03-16-2014, 09:38 PM
I think it's best to use a separate account for this sort of activity. This does two things.
1) Commissions are lower. This is because you can open an account just for this sort of activity. You can trade options contracts and stocks for $1.00 or less at certain large discount brokers.
2) It forces you to separate your investments from your trading activity. This has really helped me buckle down and not sell my long term investments over the years. I will never go back to mixing speculation and investment in the same account, ever. I just can't do it
The downside to this is that you need money for the trading account. Most of the discount brokerages I'm thinking of have higher than normal minimum requirements. This can be a big hurdle if you are just starting out.
Maybe it's something worth trying.
I probably should add that this idea of separation forces you to really think about what you are buying. If you know you are buying to hold for the long term you tend to really think about what you are getting into. You also tend to pay less attention to your investments(which is a good thing IMO) because you have your trading account to keep you busy. I think I got a little off topic here
1) Commissions are lower. This is because you can open an account just for this sort of activity. You can trade options contracts and stocks for $1.00 or less at certain large discount brokers.
2) It forces you to separate your investments from your trading activity. This has really helped me buckle down and not sell my long term investments over the years. I will never go back to mixing speculation and investment in the same account, ever. I just can't do it
The downside to this is that you need money for the trading account. Most of the discount brokerages I'm thinking of have higher than normal minimum requirements. This can be a big hurdle if you are just starting out.
Maybe it's something worth trying.
I probably should add that this idea of separation forces you to really think about what you are buying. If you know you are buying to hold for the long term you tend to really think about what you are getting into. You also tend to pay less attention to your investments(which is a good thing IMO) because you have your trading account to keep you busy. I think I got a little off topic here