Questions From Newbies Like Me

[justbizness45]

OK folks, I understand what ETFs are and I have researched the basics on picking stocks. What do you look for when picking a ETF going long and short? Thanks, JB45

[etftalk]

I look at the charts and indicators, myself. I am not big on the fundementals. The fundies are usually built into the chart.

For example, if I am watching the S&P, whether I use SPY, SSO, SH, or SDS, etc., depends on the chart.

[Show-me]

OK folks, I understand what ETFs are and I have researched the basics on picking stocks. What do you look for when picking a ETF going long and short? Thanks, JB45


First thing is volume, volume, volume. The more volume the easier it is to trade in and out of. If a ETF trade 10,000 shares volume you may fight to sell at your price.

Second is KISS, start with you S&P chart and it only. Do your analysis and figure out if you think it will go up or down and for how long. Figure a price target and stop. Then use the appropriate ETF for long or short and how much leverage you what to use. I recommend a beginner stick with SPY and SH. After you get the feel move up to the SSO and SDS, then the BGU and BGZ.

[justbizness45]

First thing is volume, volume, volume. The more volume the easier it is to trade in and out of. If a ETF trade 10,000 shares volume you may fight to sell at your price.

Second is KISS, start with you S&P chart and it only. Do your analysis and figure out if you think it will go up or down and for how long. Figure a price target and stop. Then use the appropriate ETF for long or short and how much leverage you what to use. I recommend a beginner stick with SPY and SH. After you get the feel move up to the SSO and SDS, then the BGU and BGZ.

Tried to buy SLV today but my transaction was cancelled. I used a limit and no one want to sell @13.05. Tomorrow I am changing it to a GTC request instead of day and raising the price based on today's action. My understanding is that it will stay active for up to 30 days? Anyone know for sure?

[justbizness45]

How do you trade during the day and work? I am afraid the computer Nazi's will nail me for non government related internet use.

[justbizness45]

Lady, another tid bit on Zecco. No after hours trading offered. At least not yet.

[XL-entLady]

How do you trade during the day and work? I am afraid the computer Nazi's will nail me for non government related internet use.
That is just one of the blessings of being retired. I can look at the markets all day long (and usually do :toung:) without having the tattletale eye downloading and reporting to big brother. :bigsmile: I would never have dared do anything while I was still working. Just because you're paranoid doesn't mean they're not out to get you! :huh:

Lady

[XL-entLady]

Okay, here's a question that I'd love to have everybody's opinion on. I'm still a relative ETF newbie. And every time that someone mentions a stock symbol I have to google it to see what it is. Sometimes over and over again. :embarrest: It's the alzheimers. :rolleyes:

Is it practical for us to tag a stock symbol with some type of identifier when referring to it? :confused: Instead of just FAZ, saying "FAZ, the financial 3x bear" or something like that? Or should I just suck it up and build a cheatsheet? :nuts:

Lady

[etftalk]

Good idea! I'll try to remember.

[XL-entLady]

Here's another newbie question from me. I really like the long-term prospects of FXI, the China ETF. But I've never invested in a foreign ETF before and I'm clueless about the tax implications of the ETF and its dividends (and whatever else I probably should know that I don't). :embarrest:

Is it seriously different from other ETFs?

Teknobucks or Bullitt, can you shed some light here?

Lady

[XL-entLady]

I'm hearing more rumors about the uptick rule being reinstated. I started paying attention to ETFs after the uptick rule was yanked and I know nothing about it. I'll do my normal outside reading about it, of course, but would anyone care to give a quick and dirty thumbnail sketch of what it is and how it is used in trading?

Lady

[etftalk]

Once upon a time, you could not short a stock unless it saw an uptick in price. Shares used to trade in fractions so the uptick would have been something like an 1/8 or 1/16 of a dollar.

So, you could not sell short a stock if it's last tick was down. This kept traders from relentlessly pushing a price down. If you had an order to sell short at the market, you wouldn't get filled until the stock moved up in price.

Now that we trade stocks in pennies and fractions of pennies, I am not sure how they will implement the rule. Will stocks have to move a nickle, a dime, etc., before it can be shorted?

[XL-entLady]

I'm hearing more rumors about the uptick rule being reinstated. ...would anyone care to give a quick and dirty thumbnail sketch of what it is and how it is used in trading?

Lady


Once upon a time, you could not short a stock unless it saw an uptick in price. Shares used to trade in fractions so the uptick would have been something like an 1/8 or 1/16 of a dollar.

