All things STOCKS

#7,051
#7,051
Carp said:
AAOI on my watch list too for reversal. This stock has had a lot of volatility this year. Reaching highs of $17.57 in August. Pre-covid, it consistently sat between $8-$18 as well.
Click to expand...

Thanks, just added this to my watch list. I hate their net margin, but if it can move up and down in a fairly predictable manner you can make money off of it. I've been looking for some dependable rolling stocks.
 
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#7,057
#7,057
Bassmaster_Vol said:
Alright I just got RH. I have no idea what I’m doing. What should I invest in first?
Click to expand...

Depends a great deal on what your objective is and what your risk tolerance is. Also how patient you are and how long you can wait while sitting tight on an investment that drops in value.

Step 1... understand the difference between a limit order and a market order. You’ll most likely want to place limit orders.

If you are wanting to gamble on quick trades then I don’t really have a company name to recommend but there are several posters on here that will offer up suggestions. That might be what you are up to since you have a RH account. If you trade you should pay attention to the trading volume of the security that you’re interested in. A thinly traded stock is harder to unload than a high volume name. The difference (spread) between the bid and the ask price is narrower when stock names are more heavily traded.

If you are looking to build wealth then a fund will fit you best starting out. The Vanguard total market fund (VTI) is a good one. QQQ or SPY or DIA are large, US based index equity funds (ETFs, not mutual funds). There are a lot of Vanguard ETFs to chose from with low fees. Also the Select Sector SPDRs are interesting and efficient.

Home - Unique ETF's that divide the S&P 500 into 11 sectors | Select Sector SPDRs

Funds are safer. You can ramp up your risk by signing a margin agreement and use leverage (borrowed money from the broker) to buy more shares with the borrowed money. But it’s not a good strategy if watching your account equity dissolve quickly when the markets move against you isn’t something you can stomach.

You can also tilt the risk/reward function by buying double or triple leveraged funds. FAS and FAZ are leveraged funds that are comprised of financial stocks. These days there are Exchange Traded Funds (ETFs) for hundreds of different investment styles and themes. Marijuana, gold, silver, market volatility, specific country funds, geographic regions, sectors (tech, healthcare, consumer staples or discretionary, industrials, financials, utilities, energy, and a few others), industries (within sectors... home building, airlines, gambling, transports, semi-conductors, etc), growth stocks, income generating stocks and bonds, etc, etc.

Get your feet wet a bit before venturing into options. They can go to zero and often do. They diminish in value over time. But you can luck out and own the 1 in 20 that goes up a lot really quickly. Shares of stock and of funds have a theoretical unlimited life. But shares of stock in bad companies do frequently go to zero. There are 4 possible positions to take with options. You can own (take a long position) or go short with either of the 2 types of options... PUTS or CALLS.

Penny stocks are a bad idea. Most of the time it is a far better investment to own 2x shares of a $500 stock than 10,000x shares of a 10 cent stock.

Don’t get excited over stock splits either. It’s nothing but math. When stocks split there are more shares and the share value is diminished proportionally.

Dividends (measured by “yield”) are distributions of a company’s cash on hand to shareholders. It’s not efficient as the company does not get to write the dividend payments off as tax deductions, but the shareholder that receives the dividend is taxed on what they are paid.

There can be variations of many of the concepts above. For example some “dividends” are occasionally a return of capital and the shareholder reduces their cost basis in their shares instead of getting taxed on the money received. An ETF might technically be a similar, but different, legal investment vehicle... like a UIT (Unit Investment Trust).
 
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#7,058
#7,058
Thunder Good-Oil said:
Depends a great deal on what your objective is and what your risk tolerance is. Also how patient you are and how long you can wait while sitting tight on an investment that drops in value.

Step 1... understand the difference between a limit order and a market order. You’ll want to set limit orders must likely.

If you are wanting to gamble on quick trades then I don’t really have a company name to recommend but there are several posters on here that will offer up suggestions. That might be what you are up to since you have a RH account. If you trade you should pay attention to the trading volume of the security that you’re interested in. A thinly traded stock is harder to unload than a high volume name. The difference (spread) between the bid and the ask price is narrower when stock names are more heavily traded.

If you are looking to build wealth then a fund will fit you best starting out. The Vanguard total market fund (VTI) is a good one. QQQ or SPY or DIA are large, US based index equity funds (ETFs, not mutual funds). There are a lot of Vanguard ETFs to chose from with low fees. Also the Select Sector SPDRs are interesting and efficient.

