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Message
Strategic Approach with Selling Individual Stocks?
Posted on 6/27/24 at 1:11 pm
Posted on 6/27/24 at 1:11 pm
First time posting on the Money Board. Long-time lurker. First, thanks for all the great information on here always, including on the stickied threads up top.
I wanted to get the MB’s thoughts on when to buy/sell various stocks that I’m investing in. I get “buy low, sell high,” but I’d like to see what resources (books, podcasts, videos) and insights/strategies you all might have on this account I opened. Let me give a bit more info.
I’m a federal employee and have my TSP maxed out and have 529s periodically funded for my kids. I have a rental and I’ve been considering buying another property for a while, but haven’t pulled the trigger for a variety of reasons. So rather than just watch my savings lose value, I moved my savings into a HYSA, and then decided to open an E*Trade account with a bit of my savings about 18 months ago to get a bit more return. The E*Trade account isn’t for retirement, but just to try to generate a bit more return and pull out, if/when needed, for a big purchase/investment, or to just keep trading/re-investing over time.
I put in an initial amount into the account when I opened it to just get an understanding of stocks and have just let it sit since that time. I’ve periodically funded this account, and have bought other stocks, but haven’t sold anything yet. I’ve had about a 10% return since that time (admittedly with more losers than winners, but NVDA, SPOT, and my ETFs have really helped tip the scales in the green). I have about half my portfolio in ETFs (e.g., QQQM, VOO, and SCHD) and the other half in individual stocks (NVDA, SLI, SPOT, AUPH, AKBA, PLTR, and probably about ten others). My NVDA holdings make-up about 1/3 of the value of this portfolio, and I considered selling a bit off if it climbed another 20-30 points before it’s recent dip over the last week.
My current strategy is to continue to treat the ETFs more as investments, but would like to begin selling portions of some of the individual winners and trading them (not on a daily/weekly basis), but just in an effort to realize some of the gains, and reinvest those gains in stocks that might have a bit more room to run. With NVDA, as an example, ideally if it continues to rise, I’d like to hang on to some long-term, but if I could pull out a portion of it once I get my initial investment back, that’d be nice to know that anything else that came from that would just be gains.
Does anyone have any pointers/strategies for doing so, or resources I should be considering to better educate myself in trading periodically? Unlike my retirement account, I know with individual stocks, I should be a bit more active in the management. Also, when I realize some of these gains by selling, what resources would you recommend in terms of educating myself on the tax ramifications if I’m still just reinvesting them in this E*Trade account.
Again, I realize this is the fundamental question of how to “buy low, sell high,” but I feel I’m just letting everything sit without much strategy and would be interested in any POVs on how to approach this (i.e., similar to the long-term ETF and NVDA approach above). Thanks.
I wanted to get the MB’s thoughts on when to buy/sell various stocks that I’m investing in. I get “buy low, sell high,” but I’d like to see what resources (books, podcasts, videos) and insights/strategies you all might have on this account I opened. Let me give a bit more info.
I’m a federal employee and have my TSP maxed out and have 529s periodically funded for my kids. I have a rental and I’ve been considering buying another property for a while, but haven’t pulled the trigger for a variety of reasons. So rather than just watch my savings lose value, I moved my savings into a HYSA, and then decided to open an E*Trade account with a bit of my savings about 18 months ago to get a bit more return. The E*Trade account isn’t for retirement, but just to try to generate a bit more return and pull out, if/when needed, for a big purchase/investment, or to just keep trading/re-investing over time.
I put in an initial amount into the account when I opened it to just get an understanding of stocks and have just let it sit since that time. I’ve periodically funded this account, and have bought other stocks, but haven’t sold anything yet. I’ve had about a 10% return since that time (admittedly with more losers than winners, but NVDA, SPOT, and my ETFs have really helped tip the scales in the green). I have about half my portfolio in ETFs (e.g., QQQM, VOO, and SCHD) and the other half in individual stocks (NVDA, SLI, SPOT, AUPH, AKBA, PLTR, and probably about ten others). My NVDA holdings make-up about 1/3 of the value of this portfolio, and I considered selling a bit off if it climbed another 20-30 points before it’s recent dip over the last week.
