The Active Stock Market Trader, or Traders of Other (Crypto ect.) Market's Thing's Thread.

[Liquid]

I don't actually know how to buy stock but it is something I would be mildly curious to try. I'm happy to spaff away, let's say... €50. Just see where it goes.

How do you invest this money in shares for a listed company?
How do you keep track of it?
How do you get your money back when you want to 'cash out'?

 

[Chrunch Houston]

I don't actually know how to buy stock but it is something I would be mildly curious to try. I'm happy to spaff away, let's say... €50. Just see where it goes.

How do you invest this money in shares for a listed company?
How do you keep track of it?
How do you get your money back when you want to 'cash out'?

1. Open an investment account. Not sure what brokerage firms are available in Antarctica, but here in the US we have several options, like E-trade, Fidelity, or apps like Robinhood. Look for one that offers commision free trades.

2. Once you have created your account you will need to fund it. I use Fidelity, and there is a transfer tab. It will ask you for your bank's routing number and your account number and the amount of money you want to add to your trading account. It may take a couple of days for the money to be transfered.

3. Once your account is funded you buy the stocks using the stock symbol.

There are many ways to trade but the two most basic are market orders and limit orders.

A market order is executed right away at whatever the selling price is at that time.

With a limit order, you set the price you are willing to pay for the stock. The order is executed when the selling price of the stock matches your price. Let's say you want to buy Unilever (UL). The price is at $53 a share, but you want to buy it at $50. You would place your limit order at $50 and it will stay in place until you cancel it* or until the UL price drops to $50, at which point your order would be executed.

Your brokerage firm will keep track of everything you own. It will also deposit dividends into your trading account if you own stocks that pay them.

To cash out, sell your stock and transfer the money from your trading account back into your bank account.

*I think at some point it may expire.

 

[CodeRedR51]

I just bought some stock for the first time as well yesterday. Signed up on Robinhood using a referral link from a co-worker. When it was announced that Rocket Lab was going public I decided now would probably be a good time to jump in and go for it. Just bought a couple shares in VACQ which should convert to RKLB when it goes public. At that time I'll decide if I want to get in for more.

 

[Eunos_Cosmo]

I just bought some stock for the first time as well yesterday. Signed up on Robinhood using a referral link from a co-worker. When it was announced that Rocket Lab was going public I decided now would probably be a good time to jump in and go for it. Just bought a couple shares in VACQ which should convert to RKLB when it goes public. At that time I'll decide if I want to get in for more.

Based on my experience with CCIV, you don't want to be carrying the bag when the deal is officially done. I initially bought CCIV at I believe $30/share and it went up to as high as $64/share before the Lucid deal was actually announced. It's at $26 now so buyer beware on these deals (luckily this time I tried the whole "buy the rumor sell the news" thing and sold at $60 and used the proceeds to buy a lot more after it fell to $35/share. I'm still up on it overall and I'm in Lucid for the long haul, but that could have been some serious bleeding).

In related news, you can now buy shares of an ETF that tracks social media sentiment. It basically indexes wall street bets and packages it into a convenient ETF. Isn't that great news for a healthy market?

 

[ROAD_DOGG33J]

Not sure how well that wtf will work or if it can work as intended. They mentioned it reindexes monthly, which seems a bit slow to be able to keep up.

 

[ROAD_DOGG33J]

Good article about what happened with Gamestop and why stock pricing may not be based on a company's performance

https://www.forbes.com/sites/george...o-with-the-madness-of-crowds/?sh=1fa0ff325d0b

 

[Sprite]

Does anyone here do FOREX trading? It's one I'm really interested in. Just wanted to know if anyone has had first hand experience?

 

[Eunos_Cosmo]

I'm really tempted to buy some options in tech stocks as this new round of stimulus rolls in...

 

[MatskiMonk]

Does anyone here do FOREX trading? It's one I'm really interested in. Just wanted to know if anyone has had first hand experience?

No is the short answer. But I've wanted to in the past. I've signed up for virtual trading accounts in the past and I did quite well (virtually) from it... however, I couldn't grasp the mechanisms behind trading on margin/with leverage. It seems more relevant with FX to fully understand the risks with this since the movements in currency can be quite small and getting the leverage appeals more.

