How can I profit in the stock market with all these taxes and comissions?

Question

I want to get started in investing in comapnies that I believe in. I think I will start with about $1000 after I save up and research some companies. I was not born into incredible wealth or a country club membership, so how do I get started in investing in stocks and avoid capital gains taxes and other pitfalls?

Answer 1

You can never avoid capital gains as long as you play the stock market.

However, you can lessen commissions by buying larger amounts of shares with a discount broker (e.g. ScottTrade). Don't buy small monetary amounts of a stock, otherwise the commissions will eat you alive. Also, the less number of buy/sells you do, the less commissions you pay. For example, if you buy $200 of a stock, and the commission is $10, then you've already lost ~5%. The stock would need to go up at least 10% in order for you to break even, because you also have to pay $10 to sell.

People who get rich quick via the market also tend to give it all back or more just as easily. Most who make wealth are those who invest in good companies and hold it for long periods of time. And most started out just like you. Patience and research are key.

People typically invest in stocks using an IRA account, or a 401k if your company offers it. This is because IRAs and 401k accounts have the potential to allow folks to defer certain taxes.

Answer 2

You also need to understand that the stock market is quite rarely a "get rich quick" scheme. I won't say it never happens, but infrequently, if ever, sounds right to me. Most people who make significant amounts in the markets are there for the long haul. It's not realistic to think you'll dump in $1000 and get much farther than $1080-$1100 if you invest well and cut commissions to as little as possible. Time is on your side when it comes to playing the markets. I've had some stocks that I bought when I got money willed to me, it wasn't anything too great, but $5000 worth of stocks in this company has grown to like $20,000. All I did was pick a company that had been around a long time and I thought had a future... inflation did the rest.

Answer 3

Taxes !..paying taxes means you are making profits...c'mon now, don't you want to share with the poor unfortunates who can't figure out how to save a few bucks and invest it?
Commissions!... choose wisely, don't try to be a day trader...hold things (you picked a good one, right?) 'til the commission is just a tiny portion of the profit.
Seriously, just take it slow 'til you build up some confidence ( and some income)
Log on to E-trade...get an application, deposit some money....and you got yourself an on-line portfolio ( just like " the golf course set)....think long and hard, and put a few small lots of some companies with a future in there...you'll get the hang of it faster than you think!

Answer 4

You only need three things

Time
Discipline
Money

The good news is the first two are more critical than the last.

There's no substitute for gutting it out like everyone else.
Stay diversified, keep your expenses to a minimum, and avoid stockbrokers & salesmen like the plague--- those guys are greaseball sleazebags-most of which don't know shtt about basic concepts of finance. They're only interested in selling you something they probably would never buy.

Read The Intelligent Investor---Benjamin Graham--- he's the one who taught Buffett.

Answer 5

Bank robbery is much better for capital gain without paying tax.

Answer 6

sure, they are technically element of your internet positive factors or loses. you are able to not declare them quickly, yet in a roundabout way via your losses or positive factors from the sale of inventory. In different words, they are already calculated into your positive factors or losses. good question, good publish!

Answer 7

Ask your cousin Pedro from Mexico to open a brokerage account for you if you know what I mean.