Old MacDonald has a server farm

We've been doing this for nearly ten years, very lazily on and off. Huh.

ICLN is the etf that we decided that we were going to buy. So do we? It is up 13% since a year ago and meets our criteria. Honestly, it takes us so long to buy that it's weirdly anticlimactic realizing that we've made a decision. Of all the ETFs and stocks in the world why this one? We're in this for the long term and we feel a sustainable energy ETF is a good choice. This one meets our criteria within that.

Buy buy buy!

INFY, our last buy, is up. Good job. Almost 20%! Our original intent was to buy this on a perceived drop and then dump it for cash. That means that is probably time to sell. That also means that there's some potential tax implications We may have to pay capital gains tax on this. Since we've had it less than a year, it just adds to the adjusted gross income of the account holder. We're a small time operation, so that will just impact one of our members (not all that much). The tax laws for long term capital gains tax are changing so that folks at the lower income tax brackets won't have to pay any long term capital gains.

Here's some more info about the changes to the tax code. Bascially, if adding it into your income keeps in the lowest two brackets, you do not pay any taxes on those capital gains. However, if it pushes you up into a 25% or 35% tax bracket you pay capital gains tax and it goes up from there.

For us, selling doesn't impact us that much. We're going to end up paying around 15%. We could reinvest to avoid that, but we move so slowly that it's not gonna happen.

Profit!

We bought this thing, so when do we sell it?

We're talking exit strategy

We bought Infosys at $14.45 and now it is currently at $14.36, so we've only lost about $2.50 on it. Before we say oops, we have to remember that we've only had it for about a week. Hopefully with some more time, this strategy will bear out better results for this. The next question, is to probably set some sort of automated out both on the high and low end. This would allow us to cut our losses, which is a first for us.

Sorry EWZ...that's the prime example of inaction biting us in the butt.

So when do we get out? If it gains 4%, that would cover our trading costs. Is 10% enough? Sure 10% would be great. As far as a loss point, maybe 10%? It's kind of arbitrary, but at this point it seems like we have to recognize that we don't have a really great handle on how this works, so maybe having something automated is best to give us a direction. We can always revise our strategy as things go along. After all, learning is the primary goal here for us.

We were able to set a three month automatic buy/sell trigger, so we can set it and forget it for a while. Scottrade has all sorts of nifty options for doing this:

We purchased this on the hopes that it was a short term panic. If that's the case, the price will bounce back. However, if it is a more long-term adjustment, it will be going down. We'll see.

Profit!

I've been doing this for seven years, and all I got was...

Oh, here's a fun fact:

Based on our rough calculations (and assuming our dividend calculations are correct) since our first purchase in 2010, we've made a net profit of $2.57. We don't even have a lousy t-shirt to show for it.

Our recent buy brought us up in tech and a little more in financials. We are currently low in industrials and energy. See:

We're taking a look at our portfolio and deciding our next move. EWZ has been a drain on our portfolio, and we should have dumped it a while ago. We have our shared account under the name of one of our members. If we do sell EWZ, that means there will be some sort of tax implication to him. Since we've never unloaded any shares, there hasn't been anything paperwork-wise that we've had to account for. Obviously, there is a tax benefit to a loss. But, at least as we understand it now, unless he is itemizing there won't be any effect. Of course, eventually we will hopefully sell shares for a profit, which will have it's own effects. This is one of the funny quirks of being part of a small financial club, but the impacts are germane to any person investing. And it is always important to make sure that you get your forms right with IRS.

The issues with the taxes here is a matter of capital gains and capital losses. It only makes sense to sell EWZ if we can get something that will offset it. Right now, we're certain that it can't go much lower. There's no harm in letting it sit there. We could think of EWZ not as $100, but as -$400. Essentially, we're sitting on a capital loss, and we've sort of banked it. When we decide to sell something for a profit, we could get rid of that at the same time to mitigate the negative tax implications of making an actual profit (a capital gain).

Profit

Actual profit?

There are indications that this is a Bear Market, and we are at an impasse. We have two basic options, to dump stock or to hold onto it until the market comes back. 

If we dump, we are at about an 8 or 9% profit. We can decide to get back into it later

We are also at buy time for something else. Next week we need to take a look at stock valuation to try and pick something to get into. 

Profit(?)