The conclusion I came to was that if I had £1000 to invest (for ease of numbers), and had a platform offering 10:1 leverage, then I should only invest £100, since in a worst case scenario it still means I can cover the losses. I've no idea if that's correct though, hence I've never dumped any proper money into it despite it seeming like easy money with a virtual portfolio.

 

[Biggles]

Revisiting this topic a year after the big crash in the market (actually about 10 days prior to the low point), it seems clear that my decision to pull out of the market a couple of days after the bounce up from the bottom was a very expensive mistake. The consensus on this forum was that the market would collapse again at some point ... but it hasn't so far & continues to climb higher & higher, so that it is now significantly above where it was at the peak in February 2020, & that's just taking the DOW or the S&P, not the NASDAQ, which is up WAY higher.

Is there any real expectation that there will be a major correction soon? With the latest stimulus measures in the US, it doesn't seem likely. There also isn't much indication of any immediate rise in inflation. It's like we're living with a different set of rules than in the past.

 

[Danoff]

Revisiting this topic a year after the big crash in the market (actually about 10 days prior to the low point), it seems clear that my decision to pull out of the market a couple of days after the bounce up from the bottom was a very expensive mistake. The consensus on this forum was that the market would collapse again at some point ... but it hasn't so far & continues to climb higher & higher, so that it is now significantly above where it was at the peak in February 2020, & that's just taking the DOW or the S&P, not the NASDAQ, which is up WAY higher.

Is there any real expectation that there will be a major correction soon? With the latest stimulus measures in the US, it doesn't seem likely. There also isn't much indication of any immediate rise in inflation. It's like we're living with a different set of rules than in the past.

You're so focused on the end result of whether you made more or less money from any given strategy. You once again ignore the fact that you needed the US election to go the way it did (and other things to fall right) to turn out to have made a "mistake". You took less risk, and you didn't participate in what, honestly, looks like gambling right now. You can call that a mistake if you like, but I call it sensible.

Inflation does seem to be likely in the future, and it seems to be playing a factor in the elevated stock market. Not only has the stock market divorce from reality caused me to hold back, it has changed my entire wealth management strategy going forward.

 

[Biggles]

You're so focused on the end result of whether you made more or less money from any given strategy. You once again ignore the fact that you needed the US election to go the way it did (and other things to fall right) to turn out to have made a "mistake". You took less risk, and you didn't participate in what, honestly, looks like gambling right now. You can call that a mistake if you like, but I call it sensible.

Inflation does seem to be likely in the future, and it seems to be playing a factor in the elevated stock market. Not only has the stock market divorce from reality caused me to hold back, it has changed my entire wealth management strategy going forward.

No, I don't think that's entirely correct. The "mistake" was in trying to time the market - in thinking that I could know what was going to happen. In this case I was thinking that there would be a "double dip" due to the pandemic. That's looking less & less likely ... or, at least, a correction is certain to come at some point, but the market may have gone up so much by then that any correction becomes largely irrelevant.

Based on my experience I would say sticking with a strategy that reflects the reality that more wealth is continually being created and so LONG TERM staying invested makes sense. "It's time in the market, not timing the market" being the traditional catch-phrase. That's not really gambling - it's actually pretty boring as you're not likely to realize dramatic Gamestop or Tesla returns, but you're also not likely to see big losses.

As far as the larger wealth management strategy is concerned, the pandemic has had an extraordinary effect on real estate prices. My home has gone up in value by (conservatively) $300,000 in the past year & proportionately that's pretty representative of everywhere in the Greater Toronto Area, with the exception of condo units. We were thinking of downsizing soon. Deciding when to do that - or in fact, whether to do it at all - becomes somewhat like trying to decide when to buy into, or sell out of the stock market.

I'd like to drop in this other tidbit:

https://www.cbc.ca/news/business/nft-sale-beeple-christie-s-non-fungible-token-1.5945737

Digital artwork - which has no physical existence - is purchased for $69 million.

