Tuesday, January 6, 2009

Trading Tips For Coworker

One of my coworkers is getting the "stock trading itch" and asked me at the end of the day what I thought about eTrade. I'm going to talk him out of it, explaining that 80% of the professional traders do worse than the S&P500, with them spending their full day working at it. If that does not work, I'm going to give him these suggestions of places:
  • Zecco - I've heard of them a bunch, 10 free trades/month if your account asset value is at least $2,500 and have IRA account available (though $30/yr fee and $30 to close IRA account)
  • SogoTrade - I've never heard of this one prior to this morning, but found them from searching around. $3 trades, $50 to transfer account out, no minimum balance
My general suggestions for him are:

1. Make sure he has an emergency fund of at least 3 months of living expenses.
2. Make sure he is putting 3% into our work's SIMPLE IRA for 2009.
3. Make sure he has put away $5K for his 2008 IRA.
4. Hold off maxing up his 2009 IRA amount, since our employer may or may not match his 3% until the end of the year.
5. Don't trade any money that you will need in the next 3 years.

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