Trading

Matters

Session NINE

(bonus)

Trading Matters: The participants will gain the insights and skills necessary to trade stocks and cryptocurrencies as a way to take investing a step further wisely.

Session Goal

Topics Covered in This Session

​

• The basics of trading: stocks, forex, and cryptocurrencies
• Risks and rewards: balancing potential gains with stewardship principles
• Tools and resources for trading: platforms and strategies
• Ethical trading: avoiding greed and practicing contentment

​

DOWNLOAD this session’s handout (Doc tab 09-Trading Matters)

​

“This seminar reflects my perspectives, experiences, and research on Money Matters. I don’t always do it right. My purpose is to provide educational information to aid you in making sensible financial decisions and developing wise financial habits as a disciple of Jesus. For personalized advice, please consult a qualified financial professional.”

• Evaluate if you are adequately insured on the Goldilocks’ Scale: not too little, not too much, but just right.
• Do a comparison with your home and auto policy.
• Increase your emergency fund so that you can insure yourself for more situations.
• Video your entire home, just in case.

​

How did you do? What did you learn?

​

​

​

FROM LAST WEEK

Biblical Wisdom

Humbly allowing the text to shape our mindsets and practices on our financial journeys

​

“Again, it will be like a man going on a journey, who called his servants and entrusted his wealth to them. To one he gave five bags of gold, to another two bags, and to another one bag, each according to his ability. Then he went on his journey. The man who had received five bags of gold went at once and put his money to work and gained five bags more. So also, the one with two bags of gold gained two more. But the man who had received one bag went off, dug a hole in the ground and hid his master’s money.

​

Matt 25:14-30

“After a long time the master of those servants returned and settled accounts with them.

​

• 5 bags of gold was invested and made 5 more bags
• 2 bags of gold was invested and made 2 more
• 1 bag of gold was buried and made nothing.

​

The Master said well done to the first two men, but to the last man he said, ‘You wicked, lazy servant! …. You should have deposited my money with the bankers, so I would have received it back with interest.

.

​

Matt 25:14-30

“Steady plodding brings prosperity; hasty speculation brings poverty” (TLB)

Proverbs 21:5

TRADING STOCKS

• This isn’t for everyone.
• It’s important to understand the basics of how stock trading works because of your own 401k and other investments.
• To trade stocks, you need to do your homework and pay attention to them. If you don’t have time or interest to do that, don’t trade stocks. Just stick with a low cost index fund or ETF. For most people, buying a couple of index funds or ETFs (exchange traded funds) and forgetting about them is better.

​

TRADING STOCKS

• Suggestions:
• Basic, Safe Suggestion:
• VOO or VOOG (Tracks Nasdaq)-Low cost
• Fidelity 500 Index Fund (FXAIX) (tracks S&P) Avg 11%
• Balanced Aggressive Portfolio (has volatility):
• 50% in large cap growth stocks - Vanguard’s VIGAX
• 20% in US small cap stocks - iShares Russell 2000 ETF IWM
• 30% in International stocks - Vanguard FTSE or VEA
• HOWEVER, if you do have some extra time and have the interest, then let’s learn…

What’s your level?

Like we have discussed in the past, risk is involved in risk. Trading stocks takes on more of risk. You must be careful and wise and learn as much as you can. Otherwise, you could lose money.

How Does the Stock Market Work?

​

[4:29 min]

How Does the Stock Market Work?

Reflection

What Were the Key Points?

_________________________________________________

_________________________________________________

_________________________________________________

​

Questions: What Didn’t Make Sense?

Investing

Matters

Session FIVE

Please refer to this session for a basic understanding of investments and trading stocks. This session will build on that session.

WHAT IS TRADING?

• Buying and selling stocks on an exchange (like the NYSE or NASDAQ), usually through a brokerage account (like E-trade, Fidelity, Robinhood, Schwab)
• It used to cost $9.99 to buy stock and $9.99 to sell stock. You would never just buy one stock: it would have cost you $20. You would have had a 21% return (on $100 stock) just to make any money. It was hard to just get started.
• Today, because of Robinhood brokerage that forced all of the other brokerage accounts to move to $0 fee to trade stocks.

