LOL!
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jun 25, 2005
- Messages
- 10,252
For my trades, the cost is essentially zero, otherwise I would be figuring out a way to make it zero. As I noted before:What's the real economic cost of trading ?
What's your tax rate ? I suspect you are paying 40 percent of profits to fed and state taxes on these short term trades.
You are bumping up agi - eg, does that impact your obamacare subsidies ?
Any other implicit costs ? Such as the stress when a trade goes haywire. ?
1. I pay no commissions because I have a few brokers that have no commissions on mutual funds, ETFs, and stocks. They give me no commissions because I follow their rules or they have given me bonuses for transferring money into my account there. Specifically:
TDAmeritrade: No commissions on about 100 ETFs (see their web page)
WellsTrade: No commissions for 100 free trades per account per year, so with 5 accounts that is 500 free trades. This is because I am grandfathered into their free-everything PMA package (see their web page).
Vanguard: Of course no commissions on Vanguard products
Fidelity: No commissions on many iShare ETFs and Fidelity mutual funds.
2. Some brokers have frequent trading restrictions that I avoid. For instance, TDAmeritrade would have you pay a commission on those no-commission ETFs if you don't hold them at least 30 days. The way around that is to buy in one account and sell in another account. I could buy in my 401(k) and sell in my IRA. Or buy in my Roth and sell in my spouse's traditional IRA.
3. I pay no taxes on short-term trades because I am doing this either in tax-advantaged accounts like IRAs or 401(k)s or if I do a trade in taxable account, then I am tax-loss harvesting or using up a carryover loss to offset any realized capital gain. For instance, I can buy VXF in my 401(k), but sell VTI for a loss in my taxable, so no wash sale.
4. I am unconcerned about health insurance subsidies because I am not eligible for them. As noted in #3, I do not increase my AGI because of these trades.
Does this all make sense?