My current strategy is to continue to treat the ETFs more as investments, but would like to begin selling portions of some of the individual winners and trading them (not on a daily/weekly basis), but just in an effort to realize some of the gains, and reinvest those gains in stocks that might have a bit more room to run. With NVDA, as an example, ideally if it continues to rise, I’d like to hang on to some long-term, but if I could pull out a portion of it once I get my initial investment back, that’d be nice to know that anything else that came from that would just be gains.
Does anyone have any pointers/strategies for doing so, or resources I should be considering to better educate myself in trading periodically? Unlike my retirement account, I know with individual stocks, I should be a bit more active in the management. Also, when I realize some of these gains by selling, what resources would you recommend in terms of educating myself on the tax ramifications if I’m still just reinvesting them in this E*Trade account.
Again, I realize this is the fundamental question of how to “buy low, sell high,” but I feel I’m just letting everything sit without much strategy and would be interested in any POVs on how to approach this (i.e., similar to the long-term ETF and NVDA approach above). Thanks.
This post was edited on 6/27/24 at 3:44 pm
10
Posted on 6/27/24 at 1:16 pm to BrentED
Buy low, sell high
Posted on 6/27/24 at 2:19 pm to rowbear1922
quote:
Buy low, sell high
Which always turns to buy high, sell low
Posted on 6/27/24 at 2:39 pm to Weekend Warrior79
quote:
Which always turns to buy high, sell low
Definitely for me. Bought Namaste (NXTTF), now Lifeist (LFSWF) because of this board at $2.50+ a share and speculation said it would go as high at $7 about 7-8 years ago then “kept buying the dip” until I had a few hundred thousand shares (got the avg all the way down to $0.06 or $0.07). Once the stock went to $0.004, they did a 50-1 reverse split. After split it was near $0.08. Still continues to drop.
The little amount I would get back if I actualized my losses isn’t worth taking. I’ll either continue to ride until it goes bankrupt or until I need the losses to equalize gains elsewhere.
Posted on 6/27/24 at 3:01 pm to rowbear1922
Makes sense.
I have a similar issue with some Fisker stock I purchased. It might never rise to what I paid for it, but it's not worth selling at this point. So I'll just hang-on and see (keeping hopes low on that one).
While the situation isn't quite as dire for SLI or AUPH (down 55% and 68%, respectively), the same applies. I plan to just hold with hopes that they go up and buying a bit more from time-to-time to get my average down a bit.
But with something like Spotify, for instance, it's up 118% since my purchase. Sure, it could continue to climb, but what all would you factor into making the decision it's time to cash a bit of that out.
I have an exit strategy for some of my NVDA holdings (as described in the OP), which is to cash out some of my shares if and when the gains match what I've invested. But I also recognize NVDA is a bit different than the bulk of my portfolio and would just be interested to hear a similar thought process on what would go into the MBs calculus and approach on selling others, or thoughts on the approach I'm taking with NVDA.
I have a similar issue with some Fisker stock I purchased. It might never rise to what I paid for it, but it's not worth selling at this point. So I'll just hang-on and see (keeping hopes low on that one).
While the situation isn't quite as dire for SLI or AUPH (down 55% and 68%, respectively), the same applies. I plan to just hold with hopes that they go up and buying a bit more from time-to-time to get my average down a bit.
But with something like Spotify, for instance, it's up 118% since my purchase. Sure, it could continue to climb, but what all would you factor into making the decision it's time to cash a bit of that out.
I have an exit strategy for some of my NVDA holdings (as described in the OP), which is to cash out some of my shares if and when the gains match what I've invested. But I also recognize NVDA is a bit different than the bulk of my portfolio and would just be interested to hear a similar thought process on what would go into the MBs calculus and approach on selling others, or thoughts on the approach I'm taking with NVDA.
