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How to trade stocks online for beginners?

HELP - E*Trade Stocks Question?

  • I am having a hard time determining what will be the best way to handle my e-trade stocks. For the last 2 1/2 years, I have been putting anywhere between $150 - $400 a month away in my ETrade account by purchasing stocks. I purchase stocks for products that I utilize on a daily basis, like Time Warner Cable (TWX) and Starbucks (SBUX) *Based on Jim Cramers Advice*. I have built up a portfolio of about $6,500, and my stocks are up around 5% overall. I am trying to do this as a very long term investment of my money...meaning I plan on doing this for the next 20 years (God Willing). I guess my real question is, am I better off just staying the path, and continuing to purchase stocks monthly, or should I actively sell the stocks that are making me money, and try to reinvest the money into other stocks that may be underperforming. My concern is that if I stay the course, I may just be investing money into companies that will not be around in another 20 years, so my portfolio might grow stagnant. In addition to this fact, I think that it should be noted that ETrade charges me $9.99 for every stock purchase, as well as every sale of my currently owned stocks. I basically feel like if I was going to sell any of my current stocks, they would have to be earning me well over the $19.98 it cost me in commissions. As you can see, there are quite a few factors at work here, and the easy thing to do would be to just stay the course, and sell them off as I need the money down the road, but I am not sure that would be the wise thing to do over a long period of time.

  • Answer:

    You are in general following exactly the path I have followed for many many years. Keep it up. Buying and selling is going to generate ETade lots of money but most likely not you. I too buy stocks in things that I use--KO, MCD, PG, INT, CVX, BDX and others. I don't do it every month though. I do it mostly when I think they are bargains. Not buying too much just now. Just accumulating cash in my account for when the opportunity arises. I have my fingers crossed hoping that Greece defaults. That might present a good buying opportunity. .

Nostrada... at Yahoo! Answers Visit the source

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Obviously your in-and-out trades have to profit you more than the commissions, otherwise you lose money. Each capital gain also means a tax. I'm suspicious of anyone who says they can tell you the best strategy. If they knew, they would be so rich they wouldn't be in the advice business.

Zyzzyx

Congratulations on your determination & ability to follow your goals. Too bad you didn't read any books on investing. You have a plan that's based on some good ideas.... but you mention nothing about "risk control" which is the most important aspect of investing like you are. You follow Jim Cramer's ideas... but they change... and you'll generally have no clue about that..... besides as good as Cramer is.... following his ideas will give you poor results..... not because Cramer is bad.... you're just not following any asset allocation or risk control strategy. Spending $9.99 for relatively small amounts to invest is totally self defeating. A round trip costs you $19.98... that's 5% just on commissions for a round trip!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!… That's ridiculous. Until you have larger amounts to invest monthly you should buy no load, low fee Mutual Funds or start a DRIP program directly with some companies that offer free or low fee DRIP plans. You really need to educate yourself. Start by reading some basic books like; Investing For Dummies Mutual Fund Investing For Dummies Stock Investing For Dummies When you finish these three books.... pick up some more on the area that best suits you. BTW: Closing out winning stocks to invest in losing stocks is a pure amateur play.... and totally a terrible way to invest.

Common Sense

Buying a company's stock because you use their product is NOT a good strategy overall. If you really want to invest in something that can give you big returns a few years from now, look at shipping stocks. They are really the only sector that hasn't had a big rally since 2009. Some of these stocks even pay a dividend....DHT would be a prime example. Not sure if all of these pay dividends but here are a few others: DSX, GNK, EXM, DRYS and FREE (risky one there).

sunsolutions02

Of course you are right, at some point you have to sell your positions in order to realize a profit (or a loss). When you decide to do that is completely up to you. You are right about Etrade though their commissions are very high other online brokers charge much less. I use Realfasttrader, they only charge .0039 per share with a $.99 minimum per trade, that is the lowest rate I have found for a broker.When you use a cheaper broker like that, then you can lower your cost of doing business significantly.

bigtimehotshot

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