 

[Eunos_Cosmo]

The market has been feeding on stimulus to the point where I believe that the biggest enemy of continued stock market growth is an actual, broad economic recovery because that will mean no more stimulus. I think a big correction is likely, but not before this next round of stimulus is fully unloaded. People are not going to be spending those stimulus checks on crap they don't need if they don't genuinely need the money to get by. I don't need that money, but I'm getting some. Of course I'm going to invest it. I'm guessing there are millions like me in that regard. Watch for Tesla, Amazon, Nio, Netflix to shoot off like a rocket again as soon as the stimulus money gets into pockets.

 

[Danoff]

No, I don't think that's entirely correct. The "mistake" was in trying to time the market - in thinking that I could know what was going to happen.

Certainly if you thought you knew what was going to happen it's a mistake. But we all knew that the US market was at huge risk during 2020, and it's great that Biden won and the economy stayed afloat through the year, but that was absolutely not guaranteed. Whatever you took out sat aside during one of the most risky time to be in stocks in... well I don't know what would have been riskier than 2020.

Identifying that risk wasn't trying to know the future, it was knowing the present. 2020 was straight up risky, no question. And it was known at the time.

 

[Danoff]

Just had a detailed conversation with my investment broker about 2020. I asked him "what gives" about the market valuing companies higher after the pandemic than before despite posting huge losses. He gave me a less than satisfactory (but still very intelligent sounding) answer that basically trotted out Amazon (though not by name). Namely, that large companies are doing at least as well as before by being able to weather the storm of the pandemic and emerging into a better position with fewer competitors. This works for Amazon, and maybe other big box sellers like costco. It doesn't work up and down the market though, for tons of companies for whom 2020 was absolutely not a good year. And I do not believe for a second that it influenced people in terms of their investments. In May last year, people were not thinking "gee, this company should be worth more because the pandemic is going to make them stronger". They were thinking "gee, dollars seem like a bad idea given what the government is going to need to do". The same thing fueled real-estate.

My broker did not convince me to increase my market exposure. That being said, I'm not eliminating it either.

 

[Keef]

Tell you what buddy, next time a dip like that comes along I should have an airline salary coming in and still live in a one-bedroom by myself so you bet your ass I'm gonna get some tendies. Hot garlic.

Anyways, I figured after recent news it was a good time to throw a few bucks toward Lucid and Canoo. Waiting patiently on that Rivian IPO because that going is seriously going places. Zero dollars in any legacy automotive company because frankly they're dinosaurs. People have been saying "they're gonna catch up, they're gonna catch up!" but I don't see it happening anytime soon. We're in an automotive revolution right now and five years from now Lucid and Rivian especially, among others, will be established in the market. I'm here for it.

 

[Eunos_Cosmo]

Just had a detailed conversation with my investment broker about 2020. I asked him "what gives" about the market valuing companies higher after the pandemic than before despite posting huge losses. He gave me a less than satisfactory (but still very intelligent sounding) answer that basically trotted out Amazon (though not by name). Namely, that large companies are doing at least as well as before by being able to weather the storm of the pandemic and emerging into a better position with fewer competitors. This works for Amazon, and maybe other big box sellers like costco. It doesn't work up and down the market though, for tons of companies for whom 2020 was absolutely not a good year. And I do not believe for a second that it influenced people in terms of their investments. In May last year, people were not thinking "gee, this company should be worth more because the pandemic is going to make them stronger". They were thinking "gee, dollars seem like a bad idea given what the government is going to need to do". The same thing fueled real-estate.

My broker did not convince me to increase my market exposure. That being said, I'm not eliminating it either.

I think the biggest answer is honestly...what else are you going to use your money for? Housing/real estate exists of course, but that is also incredibly inflated. There is no alternative.

Tell you what buddy, next time a dip like that comes along I should have an airline salary coming in and still live in a one-bedroom by myself so you bet your ass I'm gonna get some tendies. Hot garlic.

