Stock Trading 101

[Phizzer]

I have been watching the market consistently for the past five months, killing time until the snow starts flying, and have gotten to the point where I feel I have a good idea of what's going on. Just wondering if there was any other forum members who like to trade stocks? I figured I would start a thread about what's going on, possible good opportunities, etc. so we could all keep each other in the loop.

I had a good tip that I should of jumped on when GoPro went public and I know of a few guys who made a good chunk of money on the stock when it almost tripled from its opening price. Wish I would have bought in then, but I didn't have the experience and wasn't comfortable enough with it all yet. Now the stock is down to a little over its opening price.

I went ahead and opened an account with TD Ameritrade. There fees are reasonable for single purchases, limit orders, etc. and am going to watch the market this week and make some purchases on Monday.

What broker are you guys using? Are you happy with them? Pros/cons?

Is there anybody that holds stock within the sled community? Cat, Polaris, etc.? Just trying to get some good ideas and conversation started!


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[go high fast]

Since I am a dinosaur I am reluctant at this age to purchase individual stocks on my own so I have consolidated my savings with the Wells Fargo advantage funds. I have been satisfied with their selection of funds as well as their investor website options to keep track of and manage everything. Thought about using USAA as a second family of funds but just decided in and keep it all in one place.

http://quicktake.morningstar.com/fundfamily/wells-fargo-advantage/0C00001Z1O/fund-list.aspx


https://www.wellsfargoadvantagefunds.com/wfweb/wf/portal/product/funds.jsp?find=all

 

[Jeva]

Are you an investor or a gambler? Timing the market is a lot harder than you might think. Maybe try some paper trading to see how that goes. Do you consider your self a long term investor or a short term investor? Did you open a standard taxable account or some type of IRA?

I buy stocks but only for the long term and only stocks that pay a dividend? These dividends will be my retirement income. I have a roth IRA with tradeking.com cheap trades if thats all you need out of a broker. Here are a couple stocks i'm looking at for future buys. But my wants and needs might be different than yours.

Altria Group - MO
Coca-cola - KO
Cummins - CMI
General Mills - GIS

None of these stocks are going to triple in a year but they also are probably not going to fall 33% in september either like gopro. To me stock price movement isn't as important as there dividend payout record is.

 

[Phizzer]

I've got a Roth and Mutual Fund account with Edward Jones that I'm using for long term investments. Plus my job has a deferred comp. and supplemental annuity plan I'm dumping money into every two weeks. I'm looking more to invest and have my money making more than the .75% interest rate in a savings account. However, I am not against taking risk as long as I know enough about the company prior to doing so. That way I can't blame anyone but myself. I've realized that timing is key when it comes to this game. I don't have enough experience with stocks that payout dividends. Is it annually? I'm familiar with three of the companies you described but not Altri, I'll check into them!

The GoPro stock I would consider to be a gamble that paid off well. But timing was key. I would like to get into some other Tech companies that haven't gone big yet or are considering going public. Not sure if any of the drone companies have opened up for that yet, but I feel there has been a large movement in that field.


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[Jeva]

Altria is a tobacco company (malboro and many others) and owns 26% of Miller brewing which Bud is buying for 106 billion.

Most dividends are paid quarterly some reits are paid every month (Realty Income Corp - O is one I own that pays every month). A lot of companies raise there dividends every year and some have raised there dividends for over 25 straight years or more. Some of my stocks are up and some are down but I don't really care as long as they keep paying that dividend.

So you have a good start with other investments, my stocks might not be what your looking for.

What is your loss limit? If you buy a stock and it goes down 5% 10% 15% 20% 50% when do you sell? When would you lock in your profits? If a stock goes up 5% 10% 15% 50% 100% 200% when do you sell? This is only for discussion and not meant to discourage.

 

[Phizzer]

Ok, that makes sense. Quarterly dividends seem to be a good payoff to look for. I see some range from 25 cents a share and up.

Valid point about loss and profit limits and by no means is it discouraging! I feel that if I am going to start investing, that I have to have a cutoff of 20% on the loss and to be conservative 50% on the profit. I want to be able to protect my investment, not trying to become a multimillionaire, but like I said, make more on my money then it does in the bank. I like the mutual fund I have, not a huge return immediately and the risk is ultimately low. The buy out of Miller is interesting and could be a profitable trade. I'm going to research more about that.

A monthly dividend would be nice though!! I'll have to look into the market more and see where money is going and exactly what is going on. Have you been trading for awhile?


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[bobback]

I'm long term myself; not a day trader. I have a broker that makes most decisions for me based on what my goal is; but I have also picked some stocks myself and made the final decision based on brokers advice. Peace of mind is worth something here.