Posted on 6/27/24 at 3:06 pm to BrentED
You should sell when you need the money or if you no longer believe in the company growth or feel the money will be better used somewhere else. Otherwise you should hold your investments and not trade
Posted on 6/27/24 at 3:17 pm to DaBeerz
Yeah, it was a lot. Sorry about that. Thought about dialing it back, but I've been reading this board long enough to know a number of questions that follow these threads and was just trying to give as much background as possible (e.g., describing that this account isn't for retirement, etc. ).
I also know that the question of what my goal is (i.e., investment vs. trading) is usually a key focus, and in this case it's a bit of a hybrid.
Thanks for the recs. Appreciate it.
This post was edited on 6/27/24 at 3:31 pm
Posted on 6/27/24 at 3:40 pm to BrentED
Buy with an exit strategy in mind first and stick to it unless there is a very compelling reason and you are certain that you aren't just reacting emotionally.
15+ stocks is a lot for anyone much less an amateur to effectively track and make actual informed decisions.
I learned long ago I couldnt keep up/didnt have desire to and didnt have an exit strategy either. I'm also tax averse so never want to sell my winners and when they are climbing dont want to miss gains. Due to this, I held Boeing, CVS, and others through large gains and subsequent declines. So, I stopped investing in anything but ETFs where I could buy/hold and not try in vain to out smart the market and experts w real insight into specific companies and industries. Once in awhile I dabble but it's for entertainment like dropping some $ on a few hands of blackjack nothing more serious.
You mention TSP and 529, are you funding Roth IRAs too? if not, that would be my next move. You can tap the contributions tax/penalty free anytime (although ideally leave it untouched as long as possible.) You can trade in IRA without tax consequences as opposed to taxable brokerage taxed at long term capital gains or higher short term rate. If the reason you arent using IRAs is you need the money sooner and dont want it locked away in retirement, then it's not $ you can afford to be gambling on individual stocks imo.
If you're gonna learn and commit to individual stocks, holding a dozen or more positions isnt the way to go. Get your diversification elsewhere and concentrate your bets where you can apply enough focus to at least hope to be decently informed and vigilant about executing your strategy (once you sort that out.)
15+ stocks is a lot for anyone much less an amateur to effectively track and make actual informed decisions.
I learned long ago I couldnt keep up/didnt have desire to and didnt have an exit strategy either. I'm also tax averse so never want to sell my winners and when they are climbing dont want to miss gains. Due to this, I held Boeing, CVS, and others through large gains and subsequent declines. So, I stopped investing in anything but ETFs where I could buy/hold and not try in vain to out smart the market and experts w real insight into specific companies and industries. Once in awhile I dabble but it's for entertainment like dropping some $ on a few hands of blackjack nothing more serious.
You mention TSP and 529, are you funding Roth IRAs too? if not, that would be my next move. You can tap the contributions tax/penalty free anytime (although ideally leave it untouched as long as possible.) You can trade in IRA without tax consequences as opposed to taxable brokerage taxed at long term capital gains or higher short term rate. If the reason you arent using IRAs is you need the money sooner and dont want it locked away in retirement, then it's not $ you can afford to be gambling on individual stocks imo.
If you're gonna learn and commit to individual stocks, holding a dozen or more positions isnt the way to go. Get your diversification elsewhere and concentrate your bets where you can apply enough focus to at least hope to be decently informed and vigilant about executing your strategy (once you sort that out.)
This post was edited on 6/27/24 at 6:30 pm
Posted on 6/27/24 at 3:57 pm to BrentED
I got burned on several small caps (mainly from this board) a few years back. Still holding some and sold others for loses.
The past year and 1/2, I’ve been swing trading some of the large caps and I just about covered my loses. AMZN, META, XOM, etc. I currently have a chunk of my play money in TSLA, up 11% now. Adjusting stop loses daily, hoping it runs back to upper 200’s.
The past year and 1/2, I’ve been swing trading some of the large caps and I just about covered my loses. AMZN, META, XOM, etc. I currently have a chunk of my play money in TSLA, up 11% now. Adjusting stop loses daily, hoping it runs back to upper 200’s.