Anyways, I figured after recent news it was a good time to throw a few bucks toward Lucid and Canoo. Waiting patiently on that Rivian IPO because that going is seriously going places. Zero dollars in any legacy automotive company because frankly they're dinosaurs. People have been saying "they're gonna catch up, they're gonna catch up!" but I don't see it happening anytime soon. We're in an automotive revolution right now and five years from now Lucid and Rivian especially, among others, will be established in the market. I'm here for it.

I wouldn't count out Ford, GM, Hyundai/Kia, nor VW just yet. While they're not as exciting as Lucid, Rivian, or Canoo (don't get me wrong, I'm already invested in Lucid, and I will certainly back Rivian) they know how to make cars and they're all dead serious on electric cars. Japanese car manufacturers are starting to look left behind though. I'm confident that Lucid will build a quality product, but that's because they have quite a few industry experts in their company. But Ford's Mach E is absolutely good enough to compete with Tesla even if it's not as good as Tesla (though I argue it looks better). Anyways, this is getting off topic.

 

[Danoff]

I think the biggest answer is honestly...what else are you going to use your money for? Housing/real estate exists of course, but that is also incredibly inflated. There is no alternative.

Storing wealth safely for later is a major motivator and a very difficult thing to do. I guess one of the things that I'm struggling with is this notion that the pandemic was a great buying opportunity. I'd say, all things being equal, that might have been true (although I'd have gotten the timing wrong if I attempted that because people bought back in far sooner than I'd have anticipated based on... well no good news at all). The thing that bugs me was that in 2020, for the second time in its history, the US kinda wobbled. Not due to the pandemic, but due to Trump. We had a real look at what it looks like for the nation to collapse, and the idea that we should have just assumed that Biden would win, and that democracy would continue, and see the pandemic as a value play really bugs me. Trump could have won... he didn't, but it was possible. And if he had, I'd be having some serious questions about how to get away from a cratering nation. Staying bullish on the stock market while the US constitution goes up in flames doesn't strike me as smart. The plays I did make were careful. I closed on a real estate transaction after Nov. 5, and that was not an accident.

I'm glad I didn't pull out of the market completely, I still had some money riding on Biden, but I was absolutely not sure that the country was stable. Not by a long shot, I think the capitol riots kinda underscored that point.

Tell you what buddy, next time a dip like that comes along I should have an airline salary coming in and still live in a one-bedroom by myself so you bet your ass I'm gonna get some tendies. Hot garlic.

Anyways, I figured after recent news it was a good time to throw a few bucks toward Lucid and Canoo. Waiting patiently on that Rivian IPO because that going is seriously going places. Zero dollars in any legacy automotive company because frankly they're dinosaurs. People have been saying "they're gonna catch up, they're gonna catch up!" but I don't see it happening anytime soon. We're in an automotive revolution right now and five years from now Lucid and Rivian especially, among others, will be established in the market. I'm here for it.

Picking companies (especially from the outside, but even from the inside) is even harder than predicting broad sectors of the market. I'm fairly sure have almost no idea how Lucid, Canoo, and Rivian are run. Now, to a certain extent their stock price is divorced from how they're run, because it's just based on how people like yourself speculate, but that shouldn't give a warm fuzzy, because those speculations are fickle. Picking corporate winners is not an easy task. If you were presented with all of the internal books, you might realize just how difficult a task it really is, and I think you'd still struggle to successfully pick a winner. You can try to approximate that by listening in on quarterly earnings calls and gobbling up press releases, but it pales in comparison to the data they have internally, and is sometimes intentionally misleading. It's not just the data either, it's the management plan. You'd need to be very involved to understand whether their management plans were based on sound footing.

 

[Keef]

@Danoff You're right I don't know much about their management plans but I do know a little about their previous testing plans and products because I was exposed to them in college. That was maybe 2015 or 2016, a long time ago, and they already had a fully operational and very competent car on their hands. I saw it tested, I spoke to some of their engineers. So I'm not sure what their management plan is, but I know their management plan factored in a very long and thorough testing process, rather than rushing a product to market. If management is that patient and determined to wait for an excellent product then it bodes well for the entire company's culture and longevity. I'm pretty confident their first car will not only meet expectations but will actually be impressively higher quality than even a Model S. A similarly thorough system can be seen from Rivian over the past probably five or more years.