Funds are safer. You can ramp up your risk by signing a margin agreement and use leverage (borrowed money from the broker) to buy more shares with the borrowed money. But it’s not a good strategy if watching your account equity dissolve quickly when the markets move against you isn’t something you can stomach.

You can also tilt the risk/reward function by buying double or triple leveraged funds. FAS and FAZ are leveraged funds that are comprised of financial stocks. These days there are Exchange Traded Funds (ETFs) for a few thousand different investment styles. Marijuana, gold, silver, market volatility, specific country funds, geographic regions, sectors (tech, healthcare, consumer staples or discretionary, industrials, financials, utilities, energy, and a few others), industries (within sectors... home building, airlines, gambling, transports, semi-conductors, etc), growth stocks, income generating stocks and bonds, etc, etc.

Get your feet wet a bit before venturing into options. They can go to zero and often do. They diminish in value over time. But you can luck out and own the 1 in 20 that goes up a lot really quickly. Shares of stock and of funds have a theoretical unlimited life. But shares of stock in bad companies do frequently go to zero. There are 4 possible positions to take with options. You can own (take a long position) or go short with either of the 2 types of options... PUTS or CALLS.

Penny stocks are a bad idea. Most of the time it is a far better investment to own 2x shares of a $500 stock than 10,000x shares of a 10 cent stock.

Don’t get excited over stock splits either. It’s nothing but math. When stocks split there are more shares and the value is diminished proportionally.

Dividends (measured by “yield”) are distributions of a company’s cash on hand to shareholders. It’s not efficient as the company does not get to write the dividend payments off as tax deductions, but the shareholder that receives the dividend is taxed on what they receive.

There can be variations of many of the concepts above. For example some “dividends” are occasionally a return of capital and the shareholder reduces their cost basis in their shares instead of getting taxed on the money received. An ETF might technically be a similar, but different, legal investment vehicle... like a UIT (Unit Investment Trust).
Click to expand...
Thanks for the info! I’m wanting to try some trades with RH. Just not sure what in looking at when trying to pick one.
 
#7,059
#7,059
Bassmaster_Vol said:
Alright I just got RH. I have no idea what I’m doing. What should I invest in first?
Click to expand...

A couple good books about investing, would be a good start, lol. I know not doing my research cost me a good amount of money.

Keeping up with current events helps a lot in predicting what certain segments are likely to do and the market in general.
 
#7,060
#7,060
Bassmaster_Vol said:
Thanks for the info! I’m wanting to try some trades with RH. Just not sure what in looking at when trying to pick one.
Click to expand...

There’s an ETF with the symbol JETS that is a basket of airline companies. The airlines are well off their bottoms but that ETF can give you exposure to air travel returning without the risk of picking one company that could go belly up.

If you are wanting to try high frequency trading, find a name that is volatile and has significant trading volume. Look and see what the top traded stocks are by the RH users. If you want to trade often, pick just a couple of securities and study them closely. Look for points to buy and to then sell.

Remember, you’ll want to chose to buy with a LIMIT ORDER, not a market order. Set your buy price and the number of shares that you want to buy. I always select AON (all or none) as well so that my buy order isn’t split up into multiple trades.
 
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#7,061
#7,061
BTW, you can enter your order at any time. I usually use GTC (good till cancelled) but NOT “plus after hours” (+EXT). That way you can look at the pre-market and adjust your price before the 9:30am open on Monday.

Also, learn about the date of record and ex-dividend dates if you trade around when dividends will be paid to determine if you are entitled to receive one and when.

Ex-Dividend Date vs. Date of Record: What's the Difference?
 
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#7,062
#7,062
And again, it’s going to matter what your objective is (build wealth or trade for “fun”) and what is your risk tolerance (avoid losing your money, willing to risk it for bigger potential returns, or conservative growth of the investments to name a few types of risk).
 
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#7,069
#7,069
Can’t believe you guys hating on SPACs. This is what so many of the charts look like. Get in between $10-11, it trades sideways until their partner is announced and then boom. And another big spike when the merger is complete.
 

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#7,070
#7,070
Go aeiou said:
Did the SPAC say they were looking to take EV company public or buy EV company when first formed?
Any current SPACs looking at EV companies?
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There are rumors of who the SPAC is targeting. You can look at the hedge fund manager’s typical interest and get an idea of the market they are targeting. And then some people I follow on Twitter just seem to get the news before it’s out to the general public.
 
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