Disclaimer: I am not a financial advisor, please consult your financial advisor or do your own research
before applying any of my monetary strategies to your own situation.
Everyone is raving about GameStop, next was AMC movie theaters, then Blackberry. Right now, in this very second, the hot thing is Dogecoin, a sketchy cryptocurrency. Should you join the rollercoaster? Probably not and here’s why.
Are you already familiar with trading stocks, options, short selling, limit orders, and the high speed at which these stocks turnover? The general public would not understand half of that last sentence, and that’s OK! I’m not a pro either. The most important thing to keep in mind is you have to be comfortable with the risk of losing ALL of your cost basis (that’s the money you put in to begin with). Most people are not comfortable with that level of risk, and you shouldn’t be either.
Photo by Clay Banks on Unsplash
A few other things to keep in mind:
- Taxes on short term capital gains can be anywhere from 10% to 37% depending on your income tax bracket.
- If you sell the stock at a gain, you also have to pay tax on the gain. Once you determine your gain less the taxes, you now know how much of the gain you can actually put in your pocket. Was it worth the stress?
All this to say, don’t be afraid to dabble in the stock market. I enjoy the benefits of the stock market from a long term perspective and thoroughly research my choices to ensure a diverse portfolio that matches the level of risk I am willing to accept. Do you have a different perspective? Let me know in the comments below!
Happy Trading!