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Also, in USA (I don't think that's where Sander is, but for others) short-term capital gains are more heavily taxed than long-term (to encourage investment, I guess).
Back when I started investing many years ago, I just looked at the Berkshire Hathaway holdings, found subsets of that I felt comfortable with, then purchased those companies. Figured if it's good enough for Warren Buffett, it oughta be good enough for me.
Just let the dividends plow back into buying more. I think I've done reasonably well over the years. Like Sander, I've only invested extra money, so I don't track returns that closely.
My goal is someday to live on the dividends (i.e., start taking them as cash instead of reinvesting). We'll see.
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agolddog wrote:
My goal is someday to live on the dividends (i.e., start taking them as cash instead of reinvesting). We'll see.
A bit contradictory... don't you think?
To live on the dividends, you need a lot of them, what would imply that you have a lot of money (one only should invest what is not needed for living) so you wouldn't need that for living...
Jokes apart... I know what you mean. I don't expect to do that much. But if I can upgrade the holidays with one or two nice extras, buy something I would like to have but don't need (and hence very low in the list) or similars. Then I am happy enough.
At least I see it that way, one invest money that is not needed for living. And use the potential benefits from it to things that are not needed for living, but that make the living nicer  
M.D.V.
If something has a solution... Why do we have to worry about?. If it has no solution... For what reason do we have to worry about?
Help me to understand what I'm saying, and I'll explain it better to you
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Nelek,
Good point!
Like anything, diligence plays a big key. When I first started out a million years ago (back in the days when I mailed checks to companies to participate in DRIPs), I had a simple plan that seemed to work out pretty well:
Each paycheck, subtract out from my new checking balance my "minimum safety net cash".
Next, subtract out any credit card balances/upcoming bills like auto insurance.
If there's still money left, invest it. I generally split it between extra on my house payment, and investing in these DRIPs.
It wasn't until (too many) years later that I figured out I should designate some of that extra money to a "fun" account--money for trips, going out, whatever.
Anyway, for anyone just setting out, that's a guideline I'd put out there to tailor to your needs.
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I am relative new in this kind of investments (less than a year experience in trading). But I know where my priorities are
M.D.V.
If something has a solution... Why do we have to worry about?. If it has no solution... For what reason do we have to worry about?
Help me to understand what I'm saying, and I'll explain it better to you
Rating helpful answers is nice, but saying thanks can be even nicer.
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Day trading is probably the easiest way to lose all your money. While you may have made a quick profit, the averages are against you. Think of stock investment as long term, minimum 10 years, and you are likely to do better. Unless you have time to research companies in detail it is usually better to go for trusts. I don't know about Holland, but here in the UK we have Investment Trusts and Unit Trusts. Both are good vehicles for long-term investment but you still need to do your own research. There is plenty of information on various investment shop websites: Hargreaves Lansdown[^] is a good one. Even if you don't want to use them to invest, they have lots of useful research and information.
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Richard MacCutchan wrote: While you may have made a quick profit, the averages are against you.
I know!
In fact, I know someone who lost a lot of money (he could afford to lose) that way.
He was sure to remind me when I told him I was going to trade too.
I don't want to do this for the (quick) money, but for the experience.
And hopefully I'll make a profit (or a minimum loss) at the end 
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Richard MacCutchan wrote: it is usually better to go for trusts
Ummm, remember Woodford?
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Yes, I invested in that so lost some money. I also invested in many others which returned a decent profit. Investment is like fortune telling, you can never be certain of the outcome. If you don't like risk then put the money in the bank - at 0.5% interest you are not even keeping up with inflation.
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Richard MacCutchan wrote: at 0.5% interest
How lucky...
Here is 0,15%  for 6 months
0,5% for a year (and not everywhere)
M.D.V. 
If something has a solution... Why do we have to worry about?. If it has no solution... For what reason do we have to worry about?
Help me to understand what I'm saying, and I'll explain it better to you
Rating helpful answers is nice, but saying thanks can be even nicer.
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good luck. have fun with this.
I pay a company to manage my portfolios and accounts, but I sometimes wish I did it myself.
As for actual "day trading", I don't think I have the stomach for that.
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Thanks!
Slacker007 wrote: I pay a company to manage my portfolios and accounts, but I sometimes wish I did it myself.
Why not both?
Take some money you can spare and give it a shot yourself.
Never regret the things you didn't do
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Two tips/notes:
- Stocks go down further and faster than they go up.
- it's not a level playing field at all: large firms can do things you cannot and probably (at best) consider you a donor.
