Investment Question.. Stocks and such

[shynegrynd07 10+ year member]

I deposited $450 and invested $420 of it into various stocks.

$50 into NBF

$50 into API

$70 into CAAS

and $250 into WCG when it was down

I sold NBF because it was a natural gas company and i came to the realization that there was too much competition and not enough demand.

When i sold it i took like a $10 loss and another $15 due to a real-time trade cus sharebuilder is g-hey.

So right now my balance is at $461.63 and it's looking pretty good. I spent a few days looking for stocks that seemed to be in a slump. The ones i bought went down a bit more, but seem to be steadily increasing as of the past week.

Now to my main question, What taxes will i have to pay, not counting Sharebuilder's fees and taxes?

I know there's capital gains, but I'm not sure how much I'd pay. Does it depend on income and what not?

A bit of info about me if it's necessary for taxes. I'm 18, senior in High School, middle class family, live at home, no dependants, and make $7.25 an hour working 1-5 monday through friday

thanks, any help would be appreciated!

And if your looking to try and start your own trading account, Sharebuilder is the way to go for long-term investment and retirement plans, if you want to be an active day trader, TradeKing is the way to go (out of my research) -they have the lowest trading rates.. just not as many bells and whistles

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[Flipx99 5,000+ posts]

I deposited $450 and invested $420 of it into various stocks.
$50 into NBF

$50 into API

$70 into CAAS

and $250 into WCG when it was down

I sold NBF because it was a natural gas company and i came to the realization that there was too much competition and not enough demand.

When i sold it i took like a $10 loss and another $15 due to a real-time trade cus sharebuilder is g-hey.

So right now my balance is at $461.63 and it's looking pretty good. I spent a few days looking for stocks that seemed to be in a slump. The ones i bought went down a bit more, but seem to be steadily increasing as of the past week.

Now to my main question, What taxes will i have to pay, not counting Sharebuilder's fees and taxes?

I know there's capital gains, but I'm not sure how much I'd pay. Does it depend on income and what not?

A bit of info about me if it's necessary for taxes. I'm 18, senior in High School, middle class family, live at home, no dependants, and make $7.25 an hour working 1-5 monday through friday

thanks, any help would be appreciated!

And if your looking to try and start your own trading account, Sharebuilder is the way to go for long-term investment and retirement plans, if you want to be an active day trader, TradeKing is the way to go (out of my research) -they have the lowest trading rates.. just not as many bells and whistles

The loss on the transaction fee doesn't count. The taxes you will pay will be insignificant at best. It is counted as wages, so whatever your tax bracket is (probably the lowest) that is what you will pay.

Good job on getting started in investing. I love it. I wouldn't advise you make the choices you did...Transaction fees will elimate any gains you make. For instance, I won't sell unless transaction fees account for 1% of the transaction.

 

[shynegrynd07 10+ year member]

Good job on getting started in investing. I love it. I wouldn't advise you make the choices you did...Transaction fees will elimate any gains you make. For instance, I won't sell unless transaction fees account for 1% of the transaction.

Thanks! I was thinking the same. However, I don't quite understand what you mean when you say you won't sell unless transaction fees account for 1% of the transaction.. Like since i put $50 into NBF and realized it was a mistake and i would probably lose money on it, i sold it. So.. what are you saying you would do in that situation or a similar situation of your own?

 

[Flipx99 5,000+ posts]

Okay, this is what you should think about.

1) If you buy $50 worth of stock A. The transaction fee is $15, and the spread on each stock is probably .30. So you are looking at about $8 in spread. (You buy at the "ask" and sell at the "bid". So the total fees is about $23. So, in the best case, you will reap about $27 for the sale. (How accurate is that, just wondering?) So $23/$50 = 46%. So the transaction fee counts for 46% of the sale.

I wait until I have atleast $1,000. So then if the transaction fee is $23, it only represents about 2% of the sale. There are also regulatory fees called Section 31 fees, but I am sure it is just a few cents.

2) I hate penny stocks. They are way too much trouble for the gains, IMO.