Thus when I pick a stock / mutual fund, I ask, odds are will this be a good holding 10+ years down the road? As I don't want to be selling / buying every few years.

Knock on wood, my overall portfolio has done fairly well. And I think it's sticking to my core principles.

And had a realization of this just a few weeks ago, when the market was looking really bad. My broker said could be a good time to dump some things and pick up other things that may have a better chance of rebounding. Which kind of made sense, but the flip side was I wasn't going to dump a solid stock that I've held for a few years that odds are is going to rebound in time, to pick something up that may rebound better. Seems like a bunch of fees that a person doesn't need to pay.

Some stocks that have been good to me:

AAPL - just look at what that has done since going public! Along with V and UA.

Of course I've had a couple of losers, those being CAT and IBM currently; but odds are these will be good in 10 years so not going to dump them when down. Thus maybe a good time to buy some of these?!

And for mutual funds...can't hardly go wrong with the American Fund Family. You can almost hang a list of them on the wall and throw a dart at it and pick some winners for the long haul.

 

[Jeva]

I'm long term myself; not a day trader. I have a broker that makes most decisions for me based on what my goal is; but I have also picked some stocks myself and made the final decision based on brokers advice. Peace of mind is worth something here.

Thus when I pick a stock / mutual fund, I ask, odds are will this be a good holding 10+ years down the road? As I don't want to be selling / buying every few years.

Knock on wood, my overall portfolio has done fairly well. And I think it's sticking to my core principles.

And had a realization of this just a few weeks ago, when the market was looking really bad. My broker said could be a good time to dump some things and pick up other things that may have a better chance of rebounding. Which kind of made sense, but the flip side was I wasn't going to dump a solid stock that I've held for a few years that odds are is going to rebound in time, to pick something up that may rebound better. Seems like a bunch of fees that a person doesn't need to pay.

Some stocks that have been good to me:

AAPL - just look at what that has done since going public! Along with V and UA.

Of course I've had a couple of losers, those being CAT and IBM currently; but odds are these will be good in 10 years so not going to dump them when down. Thus maybe a good time to buy some of these?!

And for mutual funds...can't hardly go wrong with the American Fund Family. You can almost hang a list of them on the wall and throw a dart at it and pick some winners for the long haul.

I did pretty good with AAPL too, thanks to their 7 for 1 stock split. I sold after that but they have so much cash.

Yeah CAT and IBM are great dividend stocks that just keeping raising their dividends. I wouldn't sell them either. In fact IBM is considered undervalued right now and might be a good buy now. I might have to check them out again. Do you DRIP your dividends?

 

[bobback]

Of course DRIP!

 

[Phizzer]

My mutual fund with E Jones is AMECX and has so far been a good investment for me. I want to start building a diverse portfolio to cover my assists in the event of something. I agree with the Disney stock being spread out over multiple industries, I like that. IBM is a little pricey for me just starting out, I'd have to put all my eggs in one basket. I like the idea of dividend reinvestment plan. Several companies offers this within the DOW correct?


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[polaris dude]

I have been watching the market consistently for the past five months, killing time until the snow starts flying, and have gotten to the point where I feel I have a good idea of what's going on. Just wondering if there was any other forum members who like to trade stocks? I figured I would start a thread about what's going on, possible good opportunities, etc. so we could all keep each other in the loop.

I had a good tip that I should of jumped on when GoPro went public and I know of a few guys who made a good chunk of money on the stock when it almost tripled from its opening price. Wish I would have bought in then, but I didn't have the experience and wasn't comfortable enough with it all yet. Now the stock is down to a little over its opening price.

I went ahead and opened an account with TD Ameritrade. There fees are reasonable for single purchases, limit orders, etc. and am going to watch the market this week and make some purchases on Monday.

What broker are you guys using? Are you happy with them? Pros/cons?

Is there anybody that holds stock within the sled community? Cat, Polaris, etc.? Just trying to get some good ideas and conversation started!


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TD is good that is what I use. I started a thread here at least a couple years ago, but alas no interest. I watch the market daily and try to buy dips and I pretty much hold regardless of what happens. Right now I am 22 years old so my tolerance for risk in this account is incredibly high.

Currently own 3 stocks: from lowest risk to highest risk
Ford-drip set up owned the stock for over 3 years now and added to my position when it went down to 13.40 or so.