​

See the Trading Matters session for above explanations

A Stock (or equity) is a tiny part of a company that gives investors ownership and potential growth through price appreciation and dividends.

​

If you buy one stock of Apple, then you own 1 piece of a 15.02 billion piece cake.

A Stock and Different Types of Stocks

(from Investing Matters)

The Differences Between Investing and Trading

• Ticker Symbol - A unique abbreviation for a stock (e.g., AAPL for Apple).
• Buy - Purchasing a stock, ETF, or asset to own it.
• Sell - Exchanging an owned stock or asset for cash.
• Buy/Sell in Dollars - You specify how much money you want to invest or withdraw (e.g., $100 worth of Apple stock).
• Buy/Sell in Shares - You specify how many shares you want to buy or sell (e.g., 5 shares of Apple).
• Bid & Ask - Bid = what buyers offer; Ask = what sellers want.
• Spread - The difference between bid and ask prices.
• Volume - Number of shares traded in a day.

Key Terms

Basic Trading Terms

• Order types
1. Market Order - Buys or sells a stock at the best available price.
2. Limit Order - Sets a specific price to buy or sell a stock.
3. Good Till Cancelled Order (GTC) - An order that stays active until it’s filled or canceled (often up to 60–90 days).
4. Day Order - An order that expires if not executed by the end of the trading day.

Key Terms

Basic Trading Terms

• Orders that limit risk
• Stop-loss - An order to sell a stock automatically if it drops to a certain price, limiting your loss.
• Trailing Stop Order - A stop-loss that moves with the stock price—if the stock rises, your stop price rises too.
• Stop Order (a.k.a. stop-loss order) - Triggers a market order when a stock hits a specific price.
• Stop Limit Order - Combines a stop order and a limit order—once triggered, it only sells at your set price or better.

Key Terms

Basic Trading Terms

• Riskier activity. Beware.
• Margin - Borrowing money from a broker to buy stocks—magnifies gains and losses.
• Day Trading - Buying and selling stocks within the same trading day to profit from short-term price changes.
• Call Options - A contract that gives you the right (not obligation) to buy a stock at a set price before a certain date—often used to speculate or hedge. (YOU CAN LOSE YOUR SHIRT ON THIS!!!)

Key Terms

Basic Trading Terms

• Types of Trading
• Stock - A share of ownership in a company; gives you a claim on part of its assets and earnings.
• ETFs (Exchange-Traded Funds) - Investment funds that trade like stocks and hold a basket of assets (e.g., S&P 500 companies). Bought and sold during the day.
• Index Fund - A mutual fund or basket of stocks designed to track a specific market index (e.g., the S&P 500).
• Actively managed mutual funds try to outperform the market by selecting investments. More expensive.
• Passively managed mutual funds aim to match the performance of an index (like the S&P 500). Cheaper.

Key Terms

Basic Trading Terms

• Bull Market - A market that’s going up over time.
• Bear Market - A market that’s going down over time.
• Volatility - How much a stock price moves up/down.
• Broker - The platform or person that facilitates buying/selling stocks.
• Portfolio - All the stocks and assets a person owns.
• IPO (Initial Public Offering) - The first time a private company offers its stock to the public. Hard to get in at low cost.
• Diversification - Owning a mix of different investments and from different sectors to reduce risk.
• Dividend - A portion of company profits paid to shareholders. Some companies pay a dividend. Some reinvest in themselves.

Key Terms

Basic Trading Terms

What is the ex-dividend date for a Dividend Paying Stock

The ex-dividend date is the date on which a stock begins trading without the value of its next dividend payment. If you buy the stock on or after the ex-dividend date, you will not receive the upcoming dividend. Instead, the seller will receive it. Therefore, you must buy the stock before the ex-dividend date.

Check Dividends at Dividend.com & have an email sent for the stocks you want to buy.