- In reality, it's just a crap-shoot; the worlds biggest gambling casino
Eventually you learn your place in this food chain (and it's not an admirable one, guppy), exuberance is replaced by shock: Then you decide what to do. More of the same or mutual funds.
| Ravings en masse^ |
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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At least I can count to two 
W∴ Balboos, GHB wrote: you learn your place in this food chain (and it's not an admirable one, guppy)
I learned that a long time ago and decided I wanted to go up.
So far so good, I'm not at the absolute bottom anymore (and that's all I can say about that)
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Sander Rossel wrote: So far so good, I'm not at the absolute bottom anymore (and that's all I can say about that)
They're just fattening you up (think Hansel and Gretel, but the witch wins). As for not being at the bottom? Hell - they just want their food delivered.
| Ravings en masse^ |
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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I am not sure what country you are in but in US if you decide to day trade, you need to change your tax filing status to the "Mark to Market trader". Because if you don't you will be limited to maximum 3,000 USD loss per year. Say you loose 6,000 you will have to spread it over two years. MTM status allows you to write off the entire loss.
But I am no tax professional as far as how to change it, I just used to write daytrading software
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If you don't file US taxes, skip this. It has nothing to do with you, and the US tax system is the most labyrinthine PoS you could ever imagine. Far worse than the legacy code of your nightmares.
I don't day trade, but I think I know what's going on here. Somehow day traders are treated differently than regular investors, for whom
- the maximum loss that can be claimed in any year is $3000;
- losses that can't be claimed are carried forward and can be used to offset future gains.
If a day trader can claim the entire loss each year, it's probably treated as a job, with gains being taxed as income, the same as short-term gains. This would make sense, although a day trader would probably get the long-term rate for something held for more than a year. But the strict definition of day trading is being 100% in cash by the end of the day.
I just read an article that buying the S&P at the close and selling it at the open has returned 722% since 1993, whereas buying at the open and selling at the close has lost 14%. This year, however, this strategy (I use the term loosely) has been flipped on its head. But it means that day traders, if following the actual definition of the term, have been underperforming the market to an insane extent for a very long time.
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I'm not in the US.
I don't think I can write off any losses.
It's just money I spent and so will negatively impact my property value.
On the other hand if I do make a profit it'll be taxed like property.
Other than that I'm not sure, but I'm sure I'll find out next year when I have to do my taxes
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See section 6.2 of this[^], specifically the description of Box 3.
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If you're doing it for sh*t and giggles and want to learn about the process, limit yourself to some amount of money you're comfortable losing and roll with that.
But if you're doing this for your pension portfolio, let the professionals do it for you. I pay what seems like a small fortune every year to my bank to do it, but ultimately it pays for itself, and then some. OTOH, right now we're seeing exceptional circumstances, and I've lost quite a bit from the peak where it was in mid-January. But they're managing it for the long haul. Despite the loss, I told them just a week or two ago to go ahead and take a part of what was still sitting in my checking account and invest it, in the hope to catch the rebound. It's already gained back that much since.
Another consideration: Taxes. I hope you either have a good accountant, or you're provided with all the numbers you'll need to do it correctly. Otherwise you'll need to start reading your local tax laws.
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dandy72 wrote: limit yourself to some amount of money you're comfortable losing and roll with that.
Always, even when not doing it for sh*t and giggles 
dandy72 wrote: Another consideration: Taxes.
Hadn't considered that yet.
I think it's all property tax, but I'm not sure.
I can't declare any losses, so it's only fair they shouldn't tax any winnings.
Unfortunately, taxes aren't always fair...
I'll find out when I have to do my taxes next year
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Sander Rossel wrote: I can't declare any losses, so it's only fair they shouldn't tax any winnings.
 I'm not convinced that's how it works.
Sander Rossel wrote: I'll find out when I have to do my taxes next year
Needless to say, at the very least, keep all correspondence between yourself and the service you're using to do those transactions.
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Misread Stocks as Socks was a little confused!  This isolation isn't good for me!
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The sock trading business has been booming!
Sport socks, ankle socks, knee high socks, especially thigh high socks are in demand!
Socks with funny patterns fetch a good price as well.
Just make sure your socks are not too slippery, if someone slips and hurts themselves you could lose all your profits just like that!
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You're not alone. I read "Spocks".  Must have Vulcan on my mind. 
Get me coffee and no one gets hurt!
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Welcome to the world of investing! Invest wisely and beware of "hot stock tips". Dollar (use your local currency) cost averaging and mechanical, unemotional investing can reap rewards. Ping me directly if you want to discuss investment strategies. Would be happy to share my successes (and many failures!).
/ravi
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