TGA(canadian oil company) 7% dividend + solid financials when I bought it a year ago(didn't expect oil market to be low this long, poor planning on my part, but regardless I don't expect the company to go under)

BAA(canadian gold company)- Incredibly risky play, but if gold ever goes back past $1200 I think it will be worth a lot. They have huge reserves, but as of right now they are having trouble with cash flow hence the very low share value--could potentially go under.

I think long term commodities will be worth more, but short term no. Expecting to see a lot of volatility and to finish the year flat or a little in the red possibly. I've been watching TSLA, AAPL, and NFLX for trading some options contracts, but due to school never got around to it sadly as if I had bought some TSLA puts expiring this friday like I had planned 2 weeks ago I could have turned a $500 position into $6,000 assuming the spreads weren't bad when I bought/sold. But such is life and why I am going to school to earn a stable paycheck.

Also, just a tip. IPOs are incredibly hard to make money on. If there is a lot of hype expect to pay 25%+ what the initial "offering" price is and a lot of them fizzle for 6+ months making all investors nervous and many sell for a loss. It takes a lot of intestinal fortitude(or risk tolerance) to hold when you lose 50% value on a trade like that. But some will shine like GPRO and FB which both if I recall correctly had some big upswings and downswings.

 

[polaris dude]

My mutual fund with E Jones is AMECX and has so far been a good investment for me. I want to start building a diverse portfolio to cover my assists in the event of something. I agree with the Disney stock being spread out over multiple industries, I like that. IBM is a little pricey for me just starting out, I'd have to put all my eggs in one basket. I like the idea of dividend reinvestment plan. Several companies offers this within the DOW correct?


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Gonna double post cuz I'm too lazy to edit the other one.

To answer your question depending on your age Diversification is a great thing. It protects you from all but a 2008 type scenario which happens very rarely. It is hard to grow the principle though if your looking to build a retirement(as a young 20-30 year old). If I recall correctly I believe you can do this for any company that is on the DOW w/ a dividend, you just have to set it up on your TDAmeritrade account.

Also, just keep an eye on fees for certain funds as some cost a tad too much for my tastes. If you want you could also buy ETFs such as SPY.

 

[slednutz]

I am an accountant and would only DRIP within tax sheltered accounts, in a taxable account it will adjust your cost basis and makes Tax Loss Harvesting more difficult.

 

[Jeva]

Here is a website I do some research on www.seekingalpha.com. Which led me to read about a contributor named chowder who came up with the "Chowder Rule" for dividend growth investing, read about it here. http://seekingalpha.com/article/1967371-the-chowder-rule-shows-the-best-dividend-growth-stocks-of-the-dow-jones-industrials

He also has a blog that shows a roth ira he runs for his 31 yr old son. www.project3million.blogspot.com I wont be anywhere near what his kid will have but its the principles that I follow.

Also try to max out your roth ira if you can $5500 a year if your in the right tax bracket. This will be tax free savings when you retire.

 

[Phizzer]

Good information you guys. I consider myself to be a young investor (30) and am trying to spread out my investments for retirement. I did exactly what your doing, went to school to earn a steady paycheck (Engineering) and want my money to go as far as possible. The interest rate at banks are terrible. Eventually I want to start getting into property investment, which is what sparked this interest in making more money on my money.

So if I'm reading this right, sheltered drips are considered a non taxable income?


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[Phizzer]

Do you pay capital gains tax on that dividend payout??

My Roth is already maxed out for the year. I was told by my advisor that once I break the 100k mark, that a traditional IRA would be the better investment for tax purposes. I'm definitely going to look around on that website and see what they have to say. I'm going to make my first trade here shortly and have yet to make a decision on who. You guys are definitely helping a guy out though!


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[slednutz]

you have two rate structures for dividends ordinary and qualified, ordinary dividends are taxed at your ordinary income tax rate and qualified dividends are taxed at the capital gains rate.

 

[slednutz]

You can make the argument either way for Roth/Traditional IRA's, if you see yourself in a high tax bracket when you retire you will want to max out as much ROTH space as possible.

 

[polaris dude]

I am an accountant and would only DRIP within tax sheltered accounts, in a taxable account it will adjust your cost basis and makes Tax Loss Harvesting more difficult.

It isn't a big deal for me. My account is pretty small, but I will remember that when I get outta college and start putting serious money away.

 

[Phizzer]

Looks like Walmart is taking a leap to improve their E Commerce sector of business in order to compete with places like Amazon... They had nearly a $6 dollar drop in their stock price yesterday after the big announcement. They are expecting by 2018 that the company will start to rise again after their renovation of online retail sales. I think this could be a good long term investment with the size of the company. I am going to see what happens with WMT over the next day or two and make a PO on Monday.