So, you could not sell short a stock if it's last tick was down. This kept traders from relentlessly pushing a price down. If you had an order to sell short at the market, you wouldn't get filled until the stock moved up in price.

Now that we trade stocks in pennies and fractions of pennies, I am not sure how they will implement the rule. Will stocks have to move a nickle, a dime, etc., before it can be shorted?
Thanks for the quick response! I love stories that start out 'once upon a time'! :bigsmile:

Lady

[Bullitt]

Here's another newbie question from me. I really like the long-term prospects of FXI, the China ETF. But I've never invested in a foreign ETF before and I'm clueless about the tax implications of the ETF and its dividends (and whatever else I probably should know that I don't).

Teknobucks or Bullitt, can you shed some light here?


You might have to pay foreign capital gains if pays out capital gains. If it pays dividends, same thing. I have a minor problem with an ETF I have that paid a foreign dividend and was reported on a modified tax form from Scottrade after I submitted my taxes and received my refund. What can you do? I think that was just a remote instance because half of my portfolio is in foreign stocks/ETF's and I've never had a problem. It's not that hard to report, Scottrade gives tells you what dividends are qualified and foreign and all that. You just have to type it in. I've owned DEO for a while and even when they paid a special dividend it wasn't a problem for me.

[Rod]

How do you trade during the day and work? I am afraid the computer Nazi's will nail me for non government related internet use.

I would recommend NOT using gov. computers to trade. Heck, I don't even access the forums while at work.

[XL-entLady]

You might have to pay foreign capital gains if pays out capital gains. If it pays dividends, same thing. I have a minor problem with an ETF I have that paid a foreign dividend and was reported on a modified tax form from Scottrade after I submitted my taxes and received my refund. What can you do? I think that was just a remote instance because half of my portfolio is in foreign stocks/ETF's and I've never had a problem. It's not that hard to report, Scottrade gives tells you what dividends are qualified and foreign and all that. You just have to type it in. I've owned DEO for a while and even when they paid a special dividend it wasn't a problem for me.
Thanks for the information, Bullitt. I'll just trust in my Scottrade and Turbotax then. :bigsmile:

Lady

[XL-entLady]

I just got an ad for a list of the top 40 dividend-paying stocks. And it made me wonder. Does anyone know where there is a list of the top dividend-paying ETFs?

Lady

[etftalk]

I just got an ad for a list of the top 40 dividend-paying stocks. And it made me wonder. Does anyone know where there is a list of the top dividend-paying ETFs?

http://seekingalpha.com/article/34939-26-dividend-paying-etfs-by-yield (http://seekingalpha.com/article/34939-26-dividend-paying-etfs-by-yield)

[XL-entLady]

IDoes anyone know where there is a list of the top dividend-paying ETFs?

Lady


http://seekingalpha.com/article/34939-26-dividend-paying-etfs-by-yield (http://seekingalpha.com/article/34939-26-dividend-paying-etfs-by-yield)
You're so good! :bigsmile: Thanks!

Lady

[XL-entLady]

Here's another newbie question. :embarrest:

I see that Vanguard's VIPERS have a seriously smaller expense ratio than, for example, iShares. So that's good, but there's got to be a down side. What is it?

TIA to anyone who can give me some insight!

Lady

[XL-entLady]

I see that Vanguard's VIPERS have a seriously smaller expense ratio than, for example, iShares. So that's good, but there's got to be a down side. What is it?

TIA to anyone who can give me some insight!

Lady
Okay, further research leads me to believe that Vanguard's ETFs are a shareclass of their open-end funds rather than stand-alones, and so may not be as tax efficient (according to The ETF Book, by Richard Ferri). So apparently Vanguard ETFs are a good thing in a Roth IRA but may not be a good thing in a traditional taxed account.

Maybe ..... ?:confused:

Lady

[XL-entLady]

Here's a question that highlights my greenhorn status. :embarrest: When dividends are paid, are they paid based on the percentage of time you held the stock or ETF during the payment period? Or is it just - everyone who owns that ETF on the date the dividend is paid gets the same percent payment?

lady

[etftalk]

I found this answer here (http://askville.amazon.com/Dividends-paid-Shareholder-Record-ex-dividend-date-declared-sell-stock/DiscussionPost.do?requestId=41076630&commentId=41097251&commentNumber=4&pageNumber=1).

"Dividends are paid to "The Shareholder of Record" when the ex-dividend date is declared...