 

[shynegrynd07 10+ year member]

1) You were very close, It was $29 dollars i got back out of the $50. I've never heard of anything you just said but I'm assuming you divided 15 by 50 to get the 30% as the spread per each stock.. but how did you get the $8 as total spread?

Secondly, I am starting to figure out that penny stocks are a lot of work. My WCG is up in the $30's now so it's not quite a penny stock (i don't think) and I am a lot happier with it than the other two. What would you have done with $450 to invest?

And i understand what you meant about not selling until your way up so the fees don't kill your profit. But i think with smaller stocks that aren't all too stable, your going to have to take those risks and losses from time to time.

How do you choose stocks? I've been using CAPS on MSN and the Top 10's and Top 50's and seeing what's good and looing at the P/E Ratio, because that's about the only thing i understand as of now. I don't know what a lot of the things on the screener mean yet though so I'm still trying to obtain a sure way to find good stocks for both short term and long term investing.. Do you have any suggestions? I've seen your advice on here many times and you seem very credible and very smart about finances and economics.. Exactly what i intend to attend college for.

thanks

and one quick question.. what's better to invest in, small or larg capped stocks? what creditientals and information makes a stock, in your eyes, worth investing in? cus i look at a stocks A and B and have no clue which would be a better investment..

I won't be able to answer back to this thread until this evening because i have to go to class and then work; but i'll be sure to get back and check. i'm very curious and would love to further my investment knowledge.. i jsut find it hard to find someone to talk to who actually knows what they're talking about.

 

[Flipx99 5,000+ posts]

I typically don't buy individual stocks, as it is too much work. Plus, you can't time individual companies, but you can hold a contrarian view on sectors (financials, consumer discretionary, consumer stamples, etc) So I invest in ETFs, which are securitzied stocks (think a basket of similar stocks). P/E Ratio is not the end-all and be-all. The standard is different for different sectors and growth stages. Don't just look at that.

Just ask questions about what you see in the screener. I don't use them, but I know what the terms mean and can explain them to you.

As for large cap vs. small cap; traditionally small cap growth outperforms the rest. However, again, I don't invest in individual stocks....but as far as ETFs, I have the majority of holding in midcap at the moment. I am waiting for small cap prices to fall as investors fly to quality. (Typically, less risky large cap stocks)

As for what to look for; the best advice I can give is go to Berkshire Hathaway's website and read the letter to shareholders. There is 30 years of investment advice for free from the best who has ever done it.

 

[shynegrynd07 10+ year member]

I will deffinately check out that letter. I uderstand what an ETF is through your wording, but is buying them the same as buying a stock? Like is there a symbol you look up and such? And also, how would you buy it.. the same way as a stock?

You really seem to know your stuff.. are you attending college now or are you out?

i feel like im asking way to many questions, but i'm really interested lol thanks

 

[Flipx99 5,000+ posts]

Do you have AIM?

 

[shynegrynd07 10+ year member]

that's a good idea.. my screen names ssco13

 

[jrerun21 10+ year member]

awww flip... why'd you have to take it to aim... i was trying to learn something //content.invisioncic.com/y282845/emoticons/frown.gif.a3531fa0534503350665a1e957861287.gif i'm trying to get in investing myself... but more along the lines of longterm investments... i don't want to play the stock market like a slot machine

 

[shynegrynd07 10+ year member]

i was kinda thinking the same thing jrerun, i figured that it was very useful information and a lot of people would benefit from the extra info.. could even become a stick lol

 

[SteveSkal]

Nice job getting started investing young. Very impressive. Penny stocks are cool, risky, but at the same time those are the kinds of stocks you can get rich on, all it takes is ONE company to do something great and you just made bank. Its all about risk and reward my friend.

 

[Flipx99 5,000+ posts]

awww flip... why'd you have to take it to aim... i was trying to learn something //content.invisioncic.com/y282845/emoticons/frown.gif.a3531fa0534503350665a1e957861287.gif i'm trying to get in investing myself... but more along the lines of longterm investments... i don't want to play the stock market like a slot machine

Because it is slow. Do you have AIM? We can make a chat room. Or you can ask me what you want.

Make a list and I will answer all the questions. Don't say, "I don't know where to begin" If you are that lost, post your current situation and where you want to be.