That said, Tesla has been fraught with drama and it's really hard to quantify how much of that drama and/or Musk's character influences that company's stock price. That shouldn't be discounted. Lucid and Rivian may have top-tier products on their hands but thusfar the companies are relatively boring. At least they did some cool things like high speed tests and an overland TV show.

 

[Danoff]

I'm betting hard right now on inflation. It could be a bad play in the short run, especially if Trump stays in the whitehouse (though my economic outlook might be the least of the concerns there). If Biden takes office and a COVID vaccine comes around, I think inflation is going to be quite noticeable. At least that's what my financial outlook is based on. The reason for this is that cash reserves that people are hoarding will get loosened up as people realize the sky is not falling. If Trump continues, cash hoarding might increase.

Overall, inflation is set to benefit me economically. On the otherhand, deflation would be very bad for me.

My chips are pretty much set.

This guy is accusing me of "shorting the dollar" with my "hard" bet on inflation last year. I think he's right, that is what I was doing. I extended quite a bit of debt in exchange for real property. Some inflation does seem like a foregone conclusion, and it seems like the government essentially has to maintain this in order to keep its own balance sheets straight. But I don't see hyperinflation happening in the US.

 

[MIE1992]

Eh, I'm not really an "active" trader by any means. My strategy is very conservative, and long-term. Half of my portfolio is in mutual/index funds, a quarter is in ETFs, and the last quarter is in equities. Granted, sometimes I get a bit guilty over my portfolio since most of the money in it was from my parents, but I don't plan to cash out for a good while. Some of my best decisions so far involve picking XAR, VGT, and NTDOY. I don't short anything, and I definitely don't fool around with options.

 

[Chrunch Houston]

I'm wondering if anyone else took advantage of what I once called a black swan event, and bought oil ETFs.

Oil makes the world go round, and no matter how much of a hit it takes in the market, It will always be temporary, oil will be oil again.

My USO fund has done fantastically well.

But there were lots of warnings that I didn't know about, or didn't think about, before I dumped a ton of money into it.

Fidelity (my broker) made me electronically sign some kind of thing stating that I understood that this was super risky before I bought it.

My thinking at the time was, this is oil, oil is cheap now. Really cheap. It won't be cheap forever.

I bought my first shares of this stock just a couple of days before the stock split, or unsplit 8 to 1. That is the S in a black box on the chart.

I will admit I was a little scared when the price of oil dropped to zero.

But what is more scary, is thinking that much of my savings was controlled, not by the market, but by the people who run the fund.

But, they have done a pretty good job.

I still think USO fund is a good buy. I think it will get back up to $100.

Once this black swan event is over.

 

[MIE1992]

delete

 

[Exorcet]

Thanks for the responses, I only started investing in stocks because of Gamestop. Over the past month, I've found myself checking on my stocks way too often. I hoped it would get me ahead of inflation, but it hasn't turned out that way. I've gone from 10% up at the end of June to down 8% right now...and that's before I factor in commission. Moderna, Zoom and BioNTecH are my biggest money pits, but I guess I should remind myself that I'm not a day-trader. Maybe I should stick to the traditional Irish methods of investing: paying some crooked stockbroker a 20% commission on any gains or sticking fivers on dumb accumulator bets.

If you're new to investing and want to minimize risk, costs, and attention focused on current market trends, I'd suggest passive index investing over trying to pick individual stocks.

I don't consider the market for the short term, only for the long term. Short term investing is difficult to get right, but if you simply invest money over the timespan of years, the chance of getting a profit goes up. Historically the rate of return you can expect is 7-10%. Here is short video comparing passive and active investing:



Along with an online calculator I like to use to help me determine how much to invest each month:

Savings Calculator

Free calculator to find out the balance and interest of a savings account while accounting for tax, periodic contributions, compounding frequency.

www.calculator.net

It says savings calculator, but if you put in 7-10% for the rate of return it basically simulates average long term stock returns. I like this calculator primarily because it adjusts for inflation.

