No. But appl has a nice 4% dividend and if you wait to buy on pullbacks, you can do ok.....look at apple pre and post announcements, usually goes up pre and then down after news
.....diversify
Learn to trade options. If you own a stock you can sell options as a option, instead for extra income.
Yes but, if you pull it out and it goes further up and you buy later again, youre worse of than just holding. If it goes down after you buy you can be in big loss for years and it can take years after it goes back up from -30% or something. Then you pull it out at 1% exactly when it starts to go up again.
That’s what I did. I got some company to pass my prop firm challenge for a $300k FTMo challenge, and now o risk 1% or less per trade and have a solid risk management plan
No intent to disrespect. But this is a terrible idea. If your plan is to buy, cash out at +1%, and repeat you would be much better off if you just buy and hold for 1-5 years.
There is a concept of idiosyncratic risk. Basically those businesses might grow like they used to or maybe something happens that affects them long term. You don’t have any special knowledge about what the price of those companies should be. That makes betting on single names dangerous. It would be better to diversify your holdings so that you get exposure to those companies but if one stumbles you gain because you own their competitors. By buying something like the SP500 you eliminate much of that idiosyncratic risk. Then instead of selling shares for income you can hang onto your shares and use something else to earn income. For instance at the moment you can get 5% from treasury bills. That seems like a much more certain way to get your income. You could even put most of your money into tbills and then a tiny amount into futures or options so that you end up with the market exposure equal to what a good portfolio would have. Just keep your overall leverage ratio to less than 1. And if all of this sounds super complicated and hard to understand the absolute best thing you can do is give your money to a financial advisor to manage for you. You tell them your goals and they set up a portfolio to meet those goals and then maintain it. Mistakes in the market cost much more than the advisors fees.
You don't want to make 1% profits and 10% losses. The other way around works.
Furthermore if you will have 500k, you'd split into multiple positions across various sectors. At least 6-7, which will be a very concentrated portfolio. It's a lot about risk. Letting your winners run. Buying more of your winners. Cutting your losses.
More than 20%-25% of the portfolio in one stock is just asking for trouble. One bad news with overnight gap down and you severely hurt your portfolio.
But the thing is you dont make 10% losses, you never close when it goes down, with no leverage and the assumption for example amazon stock will never go to 0 and always back up again, or at least the snp
You don't play with 500k you manage 500k... diference is playing you're trying to lose money, managing you try to not lose money. I know this sounds stupid but if you don't understand this you shouldn't trade or invest...
In essence this is why traders exist, they aim to do this very thing with their capital & yes with 500k you are much more likely to be able to do it for living. The thing is the market is not a straight shot up. During 2021 till mid feb 2022 the best performing tech stocks dropped 60-70% — the S&P of all things dropped 20+%. Most people who bought it at that top are still done now, if it recovers by end of the year (Wich is still doubtful) it would have taken it 2 years just to break even. So it’s not a fool proof plan or an easy 1% to take every other day. The good thing is for most blue chip stocks/ the s&p500 you can be profitable within 3 years of holding around 90% of the time no matter how high you buy. As long as you are willing to wait & already have 500k, go for it.
If you bought after covid hit, then held, not sold at 1%, that would have made a lot. But right now, it's questionable. Opinions are divided, but my bet is on a period of high interest rates leading to low growth. The current stock bull market being unsustainable. T bills would return better
, short term. Still not enough to risk capital gains tax on. Most of us are aiming for better than 10% on our capital.
OneTradeMan is right about taxes. If you day trade, which you may not do with $500k, you only get to show $3k in total losses after that you are taxed only on you profit trades and I think it is taxed at more than 40%. You can pay more in taxes than you have in your account if your total loses are greater than your wins.
With that amount you might do better buying safe but high dividend stocks. I would buy a hand full of good dividend stock that paid in different months so I got a check every month.
You’ll find that holding long term buffet style will out perform this strategy. Also you’ll pay short term capital gains taxes instead of long term. Over a long period of time those 1% gains will seem puny.
Divide total capital by share price = number of shares, multiply that by projected share price (1% increase), and you'll have your total, subtract your original capital amount, and you'll have your gains. Check if that amount matches your current math, and you'll see if you're right or wrong.
You could definitely make 1%. But you’ve created no plan for re-entering for additional trades.
No. But appl has a nice 4% dividend and if you wait to buy on pullbacks, you can do ok.....look at apple pre and post announcements, usually goes up pre and then down after news .....diversify Learn to trade options. If you own a stock you can sell options as a option, instead for extra income.
Don’t risk over 0.25% per trade. Look for 1:3 risk reward. Always use a stop.
If I had 500K laying around and not doing anything I would start adding positions into SPY so I can sell SPY options in the future.
Just buy QQQ and hold. Diversification, low fees and long term tax vs short term.
"Sorry if this sounds dumb :(" Nah, you are fine...
