sharebuilder.com
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From: MD
sharebuilder.com
I asked for some investing advice from one of my bosses (hes a CIO of a national bank)
told me I should try www.sharebuilder.com... said he will pay for my first 3 months of fees if I write a detailed report of my experience.
I was just going to invest 5-10K.
Anyone have any experience with this website?
told me I should try www.sharebuilder.com... said he will pay for my first 3 months of fees if I write a detailed report of my experience.
I was just going to invest 5-10K.
Anyone have any experience with this website?
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Joined: Oct 2000
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From: Toronto, Canada
I have no experience with it but it's an (expensive) online brokerage house which allows you to build a basket of stocks you buy incrementally in instalments.
Not my cup of tea because the principle behind it is a losing strategy. IMHO you are far better off investing with a normal low-priced online broker and making your investment decisions based on value rather than robotic-ally buying stocks regardless of price or value.
The winning strategy is to buy stocks on the way down and sell them on the way up. This type of system is designed to average out price variances over a long period of time with the assumption that given enough time all stocks will appreciate in value.
It's catalog shopping. You will get far better returns by timing trades to buy at a discount and sell at a premium.
Not my cup of tea because the principle behind it is a losing strategy. IMHO you are far better off investing with a normal low-priced online broker and making your investment decisions based on value rather than robotic-ally buying stocks regardless of price or value.
The winning strategy is to buy stocks on the way down and sell them on the way up. This type of system is designed to average out price variances over a long period of time with the assumption that given enough time all stocks will appreciate in value.
It's catalog shopping. You will get far better returns by timing trades to buy at a discount and sell at a premium.
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From: MD
great, now I dont know what to do.
your posts is what got me excited to online invest (I sit in hotel rooms doing nothing, figured this would give me something productive and exciting to do)
your posts is what got me excited to online invest (I sit in hotel rooms doing nothing, figured this would give me something productive and exciting to do)
Thread Starter
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Joined: Feb 2005
Posts: 8,953
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From: MD
I have the capability to be online almost all the time. I have sprint broadband on my laptop, and a blackberry with me all the time.
I want to capitalize from that. I travel, but dont to a damn thing when I get to where im going
I figured if I start pumping money into this Id start learning (wanting to learn) and start rapidly day trading as a hobby.
I want to capitalize from that. I travel, but dont to a damn thing when I get to where im going
I figured if I start pumping money into this Id start learning (wanting to learn) and start rapidly day trading as a hobby.
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Joined: Oct 2000
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From: Toronto, Canada
Same thing I tell most people. Open a brokerage account with low commissions, put money in it and pickup a diversified basket of high quality stocks on discount. With 5-10K to invest you can't have a big portfolio. I suggest tech and aerospace or agriculture.
Put $3000 in a good tech stock like CSCO, AAPL, RIMM or HPQ and $3000 into BA or AG or POT or DE or CAT or PCP or the list goes on. Stay out of financials of all sorts and housing and domestic retail. Hang on to those for a while rather than trade them.
Keep the other $4000 in cash to use as dry powder for short-term trades like the EMC one I discussed the other day. Quick in and out to take advantage of immediate opportunities. If you open a margin account (and you should) then you can take 3 positions in three stocks worth $3000 each. For example:
23 shares of AAPL @ ~$128
25 shares of DE @ ~$120
35 shares of FCX @ ~$90
That's most of your $10K right there and you can use your margin to make shorter opportunistic trades. Keep transferring cash into the account as you earn it. You should be making about 4.8% or 5.0% (overnight money market rate) on your cash so you are doing just as well by keeping it there in cash as putting it in a money market account.
When you get about $3-4K in cash saved up pick up another stock for your portfolio. Rince and repeat.
You can wrap the account in an IRA but not a margin account. I'd rather open 2 accounts, one a margin account and one an IRA account and then transfer profits or positions to the IRA when you want to. Interest you pay on margin is tax deductible and there is no limit to the amount of money you can deposit to the account (unlike an IRA).
People have said good things about Zecco, you might want to look them up.
Over time you'll trim positions which are making money. For example, if your AAPL goes up 25% you should sell 25% or 5 shares @ $160 for a profit of $800, leaving you with 18 shares worth $2880, about what you started with. When it gets to $200 (25% more) sell 25% or 4 shares for a profit of $800, leaving you with 14 shares worth $2800, about what you started with. When it gets to $250 (25% more) sell 25% or 3 shares for a profit of $750, leaving you with 11 shares worth $2750, about what you started with. See the pattern? Do this until you have one share left worth ~$2800 (you'll never get there as the stock will keep splitting as it increases in value over time).
You'll need to review your investment regularly, not daily but at least every month, to make sure the fundamentals of the companies and the sectors they are in are intact. Sell your dogs, don't hope they will do better someday. Ignore noise like we are going through right now. This month is just a speed bump and you'll encounter many.
If you have stocks which pay nice dividends then they aren't going to grow the same way the stocks above will but they will shed income quarterly in the form of cash. It doesn't amount to a hill of beans in most cases which is why I prefer growth stocks over value stocks but I relish the extra risk involved. If you are older 50+ you'll need to make more conservative investments in dividend paying value stocks where the risk of capital loss is much less (nobody eats a hen that's laying eggs everyday).
