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Thread: Dubble Doh's Account

  1. #1

    Join Date
    Apr 2011
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    4

    Default Re: wwwtractor's Account

    Greetings, by all means, please feel free to comment:
    I read your comments regarding ETF’s in your Roth with Fidelity. I have been retired for two years and made a one-time withdrawal from TSP upon retirement. I’m seriously considering a full withdrawal via “gentle” monthly roll-overs into a traditional IRA, then convert monthly into a Roth. My main purpose in handling it this way is to eventually have all of my TSP in a generational/stretch Roth IRA and to manage my taxes on a yearly basis as I make the conversions. I understand that I have to deplete my TSP within 120 months (IRS rule for roll-over IRA eligibility). I want to buy mostly ETF’s that mimic the TSP funds and a few others, this method can also serve as a form of dollar cost averaging. I’ve had a Roth with TD Ameritrade for about 15 years (all stocks) and have about decided that their short –term trading fee of $19.99 for buying or selling the commission-free ETF’s within 30 days along with their rather high expense ratios is prohibitive. I’m also looking at Fidelity, Schwab and Vanguard but leaning more toward Fidelity. If you were in my shoes, with which of these three investment firms would you open your IRA’s? Fidelity, Schwab and TD Ameritrade all have offices within 15 miles of my home. The drawback with Vanguard is that there will be no face-to-face interaction, seminars, they fact that they are so dang big, etc. With Fidelity when you sell do you have to wait 3 or 4 business days to settle before you can re-invest these same proceeds? No short-term trading fees right? Do you buy any ETF’s that mimic C, S, I, G and F? If so, what are they? What other tidbits can you offer regarding Fidelity or the other firms and your strategies for investing in ETF’s? If you were just now opening a Roth, would you still open it with Fidelity?
    I’ve read tons of info on these firms' websites and it’still tough to make a decision on which one. All comments and opinions will be appreciated.


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  3. #2

    Join Date
    Dec 2007
    Posts
    906

    Default Dubble Doh's Account

    Welcome Dubble Doh!

    I use Scottrade and am not familiar with the ones you mentioned. $7 trades and fair analysis. I'm sure there's better but I am comfortable with Scotrade and their fees.

    For a list of ETFs that might mimic the TSP funds, see Trader Fred's page.... http://www.etftalk.com/premiums/trader_fred/fred.php

    I use mostly:
    SSO (C fund x 2)
    TNA (small caps x 3)
    EFA (I-fund)
    AGG (F-fund)

    Then on the short side I trade:
    SDS (Short the C fund x 2)
    TZA (Short the small caps x 3)

    The IRA trading rules (without margin) require finds to settle before you can sell again. In other words:

    Buy ABC - ok
    Sell ABC - ok
    Buy XYZ with proceeds from sale of ABC - ok
    Sell XYZ - not until 3rd day after ABC sale.

    Otherwise it is a "free ride" trade and you can get a slap on the rist and an eventually they could cancel your account.
    -- Tom | My Trades

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  5. #3

    Join Date
    Jul 2010
    Location
    Alexandria, VA
    Posts
    40

    Default Re: Dubble Doh's Account

    So the people that make hundreds of trades a day are only trading on margin?

    I know you have to wait 3 days for it to settle without margin, but when trading on margin you are basically using their money... is that why unsettled trades are allowed?

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  7. #4

    Join Date
    Dec 2007
    Posts
    906

    Default Re: Dubble Doh's Account

    Quote Originally Posted by peterson82 View Post
    So the people that make hundreds of trades a day are only trading on margin?
    Most likely. If you have a margin account with $25K in it you can pretty much do anything. They call that a day trading account.

    I guess I should mention that the waiting of the settlement date is only if you are using the same funds (money) to make the trades.