The 11 Stock Market Sectors

The 11 Stock Market Sectors

1. Communication Services: Alphabet (GOOGL), META, Netflix, Disney
2. Consumer Discretionary: Amazon, Tesla, McDonalds, Home Depot, TJX, Ford
3. Consumer Staples: Walmart, Costco, Procter & Gamble, The Coca‑Cola Company, PepsiCo (Great for recessions)
4. Energy: Exxon Mobil, Chevron, ConocoPhillips
5. Financials: Berkshire Hathaway, JPMorgan Chase, Bank of America, Wells Fargo, Visa, Morgan Stanley, SOFI
6. Health Care: Lilly, Johnson & Johnson, Pfizer, UnitedHealth, Bristol-Myers
7. Industrials: Caterpillar, Honeywell, Raytheon, Lockheed Martin, Boeing
8. Information Technology: Apple, Microsoft, Nvidia, Broadcom, AMD, Salesforce
9. Materials: Dow, DuPont de Nemours, Newmont Corporation (Gold mining)
10. Real Estate: American Tower, Prologis, Simon Property Group,
11. Utilities: NextEra Energy, Duke Energy, Southern Company, American Power

Listen on any podcast app or on CNBC app for free.

• Diversify, diversify, diversify - Stocks trade together, which makes sector risk one of the biggest challenges investors face. Nearly 50% of a stock's action, up or down, comes from the sector it's in.
• Do Your Homework - Making money in the stock market doesn't just happen, it takes a little work -- homework, that is. If you don't have at least an hour a week to dedicate to your portfolio, Cramer said you're probably better off investing in a good S&P 500 index fund (e.g., VOO) . You have to visit a company's website and learn about what it does. Then you have to listen to the conference calls and know what the analysts are saying and what's in the news. Only then can you truly understand why you'd want to own it and what you should expect from it. (I don’t always do that!)

​

Jim Cramer’s Insights

BULLS make money

BEARS make money

PIGS get slaughtered

Here’s the meaning of this classic Wall Street adage that warns against greed in investing:

• Bulls make money – Investors who are optimistic (bulls) and bet on rising markets can profit by buying stocks, holding them, and selling when prices increase.
• Bears make money – Investors who are pessimistic (bears) can also make money by short-selling or investing in assets that gain value when markets decline.
• Pigs get slaughtered – Greedy investors (pigs) who chase excessive gains, take reckless risks or refuse to take profits when they should often end up losing everything

• Take the Emotions Out of It - “You are often your worst enemy" and second, "no one ever made a dime panicking."Humans are full of emotions, but emotions are not part of investing. If you've done your homework, then you know what you own, why you own it and when you plan to sell it. Don't let emotions make you deviate from your plan. (On down days, good companies are a bargain!)
• It’s Okay to Sell Losers - It's all too easy to get defensive when your stocks are falling, but it's important to remain logical and ask yourself if your homework thesis still fits the current environment. If not, then it's time to sell those laggards at the next sign of strength and move onto what's working. If you don't have a catalyst, or reason to own a stock, it shouldn't be in your portfolio.

Jim Cramer’s Insights

• Don't buy all at once. Never sell all at once, either. You'll never be good enough to time the market perfectly, Cramer cautioned, and if you're wrong, you'll be really wrong. That's why it's always better to buy in stages. Your goal is to get the best price over time, not the best price for today. Be patient, and wait for opportunities to arise
• Taxes - It's OK to pay taxes on your gains. Too many times investors refuse to lock in gains for fears of a big tax bill. But Cramer cautioned that it's better to have a taxable profit than no profit at all. Cramer's bottom line? Make peace with the tax man and don't get greedy.

Jim Cramer’s Insights

BUYING STOCKS

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

If I am going to buy a stock and let’s say I have $1000 I want to spend on that stock, I often times won’t spend it all at one time.

• Often times I will nibble at it Let’s say that one stock ($) is $50, so I may 1 and then a couple more a few days later if it drops $$$.
• If it goes down, I may buy more $$$$$$.
• If it goes down more, I may be even more $$$$$$$$$$
• Then I’ll back the truck up! $$$$$$$$$$$$$$$$
• IF, however, after that one stock goes up, I will let it run and wait for a pull back. If it doesn’t pull back, then I have a few shares.
• If it takes off and I really want in it, I may buy at a higher cost but not many.

