Stock buying question?
I am a beginner investor; I have some money to invest in the stock market. I
have also selected the particular stocks to buy. Now, what method do you
recommend in allocating the total money for each individual stock?
- GeneLv 41 decade agoFavorite Answer
First of all, put some money in bonds, some money in secure money markets and for stocks divide it up accordingly. Mutual funds are best. The mutual funds that go up in good times and bad are Gaming stocks (like Aztar, etc...) and a mutual fund of high end stores and the like that caters to billionaires. The market can do whatever it wants, they don't care. There is a mutual fund that has Tiffany's in it as well as 4 Seasons, Nieman Marcus, etc... Also the baby boomers are getting older and a mutual fund of pharmaceuticals would be good which include Abbott Laboratories, Eli Lilly, Bristo-Myers, etc... That way if one company has a patent expiring and their medication is going generic or if one is being sued, you won't feel it because the others will soften the blow.
- lizzgeorgeLv 41 decade ago
Make sure you can invest at least $1000 in each individual stock (preferably 50 or 100 shares at the least). Otherwise the stock will have to go up tremendously before you even break even after commissions.
I made that mistake when I was first investing--I didn't have much money so I bought 6 shares of 6 different stocks. I kept them for years and they all went up by several dollars each (or more). But I barely made any money. I'd have been better off only buying one stock or just sticking the money I had in an index fund (which is where I put my "real" investments anyway).Source(s): banker
- Anonymous1 decade ago
I agree with Lizzg, the 2nd answer. I have alot of portfolios in my investment games. Those with a couple shares are no good. Return can rarely catch up commission. For example, you have 4 shares of a stock, which goes up from $50.00 to $55.00; and your commission is $9.99 per trade.
so, $5 x 4 = $20 profit
- 9.99 buy
- 9.99 sell
Your return will be 0.02 (2cents) heheh nice huh??
Also, very hardly a stock goes from $50 to $55
Hope this example helps!!!!
- christlerLv 43 years ago
Any time is a superb time to purchase stocks. It in basic terms relies upon on which corporation s you make investments in. by making an investment in vast agencies whose inventory expenditures in many cases stay on an same relative fee are a lot less in all likelihood to generate you any funds. making an investment in small agencies, supplies the corporation the chance to augment and carry their inventory expenditures, having you being waiting to promote the stocks at extra then you definitely had before bought, regrettably, this also generates chance, if the corporation fails and forecloses, you not in any respect acquire you funds again, and your stocks are just about valueless.
- How do you think about the answers? You can sign in to vote the answer.
- Just_curiousLv 41 decade ago
Spread your money to across different sectors. If you have a list of companies that are different sectors. Then buy the two best company in that sector.
However, you must also take the advise from the previous answers. You should have enough money to buy enough share s to spread amount different companies.
- James NLv 41 decade ago
~ It's God's money... Ask Him first~Source(s): ~ The Word