 

[ROAD_DOGG33J]

The Buffett indicator sat at a historic high of 179% on Thursday

Same indicator was at 100% and 118%, before the GFC and Dot Com crash, respectively.

I was thinking about this a while back. The article does point out some flaws in the metric, but I think the biggest is that companies have become more global. The metric is most likely not as reliable of an indicator as it has been in the past, as it focuses only on US GDP.

 

[Danoff]

The wealthiest 10% of Americans own a record 89% of all U.S. stocks

The top 1% gained over $6.5 trillion in corporate equities and mutual fund wealth during the pandemic, according to the latest data from the Federal Reserve.

www.cnbc.com

10% of Americans own almost 90% of US stocks. I maintain that it is impossible to properly diversify within the stock market. The entire stock market is beholden to the opinions of a very small group of people, a group of people that may have heavily overlapping opinions.

 

[ROAD_DOGG33J]

The wealthiest 10% of Americans own a record 89% of all U.S. stocks

The top 1% gained over $6.5 trillion in corporate equities and mutual fund wealth during the pandemic, according to the latest data from the Federal Reserve.

www.cnbc.com

10% of Americans own almost 90% of US stocks. I maintain that it is impossible to properly diversify within the stock market. The entire stock market is beholden to the opinions of a very small group of people, a group of people that may have heavily overlapping opinions.

Not sure I get that. One person could own all the stock of all the companies. Ignoring the controlling ownership, does that mean they're not diversified? I would say they are at least as far as the stock market goes.

 

[Danoff]

Not sure I get that. One person could own all the stock of all the companies. Ignoring the controlling ownership, does that mean they're not diversified? I would say they are at least as far as the stock market goes.

If one person owns all of the stock of all of the companies, then they have to find someone to sell it to for it to be worth anything.

If a small group of people is buying 90% of the stock, if that group of people decides to stop buying, the price plummets. It's a small group of people determining that value of all of the stock - and they can change their minds all at once.

 

[Biggles]

The wealthiest 10% of Americans own a record 89% of all U.S. stocks

The top 1% gained over $6.5 trillion in corporate equities and mutual fund wealth during the pandemic, according to the latest data from the Federal Reserve.

www.cnbc.com

10% of Americans own almost 90% of US stocks. I maintain that it is impossible to properly diversify within the stock market. The entire stock market is beholden to the opinions of a very small group of people, a group of people that may have heavily overlapping opinions.

10% of Americans is still a lot of people ... & don't forget there are lots of people (like myself) who are not American who own US stocks. Nevertheless, it's no doubt true that the number of people who have the power to move the market is much, much smaller than 35 million.

If the market was over-valued in February 2020, it would seem to be more over-valued now that it was then. The conventional wisdom says "it's time in the market, not timing the market". If you're a young investor now I would be looking at the long term & not getting too caught up in the short term. My own experiences trying to time the market have not been productive, but he long term trajectory of the market has been solid. Since 1982 the Dow has gone from 800 to over 35,000. Having said that ... there have been long periods when stocks have basically gone sideways: 1915 to 1950 & 1950 to 1982 (with big peaks in the middle).

 

[Danoff]

10% of Americans is still a lot of people ... & don't forget there are lots of people (like myself) who are not American who own US stocks. Nevertheless, it's no doubt true that the number of people who have the power to move the market is much, much smaller than 35 million.

If the market was over-valued in February 2020, it would seem to be more over-valued now that it was then. The conventional wisdom says "it's time in the market, not timing the market". If you're a young investor now I would be looking at the long term & not getting too caught up in the short term. My own experiences trying to time the market have not been productive, but he long term trajectory of the market has been solid. Since 1982 the Dow has gone from 800 to over 35,000. Having said that ... there have been long periods when stocks have basically gone sideways: 1915 to 1950 & 1950 to 1982 (with big peaks in the middle).

I understand that the market has done well over the last century. My point is about diversification. You might think that you can diversify your portfolio by buying different kinds of stocks, or different funds. But in reality, it's largely owned by a small group of people. To your point, it's an even smaller group of people that controls or influences it. You cannot truly diversify your holdings within the stock market, because it is massively influenced by a very narrow and like-minded group.