This is one strategy I use. But not always!

SELLING STOCKS

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

When selling stock, I often will use the reverse strategy. Let’s say I have held a year and 1 day (so that I won’t be paying taxes on it) and I have made 50% return, then I may sell 1 or 2 stocks. (If it drops, I may sell more in fears it will really drop, but normally I just hold it.

• If it goes up a little more, then I may sell 3 more stocks.
• If it goes up a bit more, then I may sell 6 more.
• If I want out of the position, then I can sell more as it goes up.

However, once a stock grows to 50%, I often will take out what I invested (say $1000) and then play with the house’s money, so to speak. I still have my $500 profit that I can ride up or if it drops, I still made good money.

$

This is one strategy I use. But not always!

Step 1: Set Your Goals

• Are you investing long-term or trading short-term?
• What’s your risk tolerance?

​

Step 2: Choose a Brokerage Company/Platform

• Examples: Fidelity, Charles Schwab, Robinhood, TD Ameritrade, E*TRADE.
• Look at: fees, ease of use, research tools, mobile access.
• Get a link from Robinhood if you want to use this Broker. Simple to use.

Receive an invite and both you and the inviter get a free partial stock that could be worth from $5-$200

Step 3: Choose the Type of Fund

• Brokerage Account - You create the basket of stocks in your portfolio
• Remember taxes
• Short-term gains - you will pay taxes based on your tax rate
• Long-term gains - for most of our tax brackets, there is NO taxes collected. It will increase your total income.
• Roth IRA - Invest post tax money. You can trade in this fund with no tax implications.
• HSA - Invest in a triple tax advantage Health Savings Account (if you qualify).

​

Step 4: Fund Your Account

• Link a bank account and deposit funds.
• Start small, especially if new to trading.

​

Step 5: Do Research Before You Trade

• Learn about the company (earnings, competitors, industry).
• Make a shopping list in different sectors (here are some recommendations:
• Communication Services: Alphabet (GOOGL), META
• Consumer Discretionary: Amazon, Tesla, McDonalds, Home Depot
• Consumer Staples: Walmart, Costco
• Financials: Berkshire Hathaway, SOFI, Bank of America, Wells Fargo
• Health Care: Lilly, Bristol-Myers
• Industrials: Caterpillar, Lockheed Martin, Boeing
• Information Technology: Apple, Microsoft, Nvidia, Broadcom, AMD, Salesforce
• Use tools like:
• Yahoo Finance
• MarketWatch

​

Your brokerage's research tools

​

Step 5: Make Your First Trade

Practice with a virtual account or simulator first (e.g., Investopedia Simulator).

​

Start with market orders or limit orders to manage price risk.

Step 6: Make Your First Trade

• Practice with a virtual account or simulator first (e.g., our Market Watch game. See instructions on next slide).
• Start with market orders or limit orders to manage price risk.
• Example:
• Choose the Stock (brokerage or IRA?)
• Click on TRADE
• Click BUY
• Trade in Dollars (Partial Share) or Full Share?
• Enter amount of dollars or shares
• Click REVIEW
• Submit (Swipe up or across)
• Congrats you are a stockholder!

Mock Stock Trading Game

GETTING STARTED

• Click on link: https://www.marketwatch.com/games/hcc-stock-trading-game-spring-2025
• Set up an account (free) with a Username and Password. Save it. This is so that you have access to the Paper Trading game as well as access to all the information on stocks. (Remember your User and Password.)
• Click on Join Game. Enter Password [PASS: 308NVine (case-sensitive)]

​

• Follow the instructions on “Xtra-Stock Trading Game” in our Money Matters Seminar Document. Scroll to bottom in the Tabs

3:00 7:00 8:30 3:00 7:00

AM AM AM PM PM

The most volume during this time. Use limit order at other times

• Trading Stocks will cost you more money if you have companies such as H & R Block do your taxes, especially if you have a lot of buying and selling. It is NOT a simple filing.

