Buying Physical Stock

• No expiry, no theta. Time is on your side. The S&P 500's worst 20-year rolling return is still positive.
• Compounding dividends. Reinvested dividends have historically supplied ~40% of total US equity returns since 1930.
• Tax efficiency. Long-term capital gains (held >12 months) are taxed at 0%, 15%, or 20% — lower than ordinary income.
• Voting rights & shareholder perks. You own a piece of the business, not a leveraged bet on its next 30 days.

• Market order: Buys immediately at the best available price. Fine for liquid large-caps (AAPL, MSFT) during regular hours. Avoid for thinly traded names or the first/last 10 minutes of the session.
• Limit order: Buys only at your specified price or better. Default choice for small-caps, after-hours fills, and anything with a spread wider than a penny.
• Stop-loss order: Triggers a market sell when the stock drops to your trigger price. Useful for swing trades; less useful for long-term holds (you'll get shaken out on noise).

Bracket orders, trailing stops, and good-til-canceled (GTC) variants exist but rarely change the outcome for buy-and-hold investors.

• No single position > 10% of your equity book unless you can tolerate watching it fall 50% overnight. Concentration builds wealth and destroys it.
• Aim for 15–25 names for a stock-picking portfolio. Fewer = idiosyncratic risk. More = closet indexing (just buy SPY/VTI).
• Dollar-cost average into core positions weekly or monthly. You give up the chance to nail the bottom; you also give up the chance to nail the top of a crash.
• Cash is a position. Holding 5–15% dry powder lets you buy fear when everyone else is selling.

• Taxable brokerage: Most flexible. Long-term gains taxed at preferential rates; losses can offset gains and up to $3,000 of ordinary income.
• Roth IRA / Traditional IRA: Tax-advantaged. Roth is tax-free at withdrawal; Traditional is tax-deferred. Use these for your highest-conviction long-term compounders.
• Lot selection matters. Switch your default from FIFO to "Specific Identification" so you can sell high-cost-basis lots first and harvest losses.
• Wash sale rule: If you sell at a loss and rebuy the same security within 30 days, the loss is disallowed. Common trap for active investors.

• The default is "do nothing." A 5-year holder doesn't need to react to a single 90-day report.
• Trim into strength. If a position gaps up 15% on earnings and is now 20% of your book, sell back to your target weight. Not a thesis change — a sizing discipline.
• Add into weakness only with a thesis. A miss + lowered guidance is not a "discount." A miss + intact long-term thesis + cheaper multiple is.
• Watch sector read-throughs. Use the Earnings Compass calendar to see what your holdings' peers and customers are reporting.

1. Why this stock, in one sentence?
2. What price would prove me wrong?
3. How does this fit my overall allocation?
4. Am I buying because I have new information — or because the price moved?
5. Have I checked the next earnings date? (Don't buy 24 hours before a print "by accident.")

• Automate contributions. Recurring buys remove emotion. Set it, forget it.
• Reinvest dividends in tax-advantaged accounts. Take them as cash in taxable accounts so you can rebalance intentionally.
• Rebalance annually. Sell winners back to target weight, buy losers up to target weight. Forces "sell high / buy low" behaviorally.
• Track cost basis & tax lots. Your broker does it; check it once a quarter so there are no December surprises.