That's generally it. Sell as the stocks go up, cut the dead weight, build your portfolio not by buying more of the same stock at ever increasing prices but by adding new opportunities to the portfolio with the profits you're earning and your regular cash contribution. You should end up with 6-10 stocks in all and you'll gradually increase the size of each position as you prune dead branches. Start with $3000 each then $3500 then $4000 etc.
Think of your portfolio as a sustainable vegetable garden. Plant a wide variety of sustainable plants. Prune them back when they grow, replace them when they die. Don't plant all of the same crop lest your garden gets wiped out. Plant crops which bear fruit at different times so you can eat everyday. Stick to what you know grows well. Use the best seed. Keep a small experimental patch for exotic fruit to keep things interesting. Expand your garden a little at a time while keeping it under control. Simple.
Put $3000 in a good tech stock like CSCO, AAPL, RIMM or HPQ and $3000 into BA or AG or POT or DE or CAT or PCP or the list goes on. Stay out of financials of all sorts and housing and domestic retail. Hang on to those for a while rather than trade them.
Keep the other $4000 in cash to use as dry powder for short-term trades like the EMC one I discussed the other day. Quick in and out to take advantage of immediate opportunities. If you open a margin account (and you should) then you can take 3 positions in three stocks worth $3000 each. For example:
23 shares of AAPL @ ~$128
25 shares of DE @ ~$120
35 shares of FCX @ ~$90
That's most of your $10K right there and you can use your margin to make shorter opportunistic trades. Keep transferring cash into the account as you earn it. You should be making about 4.8% or 5.0% (overnight money market rate) on your cash so you are doing just as well by keeping it there in cash as putting it in a money market account.
When you get about $3-4K in cash saved up pick up another stock for your portfolio. Rince and repeat.
You can wrap the account in an IRA but not a margin account. I'd rather open 2 accounts, one a margin account and one an IRA account and then transfer profits or positions to the IRA when you want to. Interest you pay on margin is tax deductible and there is no limit to the amount of money you can deposit to the account (unlike an IRA).
People have said good things about Zecco, you might want to look them up.
Over time you'll trim positions which are making money. For example, if your AAPL goes up 25% you should sell 25% or 5 shares @ $160 for a profit of $800, leaving you with 18 shares worth $2880, about what you started with. When it gets to $200 (25% more) sell 25% or 4 shares for a profit of $800, leaving you with 14 shares worth $2800, about what you started with. When it gets to $250 (25% more) sell 25% or 3 shares for a profit of $750, leaving you with 11 shares worth $2750, about what you started with. See the pattern? Do this until you have one share left worth ~$2800 (you'll never get there as the stock will keep splitting as it increases in value over time).
You'll need to review your investment regularly, not daily but at least every month, to make sure the fundamentals of the companies and the sectors they are in are intact. Sell your dogs, don't hope they will do better someday. Ignore noise like we are going through right now. This month is just a speed bump and you'll encounter many.
If you have stocks which pay nice dividends then they aren't going to grow the same way the stocks above will but they will shed income quarterly in the form of cash. It doesn't amount to a hill of beans in most cases which is why I prefer growth stocks over value stocks but I relish the extra risk involved. If you are older 50+ you'll need to make more conservative investments in dividend paying value stocks where the risk of capital loss is much less (nobody eats a hen that's laying eggs everyday).
That's generally it. Sell as the stocks go up, cut the dead weight, build your portfolio not by buying more of the same stock at ever increasing prices but by adding new opportunities to the portfolio with the profits you're earning and your regular cash contribution. You should end up with 6-10 stocks in all and you'll gradually increase the size of each position as you prune dead branches. Start with $3000 each then $3500 then $4000 etc.
Think of your portfolio as a sustainable vegetable garden. Plant a wide variety of sustainable plants. Prune them back when they grow, replace them when they die. Don't plant all of the same crop lest your garden gets wiped out. Plant crops which bear fruit at different times so you can eat everyday. Stick to what you know grows well. Use the best seed. Keep a small experimental patch for exotic fruit to keep things interesting. Expand your garden a little at a time while keeping it under control. Simple.
Administrator
Joined: Oct 2000
Posts: 20,274
Likes: 4
From: Toronto, Canada
Day traders rarely make money, most wash out having lost most if not everything they started with. The make riskier and less likely trades to make up for a endless string of losses and it's over.
You have to not think of it as gambling for entertainment. If you do you will surely lose money and being a loser sucks. Investing successfully takes discipline and a lot of research. If you get swept up in the "game" you'll make bad decisions.
You have to not think of it as gambling for entertainment. If you do you will surely lose money and being a loser sucks. Investing successfully takes discipline and a lot of research. If you get swept up in the "game" you'll make bad decisions.
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Joined: Sep 2002
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Good thing I searched...
I began looking into this the other day... I'm not sure if this is the route I want to go, but for someone who only has a few hundred to start in the market (seperate from 401k), this seemed to be an interesting and somewhat low-cost way to enter the market.
Anyone else have experience with this?
I began looking into this the other day... I'm not sure if this is the route I want to go, but for someone who only has a few hundred to start in the market (seperate from 401k), this seemed to be an interesting and somewhat low-cost way to enter the market.
Anyone else have experience with this?
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