​

• Must submit a 1099 from your brokerage account which is available by Jan 31

The tax on profits from selling an investment. There are two capital gains tax categories: short-term (1 year or less) & long-term (1 year + 1 day).

Capital Gains Taxes (2025)

However, if you have made a ton of $$ on a stock, it’s okay to pay the tax man!

Stock Loss Harvesting

Tax Loss Harvesting is a smart tax strategy used by investors to reduce their taxable income by selling investments that have gone down in value. The idea is to use those losses to offset gains you made from other investments (or even regular income, up to a $3000 limit). You can apply $3000 in tax loss and then carry over the remainder until it is gone.

​

Why Use Tax Loss Harvesting?

• Lowers capital gains taxes
• Reduces taxable income
• Carries forward losses for future use
• Keeps your investment strategy intact with the right replacements

Stock Loss Harvesting

Let’s say:

• You bought Stock A for $10,000
• It's now worth $6,000, so you've lost $4,000
• You also sold Stock B earlier this year and made a $3,000 gain

​

Now you do this:

• Sell Stock A and lock in the $4,000 loss.
• Offset the $3,000 gain from Stock B with $3,000 of the loss.
• That means you don’t pay tax on the $3,000 gain.
• You still have $1,000 in leftover loss. You can use this to:

​

Offset up to $3,000 of regular income this year, or carry it over to next year.

• If you buy the same or a “substantially identical” stock within 30 days before or after selling it, the IRS disallows the loss. Must wait 31 days.
• This rule prevents people from faking a loss while staying invested in the exact same thing.

Robinhood Gold - $5 a month

​

With Gold, you get the following premium features for non-retirement, individual, and joint investing accounts:

• 4% APY on your uninvested brokerage cash with cash sweep*
• Bigger Instant Deposits*
• Professional research from Morningstar**
• Level II market data from Nasdaq**
• First $1,000 of margin borrowed is interest free. That is a great deal… but be careful.
• 3% IRA match on IRA contributions
• Access the Gold Credit Card with 3% rebate

I like this app to sort and organize my stocks.

A cryptocurrency is a digital or virtual currency that uses cryptography for security and operates on decentralized blockchain technology—meaning it is not controlled by governments or central banks. The most well-known examples include Bitcoin, Ethereum, and XRP.

​

Cryptocurrencies can be:

• Traded like stocks
• Used for payments (unwise)
• Held as speculative investments

PROS

CONS

Crypto is risky. It basically is gambling. It’s not really based on anything solid. However, it might be wise to have a very SMALL amount, just in case.

​

I wouldn’t have anything more than 5% of your total portfolio. $1000 in stocks. $50 in crypto.

Cautions:

• Don’t trade with money you can’t afford to lose.
• Avoid day trading unless highly educated and skilled.
• Be wary of “hot tips” and social media hype.
• Understand tax implications of short-term trading.

​

Wise Habits:

• Start slow.
• Keep learning.
• Don’t let emotions drive decisions.
• Use trading as a tool, not a gamble.

Cautions and Wisdom

https://www.cnbc.com/jointheclub/

You can always hop on my Stock Trading List. I forward this email and give some of my own thoughts and observations.

Just shoot me an email letting me know that you want on my email.

Tyler is a former financial advisor who does this for free now.

​

He is great and can guide you through the financial planning craziness.

​

I love him.

​

Podcast

• Investopedia - Like Wikipedia, this site will help you understand the terms and concepts necessary to know when trading stocks. You have to teach yourself. Watch videos and read as much as you can. This is real money you are investing. Sign up to receive daily email with investment tips, insights, and instruction. It is soooo worth it!!!!
• MarketWatch.com - (They also have an app, but I love the website better) - You can read more on each stock that you may be interested in trading.
• Yahoo Finance - This is a great website that give you tons of great insights.
• Morningstar

Helpful Websites

What questions do you have?

• Open up a brokerage account with Robinhood, Fidelity, Schwab, etc.
• Make your shopping list and do your homework
• Make your first BUY
• Plan on submitting your 1099 to your taxman or yourself

THIS WEEK