Do investors sometimes buy and sell the same stock several times over again?

Question

Is that sound practice at times?

Answer 1

1) Yes.
2) Yes.

Answer 2

1

Answer 3

Yes, of course. I agree with many of the others answering in the affirmative, but add a point or two.

You can be a long term investor in a particular stock and still swing trade it. You don't have to sell all of your position. Selling and re-purchasing later doesn't necessarily make you a short term trader. I've owned GM and UNH for a few years still done some trading of shares. In some cases it might take 6 months or more between trades.

2 examples: Several weeks ago BBBB reached $46/share which was crazy high. If I was heavily invested, I would have sold a portion, but unfortunately my investment was too light to begin with.

In early 2007 Microsoft finally released the Vista OS. Its stock price ALWAYS peaks when they release a new OS. It is really dumb to say to yourself that "I'm a long term investor & therefore I can't sell." Sell a small portion. Buy it back later at a cheaper price.

Answer 4

Hi,
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Answer 5

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Answer 6

In contrast to what another answerer posted, you are allowed to sell a stock and rebuy it whenever, even within 30 days. But, you are not allowed to sell a stock and take a loss and then rebuy it within 30 days. Meaning, you are not allowed to report the loss in order to save money on tax. It is called the wash-sale rule.

So for example, say you sell 100 shares of IBM at a $3,000 loss, and rebuy 100 shares within 30 days, then you will not be able to report the $3,000 as a loss when it comes time to do your taxes.

Answer 7

In general its better to buy and hold a stock (because of commissions and tax consequences and the fact that most people aren't really good at timing the market) but there's nothing to stop you from buying and selling a stock multiple times.

Answer 8

dr death got it wrong there is no rule that says you cannot trade the same stock. However if you sell it at a loss and reacquire it withing 30 days then for tax purposes you cannot take the entire loss of the sale. I have done it a few times but this bear market took me out of the game for a few days.

Answer 9

A short term investor may do this. Long term investors (those saving for retirement, etc.) usually keep thier money in a stock or mutual fund for years, regardless of market fluctuations.

Answer 10

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Answer 11

I personally would classify that as trading. I would consider investing as something done over a longer time frame.

Day trading, swing trading, position trading, etc. are all considered relatively short term in nature.

Neither is "right" or "wrong" but more a matter of your style and goals. Money can be made or lost doing either.