Friday, July 07, 2006

Catching stock price fever!

Several months ago I did the Sharebuilder deal where if you make one trade you get $50. So I bought $46 of this company I thought was interesting (ViaCell, they're a cord blood banking company with a huge research arm) and thought I would sit on it for a while. Well, I am both extremely impatient and averse to individual-stock risk. For some reason it upsets me that ViaCell's price went down (it was about $5 when I bought it) even though I know that it is a risky stock, but it doesn't bother me in the least when my risky mutual funds go up and down. In fact, I get excited when they go down because then I can buy more. I wanted to sell the shares but then discovered that while you can use the $4 end of day option to buy, you have to execute a $16 real-time trade to sell - and on what is now less than $35 worth of stock for me, I'd rather just hang on to it and see if it goes up, rather than just get $19.

Yesterday however I got an email from Sharebuilder offering me a complimentary real-time trade. Yaay! This meant that I could sell the stock and get all $35. But then I looked at the fine print, and discovered that I could hold on to the free trade for a couple months. So that got me thinking about what I could do with it... I think what I might do is to set a limit order for $5, and if it doesn't reach that price before the free trade expires, I'll just sell it with a regular order. I'm really not cut out for this checking and re-checking and keeping up with the company. I find all of this stuff that people do very interesting, and I kind of like researching companies to find good ones to buy, but then you have to continue to stay on top of what the company is up to in order to know when to sell. I know that for long-term strategy, you should just buy good stuff and sit on it, but I would rather buy shares of mutual funds where somebody else will pick the companies that I'm investing in, and swap them around when necessary. I think when I get the money back from the shares, I'll just put it in my Roth. More my speed, really.

4 comments:

Matt said...

But I like seeing the lonely "35" entry in your net worth statement!

Kira said...

Yeah, I just added it after realizing that it should be on there.. Most of the things on my net worth statement are blanks, as you have seen. =)

Jessica said...

kira! explain the mysteries of sharebuilder to me. ive had my account for over a year now and have no clue how to make it work...

how sad

Kira said...

Basically the idea with sharebuilder is that it is a lot cheaper to buy stocks ($4 per transaction) than other places because they wait until the end of the day every Tuesday, or something like that, to buy them. You have to set up a "sharebuilder plan" to buy stock but you can set it to just buy it once or whatever. So you pick the stock you want and pick a Tuesday to buy it, and put the money in your account plus $4 for the transaction. Ta-da, stock! Then it stays in your account until you sell it. You can also set up IRAs with them but I just have a regular account since IRAs are $25 a year. Regular accounts are free. You can upgrade and get x number of trades per month without paying the $4 fee, but then you have to pay a monthly fee.