Day trade or invest?

[jasoni]

Hi all,

I know alot of you aren't qualified to give advice, but you are all alot more knowledgeable than myself about trading/investing.

I currently have about 5K invested in shares, 2 are long term and the other.. well im not sure - maybe long maybe short..

Is it worthwhile to leave the third in there for investment? today it is breaking out.. wondering if i should watch the exit carefully or let it drop after all the sellers sell out.. ie long or short?

So on this third stock, if its been in there less than 12 months, I am paying tax on half of profits (CGT??)?? Rather than normal tax if it is in there for over 12 months?

 

[theasxgorilla]

So on this third stock, if its been in there less than 12 months, I am paying tax on half of profits (CGT??)?? Rather than normal tax if it is in there for over 12 months?

It's the other way around. Hold for 12 months or longer, halve your CGT liability on profits.

 

[dj_420]

i used to invest based on the capital gains tax thinking ill hold everything i own for a year. but i saw better opportunities that were passing by. so now i dont really worry about capital gains, if you see an opportunity for short term increase, why not take it?

so now i hold 5 companies, two possibly three for long term. other two medium term. and some cash for short term opportunities i find.

 

[theasxgorilla]

In consideration of slippage, brokerage and full CGT I believe this a big case to be made for placing your positions in a bull market early and holding them for the longer term, hopefully through a period of doubling, tripling or even better price appreciation.

Unfortunately for most people this represents extreme boredom and hence is not a desirable way to play in the markets.

 

[mb1]

Agree, but day trading can lead to emotions and unclear thinking.

 

[dj_420]

i agree with some points, however what about somone who missed the majority of the bull market?

i think there are great opporunities for small quick gains without presenting to much downside risk for oneself.

fair enough if people have been lucky enough or great insight to have begun investing in mining three years ago. however many people believe we are reaching the top in mining. therefore would it be unwise to invest at these heady levels with a long term view, if we are faced with medium term consolidation?

just my two cents.

 

[soul]

in the australia market is better to invest then day trade with the heavy tax

as in ur case i think you should invest 5000 cut into parts ur trade might already pay a few percentage to brokage already before making any money

 

[rowes]

Hi,

Its up to personal preference, Long term if you do not have the time to educate yourself and develop a short term plan.

Personally I think short term is a better way to go to maximise profits, when something is not going your way take it out and put it somewhere else where your money will work for you. This of course is pretty simplified, takes time,education and discipline to manage your shortterm investments profitibly.

Then agian if the stock you held was just short of the twelve month holding period you may as well hang on for the half price cgt tax benefit

This is of course just my humble opinion

 

[tech/a]

Hi,

Its up to personal preference, Long term if you do not have the time to educate yourself and develop a short term plan.

Personally I think short term is a better way to go to maximise profits, when something is not going your way take it out and put it somewhere else where your money will work for you. This of course is pretty simplified, takes time,education and discipline to manage your shortterm investments profitibly.

Then agian if the stock you held was just short of the twelve month holding period you may as well hang on for the half price cgt tax benefit

This is of course just my humble opinion

Remember there are many different paths to the same river.

With larger sums ($100,000s or more) trading in smalls is not practical.
Profitable long term methodologies are just as difficult to formulate as short term ones particularly if you wish to well and truely out perform the index.

Short term trading takes far more time and while you can better the return (Well some can) over longer term strategy's this may not be the prime motivation.

Personally I like a bit of both.
The liquidity of the Market is what appeals most to me.
If I have a $350,000 property and wish to buy and sell it it will take Months.
In the market it takes a phone call.---Big benefit!

 

[silence]

Whatever you feel comfortable with and can make work.


However, don't use your mind to delude yourself, i.e. don't do this:

"I'm going to be a trader, so I'll buy this at $1.

Damn, it's gone down to 0.80, but that's ok, I'll just hold onto it as an investment."

 

[tech/a]

haha very true.

If your consistently profitable your a trader.
If not an investor.

Love it.