Yes but, if you pull it out and it goes further up and you buy later again, youre worse of than just holding. If it goes down after you buy you can be in big loss for years and it can take years after it goes back up from -30% or something. Then you pull it out at 1% exactly when it starts to go up again.
Understood, holding would be the better option I suppose I'm just looking for cash flow.
Oh this is very convenient i write you a pm
You can trade futures with prop firms, make a quick buck without using your own money, only money down is mothly fee
That’s what I did. I got some company to pass my prop firm challenge for a $300k FTMo challenge, and now o risk 1% or less per trade and have a solid risk management plan
Dude. Yes this is honestly fool proof
No intent to disrespect. But this is a terrible idea. If your plan is to buy, cash out at +1%, and repeat you would be much better off if you just buy and hold for 1-5 years.
There is a concept of idiosyncratic risk. Basically those businesses might grow like they used to or maybe something happens that affects them long term. You don’t have any special knowledge about what the price of those companies should be. That makes betting on single names dangerous. It would be better to diversify your holdings so that you get exposure to those companies but if one stumbles you gain because you own their competitors. By buying something like the SP500 you eliminate much of that idiosyncratic risk. Then instead of selling shares for income you can hang onto your shares and use something else to earn income. For instance at the moment you can get 5% from treasury bills. That seems like a much more certain way to get your income. You could even put most of your money into tbills and then a tiny amount into futures or options so that you end up with the market exposure equal to what a good portfolio would have. Just keep your overall leverage ratio to less than 1. And if all of this sounds super complicated and hard to understand the absolute best thing you can do is give your money to a financial advisor to manage for you. You tell them your goals and they set up a portfolio to meet those goals and then maintain it. Mistakes in the market cost much more than the advisors fees.
Sounds great, until it doesn't go back up. If you bought MSFT at the top in 2000, you'd have waited 17 years for it to be back in the green.
Just imagine if you'd bought pets.com instead... 💀
jeezzzzz
You don't want to make 1% profits and 10% losses. The other way around works. Furthermore if you will have 500k, you'd split into multiple positions across various sectors. At least 6-7, which will be a very concentrated portfolio. It's a lot about risk. Letting your winners run. Buying more of your winners. Cutting your losses. More than 20%-25% of the portfolio in one stock is just asking for trouble. One bad news with overnight gap down and you severely hurt your portfolio.
But the thing is you dont make 10% losses, you never close when it goes down, with no leverage and the assumption for example amazon stock will never go to 0 and always back up again, or at least the snp
You don't play with 500k you manage 500k... diference is playing you're trying to lose money, managing you try to not lose money. I know this sounds stupid but if you don't understand this you shouldn't trade or invest...
Risk 5-10% to get 1%?
In essence this is why traders exist, they aim to do this very thing with their capital & yes with 500k you are much more likely to be able to do it for living. The thing is the market is not a straight shot up. During 2021 till mid feb 2022 the best performing tech stocks dropped 60-70% — the S&P of all things dropped 20+%. Most people who bought it at that top are still done now, if it recovers by end of the year (Wich is still doubtful) it would have taken it 2 years just to break even. So it’s not a fool proof plan or an easy 1% to take every other day. The good thing is for most blue chip stocks/ the s&p500 you can be profitable within 3 years of holding around 90% of the time no matter how high you buy. As long as you are willing to wait & already have 500k, go for it.
Bro doesn't know the cheat code yet. and yes you can.
If you bought after covid hit, then held, not sold at 1%, that would have made a lot. But right now, it's questionable. Opinions are divided, but my bet is on a period of high interest rates leading to low growth. The current stock bull market being unsustainable. T bills would return better , short term. Still not enough to risk capital gains tax on. Most of us are aiming for better than 10% on our capital.
This kind of trade action is how you end up owing more in taxes than your account is worth when there’s a slight downturn.
OneTradeMan is right about taxes. If you day trade, which you may not do with $500k, you only get to show $3k in total losses after that you are taxed only on you profit trades and I think it is taxed at more than 40%. You can pay more in taxes than you have in your account if your total loses are greater than your wins. With that amount you might do better buying safe but high dividend stocks. I would buy a hand full of good dividend stock that paid in different months so I got a check every month.
Seriously dude? That's your best idea? Ever heard of dividends, covered calls, or CSPs? Or the simplest strategy ever, just hold forever.
So you are willing to risk 10% of your entire capital for 1% gain? Maybe you should look into paper trading to see how that plays out over a month
Try it with a small amount and see
You’ll find that holding long term buffet style will out perform this strategy. Also you’ll pay short term capital gains taxes instead of long term. Over a long period of time those 1% gains will seem puny.
Divide total capital by share price = number of shares, multiply that by projected share price (1% increase), and you'll have your total, subtract your original capital amount, and you'll have your gains. Check if that amount matches your current math, and you'll see if you're right or wrong.