This post was edited on 6/27/24 at 3:59 pm
Posted on 6/27/24 at 4:01 pm to TorchtheFlyingTiger
Thanks!
I was beginning to get this feeling. For some of the stocks of interest around here, it's easier (e.g., SLI, AUPH), but for others, it's a lot to keep up with.
Yup! I just started playing around with individual stocks originally, and then picked up on the ETFs about halfway down the line. While the gains aren't hitting like NVDA or SPOT, the losses also aren't hitting like Rivian and AUPH. So I think I'm slowly transitioning to a more ETF-heavy approach.
So the TSP account I'm maxing is a ROTH TSP. I'm a fed employee and a Reservist. I went above the ROTH cap last year with those two accounts and it messed with my taxes a bit. Not sure if I can start a ROTH IRA if I'm already maxing the ROTH cap with my TSPs. But if you know, I agree that would be my preferred approach. The reason I started this account in the first place was that my TSP was maxed out, and I didn't just want the money to sit in savings. But if I could fund a ROTH IRA with it, I wouldn't be opposed to that.
I also have a small simple IRA account from a prior employer and a bit in state pension, I could go after to fund the ROTH IRA aside from this E*Trade account that would give it a nice start.
quote:
15+ stocks is a lot for anyone much less an amateur to effectively track and make actual informed decisions.
I was beginning to get this feeling. For some of the stocks of interest around here, it's easier (e.g., SLI, AUPH), but for others, it's a lot to keep up with.
quote:
I learned long ago I couldnt keep up/didnt have desire to and didnt have an exit strategy either. I'm also tax averse so never want to sell my winners and when they are climbing dont want to miss gains. Due to this, I held Boeing, CVS, and others through large gains and subsequent declines. So, I stopped investing in anything but ETFs where I could buy/hold and not try in vain to out smart the market and experts w real insight into specific companies and industries. Once in awhile I dabble but it's for entertainment like dropping some $ on a few hands of blackjack nothing more serious.
Yup! I just started playing around with individual stocks originally, and then picked up on the ETFs about halfway down the line. While the gains aren't hitting like NVDA or SPOT, the losses also aren't hitting like Rivian and AUPH. So I think I'm slowly transitioning to a more ETF-heavy approach.
quote:
You mention TSP and 529, are you funding Roth IRAs too? if not, that would be my next move.
So the TSP account I'm maxing is a ROTH TSP. I'm a fed employee and a Reservist. I went above the ROTH cap last year with those two accounts and it messed with my taxes a bit. Not sure if I can start a ROTH IRA if I'm already maxing the ROTH cap with my TSPs. But if you know, I agree that would be my preferred approach. The reason I started this account in the first place was that my TSP was maxed out, and I didn't just want the money to sit in savings. But if I could fund a ROTH IRA with it, I wouldn't be opposed to that.
I also have a small simple IRA account from a prior employer and a bit in state pension, I could go after to fund the ROTH IRA aside from this E*Trade account that would give it a nice start.
This post was edited on 6/27/24 at 4:05 pm
Posted on 6/27/24 at 4:25 pm to BrentED
First, good on you for funding investment accounts, learning and being humble enough to ask questions.
I'd highly encourage you to pause on getting knowledge and experience trading stocks and instead focus on learning the basics of investing in tax advantaged accounts, asset types and taxation. You have some gaps in understanding TSP, your primary retirement investment account. So I would focus there first.
TSP (like 401ks) are a separate limit than IRAs. You can max both TSP and IRA (Roth or traditional). You need to consider marginal tax bracket now versus the effective rate you expect to pay on withdrwals (some portion is likely to fall in lower bracket even if last part of annual withdrawal falls in a high bracket. So dont just compare marginal vs future marginal rate.)
Your TSP employee contribution max is combined between civilian and uniformed service TSP accounts (just like you cant max 2 seperate 401ks for same individual). You also need to make sure not to max it before last paycheck because there is no true up provision w TSP so you miss matching for rest of year.
If you arent over income limit you can also contribute to Roth IRA (can also fund one for spouse.) If over limit you could backdoor Roth but first you would probably want to rollover the SIMPLE IRA into TSP to avoid prorata rule.
