and world markets etc, i'll share this one years ago was a IPO Chinese company called ticker EFUT, the day it ipo it went from 12,14 16 18,22,24,26,28,30,32.34.36 I couldn't believe a straight run up then I realized the float was so small every time someone bid there were no shares so the price had to rise to entice new sellers..i jumped in around 28 checked out around 39, it ran to 50$ that day
Good perspective Frost. The high speed trading trend is definitely growing. There are super expensive programs you can purchase. I typically have 6-12 stocks I trade (including using options). I study their financials and sift the news and play the earnings calls. I will typically trade a stock anywhere from a day to a month. Depends on the stock. I have traded the same stock many times over. One Biotech stock, I have traded for over 15 years...in and out, in and out.
Yep. It's very difficult for anybody to consistently beat the market average. Most actively managed funds underperform the market over time. Best bet is an index fund. vanguard is hard to beat due to their very low expense ratio. A percentage point or two may not seem like much but it makes a huge difference over the course of several years.
One other thing before anyone is looking to play around in a taxable investment account is that I would recommend maxing out your tax deferred and Roth accounts before you set aside money to play around with. If you don't have enough money to max out those accounts, you don't have enough money to be gambling on the stock market.
Yeah, that's crazy. The only wealth being managed at that point is the wealth manger's. On a $500k account you'd be paying somebody $20k a year to do something you can easily do yourself with a little bit of education. VFINX (Vanguard's S&P 500 index fund) is ~0.16% expense ratio.
Not all banks have a wealth management division, and many that do require a minimum of 1 million to be eligible, but as previously mentioned, you can find them at only 500k. One of many nice "pros" is that you never have to mess with their standard bank branches, wherein you are basically treated like a common criminal, these days, and anytime you require anything at all, you promptly receive it, and via a simple phone call to the president of said division. It most certainly makes life rather simple, but as previously stated, you MUST watch them. I will not mention the bank nor location, but I know of one president of said division whom dipped his fingers into the kitty...very bad boy, he was, and he paid dearly, via the boot.
It is also where you will find many trust funds. It is a good idea to set up a trust (and there exist various kinds) along with a will, but that is another discussion all together.
For 4% they better answer the damn phone... If this works for you, great. For the vast majority of people though, 4% FA fees + expense ratio + misc. fees + inflation = zero/negative net return on investments.
Oh that they do, even the personal cell phone number, and then they roll out the red carpet, if you feel inclined to pay them a visit. I don't make the rules, I am simply telling you how it is.
I am glad you are content with their "service". Even if the 4% includes the corporate trust management fee combined with the Investment Advisory Fee, you are still paying too much. If the 4% is solely the investment advisory fee, you are getting the stinky end of the stick.
No, you're wrong. Again. And you're condescending. Again. Zippy is an intelligent guy. He's asking for basic investing info & that's what I provided in my couple of posts early in the tread. On the different topic: in re: 4% fees.......anyone paying 4% for money management is an utter idiot, and in fact destroys their own poseur routine being put forward, the one with their lil sidebar chuckles of knowing better than anyone. I can locate top money managers in nationally known banks for 1%. Paying a bank money manager 4%....? Is on a level of nutso de facto. It's predominantly the private sector wealth management con men (because that's what is happening for 4%) who are the ones who hit up wealthy individuals & wealthy families, play the all-knowing-mister-nice-guy card & ingratiate themselves with the sucker (that would be the person paying 4%). It's been proven, with hard cold numbers, over & over & over again, that actively managed funds have never beaten the index funds over the long haul. Not ever. If your 4% con men maintain that they are beating the S&P, and you believe them, then you are getting played. Hedge funds are notorious for this ^^ Might want to check that old-time but still-awesome book 'Where Are the Customer's Yachts.'
