balance/gains/loses

[optiuser7]

jus a general questio. how much balance is safe to maintain in the brokerage accounts. Do you all cash in the gains or reinvest in other stocks?
I am new to this calculations/details . any thoughts?

[microhedge]

There are too many schools of thought on that one to even think about...

It comes down to personal tolerance balanced with the fact that it takes money to make money so obviously reivesting gains with diligence is beneficial.

At times I am 99% invested/reinvested and stay so for months at a time, other times I slowly take gains and get them out of play... and go play.

You do have to set guidelines for yourself or you will blow through cash like a drunken sailor, trading has the same habits as the craps table... high on the hog and happy, reinvest and walk away broke.

Decide early what your tolerances are and keep your brokerage account at a certain level for awhile until you decide what's right for you. Try maintaining say $5000 in cash and securities, when you do well and gain, take your gains out. Only start reinvesting when you have established a good track record of success and you are a little more sure of yourself.

This advice from a been-there-done-that... I was fortunate enough to start out with $25,000 of play money 3 years ago... I had a blast making and re-investing and gaining and reinvesting... less than 4mos. later I had a balance of $732 in my account... cash + secs:oops:

[aiki14]

jus a general questio. how much balance is safe to maintain in the brokerage accounts. Do you all cash in the gains or reinvest in other stocks?
I am new to this calculations/details . any thoughts?

None of the brokerages have gone under in a very long time. 100k is protected by SIPC, at Merrill they have 2 banks so it's 200k per account. If you use a full service broker it is extremely unlikely you'll get burned by default. Merrill has 1 trillion under management, GS even more I believe, not too much risk.
I haven't worried about that, I might be more worried in a small regional bank with mortgage exposure, or a discount brokerage, but even then you're likely to be ok.

[aiki14]

Reading microhedges post, I may have misunderstood the question.

[microhedge]

None of the brokerages have gone under in a very long time. 100k is protected by SIPC, at Merrill they have 2 banks so it's 200k per account. If you use a full service broker it is extremely unlikely you'll get burned by default. Merrill has 1 trillion under management, GS even more I believe, not too much risk.
I haven't worried about that, I might be more worried in a small regional bank with mortgage exposure, or a discount brokerage, but even then you're likely to be ok.

Looks like I may have misunderstood the question of what's "safe?" when he said he was "new"... oh well, good info anyway:)

[optiuser7]

all really very gud info.
I think brokerage firms like scottrade and ameritrade also protect upto $100k for the cash account.
Dunno about the margin account though.


what are the discount brokerage firms?

[aiki14]

all really very gud info.
I think brokerage firms like scottrade and ameritrade also protect upto $100k for the cash account.
Dunno about the margin account though.


what are the discount brokerage firms?

The two you named, and others like them. The full service brokers are the ones that offer wrap accounts, financial planning, and other services. They are Merrill Lynch, Morgan Stanley, etc.