You can sell the stock after that date (but before the dividend is paid out) and still get the dividend because you were the shareholder of record at that time...

Once the dividend is paid out the stock price reflects that dividend so the new owner, who did not get the dividend will still benefit from it..."

I'm not so sure about that last sentence so I am not sure about the credibility of the whole statement.

[XL-entLady]

Thank you, Tom! :)

Lady

[XL-entLady]

Is this a question I need to ask Scottrade? Or does someone here know the answer to this one?

When I try to set my stop on RHHBY (the Tamaflu company) I get a message that says:

"Unable to enter order because stop and stop limit orders are not allowed on Bulletin Board and Pink Sheet stock orders."

So can my broker enter a stop price for me, or is market price the only choice I have when I want to sell? That would be scary.

TIA to anyone who can shed some light on this one,
Lady

[etftalk]

You can probably set up an alarm to notify you when your price is close, but these micro-caps can be so illiquid, and the spreads between buy and sell quite wide, that they can be easily manipulated. They'd run your stop on you and hike the price right back up. It seems criminal, but they do it.

[USPSretired]

Okay, further research leads me to believe that Vanguard's ETFs are a shareclass of their open-end funds rather than stand-alones, and so may not be as tax efficient (according to The ETF Book, by Richard Ferri). So apparently Vanguard ETFs are a good thing in a Roth IRA but may not be a good thing in a traditional taxed account.

Maybe ..... ?:confused:

Lady

This touches on my newbie question (I chickened out starting my Scottrade accnt., until now, as I said I was going to in my introduction back in April. I'm not going to roll over my tsp just yet, but am ready to start with a smaller cash amount from my tax return. What type of account is the best to use if you want to be able, if needed, to withdraw earnings periodically (Individual accnt., std IRA or Roth). I've reviewed them on the Scott site but am still confused.:confused:--Ron

[XL-entLady]

This touches on my newbie question (I chickened out starting my Scottrade accnt., until now, as I said I was going to in my introduction back in April. I'm not going to roll over my tsp just yet, but am ready to start with a smaller cash amount from my tax return. What type of account is the best to use if you want to be able, if needed, to withdraw earnings periodically (Individual accnt., std IRA or Roth). I've reviewed them on the Scott site but am still confused.:confused:--Ron
You're smart not to rollover your TSP until you've 'practiced' on a smaller account, such as tax return money. And it's hard to say which account would work best for you to withdraw from because it depends on individual circumstances. If you're over 59 1/2 years of age, then I would suggest you consider opening a Roth or a standard IRA. And your best choice between those two would depend on your tax circumstances.

BTW, when you get ready to roll your TSP into a Scottrade or other outside account, my understanding of the rules is that you can't put TSP $ into a Roth unless you're prepared to pay the taxes when you rollover. But you can rollover TSP into a regular IRA and then just pay the taxes on your yearly withdrawals. (Anyone who has a different understanding, please correct me.)

Good luck,
Lady

[USPSretired]

You're smart not to rollover your TSP until you've 'practiced' on a smaller account, such as tax return money. And it's hard to say which account would work best for you to withdraw from because it depends on individual circumstances. If you're over 59 1/2 years of age, then I would suggest you consider opening a Roth or a standard IRA. And your best choice between those two would depend on your tax circumstances.

BTW, when you get ready to roll your TSP into a Scottrade or other outside account, my understanding of the rules is that you can't put TSP $ into a Roth unless you're prepared to pay the taxes when you rollover. But you can rollover TSP into a regular IRA and then just pay the taxes on your yearly withdrawals. (Anyone who has a different understanding, please correct me.)

Good luck,
Lady

Thanks again Lady. Am I correct in understanding that the minimum Roth deposit is $5000?

[USPSretired]

Another quick question do you suggest going with a joint account so your spouse could take over if necessary?

[XL-entLady]

Thanks again Lady. Am I correct in understanding that the minimum Roth deposit is $5000?
Actually I think that the maximum Roth contribution per year is $5,000 (plus $1,000 catch-up contribution if you're old enough). But I'd Google that to make sure because I'm not positive.

Lady

[USPSretired]

Actually I think that the maximum Roth contribution per year is $5,000 (plus $1,000 catch-up contribution if you're old enough). But I'd Google that to make sure because I'm not positive.

Lady

I found that to be correct. Thanks again for the info. I completed my online application about an hour ago and will be wiring funds and hopefully making my first buys tomorrow.

Ron:bigsmile: