I started buying stock last year, pretty much it was just 10 shares of this company 10 of that. I realized that 10 shares of any company did’nt seem enough. So how much should I have at least?
I bought stocks in popular companies, ie Microsoft, Bestbuy, Ebay, Disney, etc…
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What Is The Minimum Amount Of Stock Shares Should I Buy Of Any Company?4 comments to What Is The Minimum Amount Of Stock Shares Should I Buy Of Any Company? |
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Generally I have suggested people in my career that buying odd lot shares (buying under 100 shares) is not the best idea, unless perhaps if one is buying BRK.A or BRK.B.
I would rather be dollar cost averaging using the S&P 500 Index. Reason:
1. own the 500 largest US listed companies instead of a few.
2. monthly dividends.
3. able to reinvest dividends each month which over time increases the number of shares one will own and the greater amount of dividends paid.
4. diversification.
5. historically, this non-managed index has tended to outperform roughly 80% of all mutual funds. The longer the time period, the greater odds the index beats the funds.
For the other posters:
1. RE: MGM:
There will always be stocks that one can show if you just bought when and held now, you could have made whatever. This is not constructive or relevant investment planning.
There are also many stocks that fell 50-100% over the last 2 years. There are stock that never recovered from the 2000, 73-74, 87, and 29 Bear markets/ crashes.
A stock that drops $53 to $2.00 is a 96% drop.
That same stock that goes from $2.00 to $4.00 is a 100% gain, from that low, but still a 92% drop from the high.
Sure MGM or any stock could go higher, but the opposite is also a risk.
There is also the element of risk and overall objectives that one needs to consider.
2. RE: mutual funds:
It would be incorrect to say, “(mutual funds…have) Same return – less risk.”
- mutual funds are not all the same.
- are not always diversified.
- do not all have the same return.
- do not have the same risk.
- do not all have the same investment objectives.
- do not have the same fund manager.
- do not have the same costs and fees.
- are not any less risky compared to other investments.
You may also want to consider doing this in a ROTH IRA.http://en.wikipedia.org/wiki/Roth_IRA
“Should I open a Roth IRA or just an IRA?”http://answers.yahoo.com/question/index;…
It depends on how much your income is, how much it costs you to do a trade, and how long you plan to hold it for.
Right now is a a fairly good time for new investors to step in since everything is priced low. I believe the typical recommendation is to set aside at least 10% of your paycheck for investments. Having said that, I find that 10% of 2000 is hardly worth the $7 cost of the trade (I use Scottrade). I usually wait until I have $1000 or so to invest before purchasing any securities. Doesn’t mean I wait 5 weeks, sometimes I’m able to put half my paycheck away in one go; depends on what bills are due when.
But again, if you can only afford 10 shares at a time, keep going for it. It will accumulate and, usually, the return on investment will be greater than the cost of the trades.
In most cases it really isn’t how many shares you own, but rather where the stock goes from your initial position. For instance, you could have bought one share of lets say…MGM 3 weeks ago at a little over $1, and today it’d be worth around $8.00. That’s a humongous 800% return.
I prefer mutual fund investments. Same return – less risk.http://www.mutualfundwealth.com/