I have never dealt with buying single stocks. I've always invested in managed mutual funds in the past.

Does anyone else dabble in buying single stocks? Does it often pay off? Whats the easiest way to go about it? What are some of the pro/cons come tax time?


/investingn00b

3/29/2010 10:17:00 AM

If you just want to fuck around with some throw-away money and speculate on a couple stocks, there's nothing wrong with that. But if you want to invest big money, I'd just stick to mutual or index funds that are already diversified.

[Edited on March 29, 2010 at 10:53 AM. Reason : .]

3/29/2010 10:51:31 AM

^^

as with anything else, you need to be willing to spend the requisite time doing research if you want to make any money. I win some and I lose some, but I win a lot more often than I lose. I trade individual stocks both with extra money I have (well until about a couple of months ago when I cashed out), and within my 401(k).

You are unlikely to make untold riches unless you happen to get extremely lucky, and buy a lot of AAPL in 2002.

Taxes can be painful. If you buy 1000 shares of a stock, and then sell 250 a few months later, then buy another 500, and then sell another subset of shares, calculating your cost basis and profit/loss can get tricky. Especially if you spread it out over a long period of time where some of it is subject to short term capital gains and some is subject to long term capital gains.

If you trade in a taxed advantaged account such as a 401(k) you don't have to worry about it at all.

3/29/2010 10:56:48 AM

Yeah, I think the tax situation is what is really putting me off.

3/29/2010 11:02:45 AM

Start with ETFs
Move on to indivudual stocks

3/29/2010 11:02:56 AM

^ is there any tips around this? or do they calculate based on FIFO

also do I have to worry about calculating/filing tax for yearly stock gains/losses if i'm trading within my IRAs if I'm not withdrawing?

3/29/2010 11:04:53 AM

To your second question, no.

trading within a tax advantaged account makes life much easier.

3/29/2010 11:06:47 AM

Am I only allowed one IRA? Or can I have two? One for serious contributions, and another to fuck with?

3/29/2010 11:16:00 AM

You can have as many IRA's as you want but you can only contribute $5k this year across all of them combined.

(well technically you have another 10 days to contribute 5k for 2009, and could then do another 5k for 2010)

4/5/2010 12:21:58 AM

Any decent broker will calculate your cost basis for you electronically, if yall are talking about wash sales. Buying/Selling the same stock 2 or 20 times a year, doesn't matter.

[Edited on April 5, 2010 at 11:53 AM. Reason : .]

4/5/2010 11:52:33 AM

Quote :

"Start with ETFs Move on to indivudual stocks"

Indexed ETF's sound like the best choice here.

Trades like a stock, but are fully diversified like a mutual fund.

I, myself, have a ton of 'SPY'

4/5/2010 1:35:06 PM

^ And trade intraday which Mutual Funds do not. When did you get into SPY?

4/7/2010 3:16:30 PM

I only started buying recently (During the recession). I've been buying in about $1000 lots.


My lowest is like $82, my most recent was at $108. I have about $8-10k in it now. Maybe my 'a ton' comment was a bit off, but that's a lot of money to me

I'm basically trying to build a solid base of investments, then I'll play around with indivual 'growth' stocks with about 10% of my total balance.

Is there a list of indexed ETF's out there anywhere? I couldn't find any..I'd like to get a few emerging market indexes, small cap domestic index, or even like a Russell 2000 index.

[Edited on April 8, 2010 at 9:19 AM. Reason : ]

4/8/2010 9:18:21 AM