Sorry, that's a lot but hope it is helpful and illustrates the point you have a lot to learn about your primary investments before concentrating efforts on how to effectively assess value and trade stocks.
I'd highly encourage you to pause on getting knowledge and experience trading stocks and instead focus on learning the basics of investing in tax advantaged accounts, asset types and taxation. You have some gaps in understanding TSP, your primary retirement investment account. So I would focus there first.
TSP (like 401ks) are a separate limit than IRAs. You can max both TSP and IRA (Roth or traditional). You need to consider marginal tax bracket now versus the effective rate you expect to pay on withdrwals (some portion is likely to fall in lower bracket even if last part of annual withdrawal falls in a high bracket. So dont just compare marginal vs future marginal rate.)
Your TSP employee contribution max is combined between civilian and uniformed service TSP accounts (just like you cant max 2 seperate 401ks for same individual). You also need to make sure not to max it before last paycheck because there is no true up provision w TSP so you miss matching for rest of year.
If you arent over income limit you can also contribute to Roth IRA (can also fund one for spouse.) If over limit you could backdoor Roth but first you would probably want to rollover the SIMPLE IRA into TSP to avoid prorata rule.
Sorry, that's a lot but hope it is helpful and illustrates the point you have a lot to learn about your primary investments before concentrating efforts on how to effectively assess value and trade stocks.
Posted on 6/27/24 at 4:39 pm to BrentED
If you want to get even more into Roth IRA, consider a Roth conversion on the SIMPLE IRA. You'd have to pay income tax on the converted $ but it doesnt count against annual IRA contribution limits. Rolling it into TSP would delay those taxes until withdrawal but just limits accessibility, investment choices and would remain traditional instead of boosting your Roth balance.
These Roth vs traditional vs taxable brokerage choices are all predicated on current and future income/tax situation. With expected pension and if you have sizeable rental income etc, at retirement your tax rate be higher than now but perhaps not if your current income is high. Dont assume Roth is best it gets overhyped.
These Roth vs traditional vs taxable brokerage choices are all predicated on current and future income/tax situation. With expected pension and if you have sizeable rental income etc, at retirement your tax rate be higher than now but perhaps not if your current income is high. Dont assume Roth is best it gets overhyped.
Posted on 6/27/24 at 6:18 pm to Weekend Warrior79
quote:
Buy low, sell high
Which always turns to buy high, sell low
Which is why you should choose a stock based on the fundamentals, so you're ok if you end up getting "stuck" with it in the short term.
Posted on 6/27/24 at 6:25 pm to BrentED
quote:
wanted to get the MB’s thoughts on when to buy/sell various stocks that I’m investing in. I get “buy low, sell high,” but I’d like to see what resources (books, podcasts, videos) and insights/strategies you all might have on this account I opened. Let me give a bit more info.
Use a stock screener and find stocks with a reasonable debt to asset ratio and a P/E ratio that isn't too high.
"When" would mean you're timing the market which is a fool's errand. If you still want to go that route, check Marketwatch each day for the ten biggest losers on the S&P. If the overall market is making dumb decisions, that's a good time to pounce.
Example: I bought $HOG during the pandemic. They closed their factory due to an outbreak, and the stock tanked. I decided to be greedy when everyone else was fearful. The fundamentals were solid and Harley riders are hardcore fanboys.
It's almost twice what I paid for it. As a bonus I've been collecting a dividend every quarter. I could cash in but it's a good one to hold.
The tax implications of swing trading are that short term (less than a year) gainz are ordinary income.
Posted on 6/27/24 at 6:52 pm to BrentED
Let winners run.
Sell the losers.
Sell the losers.
Posted on 6/27/24 at 7:25 pm to makersmark1
quote:
Let winners run.
Sell the losers.
Depends.
You don't want to be impatient. You also don't want to sell at a loss so you can belatedly jump on a winner.
But if you want to do tax loss harvesting or you NEED CASH NOW you might want to liquidate the stinkers.
