Hey all, I have been browsing the forums and the thousands of threads but haven't found what I am looking for so I am here looking for some help. I made the leap to career trader about a month ago and have been fairly successful so far. (Knock on wood.) Obviously this is successful by my standards and probably not the standards of everyone here. What I am looking for advice with is what to do with surplus cash in my account. I have an account with Interactive Brokers that I started with $10k that I have so far increased to the $20k range (again knock on wood.) With how I am trading I don't need more than the original amount for the leveraged trading so I was trying to figure out something safe to do with the rest. The only requirements are that I want capital preservation and I would like to earn more than the interest rate that IB offers. I was thinking of investing in blue chips like Citibank, GE, etc as they all seem to be at or near 52 week lows and, as blue chips, are probably not likely to go under. Alternatively, if someone already covered this in a thread that I missed I would appreciated being pointed towards it. Cheers
1) Maintain a "larger" cash reserve. One of these days, you WILL need it. 2) Increase your position size so that you don't become "anchored" to having a $10,000 account. 3) Instead of drinking Johnnie Walker Red Label, buy a 200ml bottle of black label and gold label as a small reward for yourself.
I realize that eventually I will need a larger cash reserve but assuming I invest in something like a blue chip/dividend stock, those stocks are the same as cash in that I should be able to cash them out at anytime for nearly what I paid for them. I do intend to raise the position size but, like I mentioned, I have only been at this full-time for a month and I was planning on scaling up after 3 months providing continuing success. I am not a huge Johnny Walker fan. I prefer Lagavulin.
Sell covered calls in one of your "Blue Chip" stocks that could never go down. IMO, nothing wrong with having CASH, of course if it's USD, that loses value!
Be ready for the 75%+ draw downs that occur 99% of the time after doubling your money that damn quick.
I didn't say that blue chips couldn't go down. I am just looking for some advice to see if there is any way to earn a higher interest rate on idle cash. I am pretty unfamiliar with bonds and other dividend mechanisms so I was hoping someone would know if those would fit the bill of what I am looking for or if there is something else. I have looked into ETF's somewhat and I will definitely dig a little deeper. Thanks I appreciate the well wishes but hopefully there won't be a 75% draw down.
Build up the cash reserve. Blue chips can turn into cow chips if you get overconfident and sloppy. Try green label or blue label instead.
Groosh, Gr8 going.Plz 1st stash cash for 3 Start-Up capital.Survival is more imp. & sincerely plan Cash only now until 3*10k is achived,the path you have traversed is littered with tears of blood,no Blue or Gold Label now ; only after 3*10k is achieved. Actually we Indian are more pragmatic & never live on plastic money,hence this suggestion may not be liked but for any Full time trader it is my moral responsibility to speak even when uncalled for. Excellent ,keep it up. Asish