Lots of things have been changing in my life recently and I no longer have the money to max out my Roth IRA. But sometimes it’s not how much you put into the account, but how much money you make off the money that is already in the account. I decided that I need to start being a smarter investor. My speculative stock picks need to be researched so I don’t go into purchasing shares of a company and get hit with a 70% loss. I decided to cut most of my losses and proceed with a better plan. I decided to sell five stocks so I could purchase $1,100 shares of a new stock.

I sold all my Apple (AAPL 45% gain), Circuit City (CC 70% loss), Sirius (SIRI 15% loss), PanHandle Royalty Trust (PHX 50% gain), Intel (INTC 30% gain) shares which totaled a little over $1,200 and lost $60 dollars in commissions using my Share Builder account. This is when I realized that my old way of investing was not working. Unless you purchase a ton of shares of a company, you will not realize a great “money return”. For example- You can have a stock that went up 100%, but if you only bought $75 worth of shares. Then your real profit is only $34 dollars.

Starting now, I am purchasing stock in much larger increments which will diminish the damages of the trading commissions and also allow me to take advantage of larger profits. I also realize that I can also lose a lot more money too. That is a chance I am willing to take. I purchased $1,000 dollars worth of Nintendo (NTDOY.PK), which is now worth over $1,300. I could sell $300 dollars worth of stock to take my 30% profit off the table or all of it and the commission will be less than 1%.

After selling all of the stocks that I recited earlier, I decided to purchase $1,100 worth of E*Trade stock (ETFC). I purchased my shares using a limit order at $11.98 per share. E*Trade’s stock has fallen ever since the whole mortgage mess that happened this summer. Lots of analysts say that after everything starts calming down, the company will be worth something again. The PEG is less than 1.0, which means it is considered undervalued. I am hoping that E*Trade will bounce back to its $20.00 stock price which will give me a 67% profit.

In conclusion, if you are with a traditional online broker like E*Trade, or Share Builder make sure your profits won’t be eaten up by commissions. Buying stocks or ETF’s in larger sums of money will produce a much bigger payday for your portfolio. If you are buying in smaller increments try finding a totally free online broker. Zecco is the only one that I’ve found. I have never used this company, but I think I will once I have my life all straighten out.