Posted on 6/27/24 at 8:25 pm to rowbear1922
quote:
Bought because of this board at $2.50+ a share and speculation said it would go as high at $7 about 7-8 years ago then “kept buying the dip” until I had a few hundred thousand shares (got the avg all the way down to $0.06 or $0.07). After split it was near $0.08. Still continues to drop.
Yeap you've definitely come to the MB for advice when this happens. To OP i'm not sure asking this place about buying individual stocks is a great idea. Any other topics this place is pretty good though.
Posted on 6/27/24 at 9:20 pm to FLObserver
quote:
To OP i'm not sure asking this place about buying individual stocks is a great idea
Just don't blindly follow the recommendations. Look up the financials for yourself, and/or ignore anyone who doesn't show his work.
Posted on 6/28/24 at 9:53 am to TorchtheFlyingTiger
quote:
I'd highly encourage you to pause on getting knowledge and experience trading stocks and instead focus on learning the basics of investing in tax advantaged accounts, asset types and taxation. You have some gaps in understanding TSP, your primary retirement investment account. So I would focus there first.
Thanks! This is why I gave so much information and background with investment accounts. You can say you want to discuss strategies for selling stocks. But I know there's definitely a priority/hierarchy to making your money work for you, and that doing so with tax advantaged accounts seems to be close to the top of the list.
quote:
TSP (like 401ks) are a separate limit than IRAs. You can max both TSP and IRA (Roth or traditional). You need to consider marginal tax bracket now versus the effective rate you expect to pay on withdrwals (some portion is likely to fall in lower bracket even if last part of annual withdrawal falls in a high bracket. So dont just compare marginal vs future marginal rate.)
Got it. Good info that I was unaware of.
quote:
Your TSP employee contribution max is combined between civilian and uniformed service TSP accounts (just like you cant max 2 seperate 401ks for same individual). You also need to make sure not to max it before last paycheck because there is no true up provision w TSP so you miss matching for rest of year.
Yup! Ran into this issue last year. Missed out on nearly $1k free money.
quote:
If you arent over income limit you can also contribute to Roth IRA (can also fund one for spouse.) If over limit you could backdoor Roth but first you would probably want to rollover the SIMPLE IRA into TSP to avoid prorata rule.
I make the cut. Would rolling over my simple IRA account into my TSP have any effect on my $23,500 limit per year for my ROTH TSP? Or would a rollover be exempt from those contribution limits?
quote:
Sorry, that's a lot but hope it is helpful and illustrates the point you have a lot to learn about your primary investments before concentrating efforts on how to effectively assess value and trade stocks.
No, this is super helpful. The goal is to make my money work as well for me as it can without me screwing it up. I've made enough mistakes managing investments over the years, I'm ready to get it straight and there's not any room for ego when the alternative is to kick myself a year or two from now when I learn there's a better way but it cost me a couple thousand dollars. Thanks!
Posted on 6/28/24 at 10:05 am to TorchtheFlyingTiger
quote:
If you want to get even more into Roth IRA, consider a Roth conversion on the SIMPLE IRA. You'd have to pay income tax on the converted $ but it doesnt count against annual IRA contribution limits. Rolling it into TSP would delay those taxes until withdrawal but just limits accessibility, investment choices and would remain traditional instead of boosting your Roth balance.
Seems like the better approach. While the TSP would have a much higher balance and the conversion would probably help having that account continue to snowball, the ROTH IRA would give me more options on investing (which I like having) and if I could access it a bit easier (if needed) that'd be nice.
quote:
These Roth vs traditional vs taxable brokerage choices are all predicated on current and future income/tax situation. With expected pension and if you have sizeable rental income etc, at retirement your tax rate be higher than now but perhaps not if your current income is high. Dont assume Roth is best it gets overhyped.
Yeah, this is where I've been struggling for a year or two now. I bought into the ROTH TSP hype and it's all ROTH now, but the more I think about it, unless I can manage to get 3-4 more rentals before retirement (which is possible, and a goal) then it seems like my income is higher now than it will be then, which means I should probable get out of ROTH.
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