Daytrading. Nearly all the personal finance books I’ve read say that daytrading is a BAD idea. They give three reasons why this is the case: 1) daytrading subjects your investment to short term capital gains taxes, 2) short holding periods rule out large returns and 3) high trading costs reduce profits.

That said, since Miel and I sold our shares in the Hansens Natural Corporation, I have been daytrading and have lost a good deal of money. After trading the Exxon Mobil Corp. (XOM) and taking it on the chin in the amount of $2,622, I made about $180 trading Frontier Oil Corp (FTO). After that, I then made another $660 from Evercore Partners (EVR). Despite two winning trades, the bottom line is I’m down $1,944.

So, in the hope of salvaging something from my losses, I offer my bad behavior as an example.

DON’T DAYTRADE.

Instead, follow a prudent buy and hold strategy. Thoroughly research your investments and market conditions prior to investing.

Hope this helps,

James.

MANAGE YOUR MONEY TOGETHER

Here are some simple guidelines for DINKS to build wealth:

1) Collaborate: Meet regularly to talk about money, set goals together, track and monitor them.

2) Understand and respect your partner. Take time to understand your partners values about money.

3) Watch the numbers. Get a budget, monitor your spending and track your net worth.

4) Max your retirement. Maximize contributions to your tax deferred retirement accounts.

5) Invest in stock. Stocks perform better than bonds or cash.

6) Avoid high interest debt. Credit cards and title loans are financial cancer.

7) Diversify. Don't put all your eggs in one basket.

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