    You could actually make as many trades as you want as long as the money is available in your account. So if you had a million dollar account and only used $50K on each trade, you could buy 20 stocks, sell those 20 stocks, and buy another 20 stocks, all in the same day, but then you'd have to wait the 3 days to sell them again. If you only traded $100K a day, you probably wouldn't have to worry about the settlement dates since you would have funds available in your account.
    Quote Originally Posted by peterson82 View Post
    I know you have to wait 3 days for it to settle without margin, but when trading on margin you are basically using their money... is that why unsettled trades are allowed?
    With margin, you just have more funds available to trade so the restrictions aren't as apparent. But unless you have a $25,000 account there are restrictions either way.

    I hope that makes sense.
    -- Tom | My Trades

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  9. #5

    Join Date
    Apr 2011
    Posts
    4

    Default Re: Dubble Doh's Account

    Thanks etftalk. I will not be trading with a margin account. It appears that I will need to keep some powder dry in order to take advantage of dips. My TSP account is always fully invested but that may not be the best way to manage this account once I have rolled a sizeable amount over to the IRA.

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  11. #6

    Join Date
    Feb 2009
    Location
    MS
    Posts
    33

    Default Re: wwwtractor's Account

    My family has used Fidelity for years. l like the free trades in certain ETFs. Otherwise, it is $7.95 per trade and I do sell and buy as soon as the money is available for the next purchase which is usually almost immediately.

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  13. #7
    alevin Guest
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    Default Re: Dubble Doh's Account

    Quote Originally Posted by etftalk View Post
    I should mention that the waiting of the settlement date is only if you are using the same funds (money) to make the trades.

    You could actually make as many trades as you want as long as the money is available in your account. So if you had a million dollar account and only used $50K on each trade, you could buy 20 stocks, sell those 20 stocks, and buy another 20 stocks, all in the same day, but then you'd have to wait the 3 days to sell them again.
    I hope that makes sense.
    well, this I hadn't figured out yet, so glad somebody else asked enough questions to bring out the fine details. I'm not on margin and I thought I had to wait the 3 days after selling, before I could buy with the same $. learn something new ever day. so if I buy something same day as I sell-same funds, I can't put a stop on the new buy, I guess. since that stop might trigger before the 3 days are up?

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  15. #8

    Join Date
    Dec 2007
    Posts
    906

    Default Re: Dubble Doh's Account

    Quote Originally Posted by alevin View Post
    I thought I had to wait the 3 days after selling, before I could buy with the same $. learn something new ever day. so if I buy something same day as I sell-same funds, I can't put a stop on the new buy, I guess. since that stop might trigger before the 3 days are up?
    You can physically put a stop on, but if it gets hit within 3 days you'll get that warning or an account suspension, so it may not be worth it. But the threat of losing $1000's or more, because you have no stop, may be more of a risk.

    I have found that if I am considering selling a position, I am more apt to pull the trigger if it's late in the day because I know that once the market closes, I have one of the 3 days out of the way.

    This is important for my style since I am rarely in cash. I am either long or short, in stocks, or a metal ETF, or using VXX as a short, etc. I rarely sit very long with cash unless the market has me really confused.
    -- Tom | My Trades

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  17. #9

    Join Date
    Apr 2011
    Posts
    4

    Default Re: wwwtractor's Account

    Quote Originally Posted by wwwtractor View Post
    My family has used Fidelity for years. l like the free trades in certain ETFs. Otherwise, it is $7.95 per trade and I do sell and buy as soon as the money is available for the next purchase which is usually almost immediately.

    I decided to open my accounts with Vanguard, mainly because some of their ETF expense ratios are about one-half the cost of Fidelity's. Vanguard also has free trades on certain ETF's and about $7.00 for other trades. I am doing the monthly withdrawals from TSP into the traditional IRA and then monthly conversions into the Roth. Believe it or not, it takes a total of 19 days from the time TSP cuts the check until it arrives at Vanguard, sits for 4 or 5 days then finally a trade can take place. Hopefully, the timing for having these funds out of the market will be in my favor more often than not. So far, I have purchased SLV, VDE (energy) and VHT (health care). I would like to increase my holdings by occasionally selling somewhere near the high and buying low. At this point, I'm trying to decide what to buy next month. Will look forward to reading you posts in the future. (There has not been very much activity here lately.)


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