[How to get started buying stocks]

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Jugee
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Joined: Tue Sep 05, 2017 5:53 pm

[How to get started buying stocks]

Post by Jugee » Sun Oct 15, 2017 4:26 pm

I am very new investing. I have a 401 K through work and Roth IRA's. I was wanting to learn more about investing in stocks and wondered if it was a good idea or if it's even possible to buy one stock at a time and see how I do. If that is something that is feasible which website would I do that through. What is typically the cost for 1 stock? Thanks in advance!

Johnsson
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Location: Central PA

Re: Stocks

Post by Johnsson » Sun Oct 15, 2017 4:33 pm

Do no buy stocks until you know more (if ever). Mutual funds are generally more appropriate.

Start here... https://www.bogleheads.org/wiki/Boglehe ... philosophy

and here... https://www.bogleheads.org/wiki/Three-fund_portfolio

Search this forum and read how others have gotten started. There's a wealth of information in this forum (literally). :wink:

Helo80
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Re: Stocks

Post by Helo80 » Sun Oct 15, 2017 4:37 pm

Yes, it is feasible to buy one share of a stock at a time. However, you'll get eaten up in fees on buying and selling ($5 to $9 when buying, and again when selling).

If you buy 1 share at $100, you'll pay say $107 for the transaction ($100 per share plus $7 avg commission)
When you sell, you'll pay another $7 for the broker commission and get whatever the price of the share is.

So, basically buying a single share, you'll have to see that $100 grow at least 14%, or $14 to break even... But, keep in mind, you'll have to pay capital gains tax on the $14 earned so really, you need that single share to grow 15 or 16% to break even.

Generally when people buy stock, they buy a lot more than one or two shares at a time. Sometimes 20, 100, 1000 or more.

Overall though, there really is no point in buying single shares of stock if you want to get your feet wet in investing..... I think you'll be much, much happier opening an account at Vanguard or Schwab and buying Vanguard/Schwab ETFs respectively...

Jugee
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Joined: Tue Sep 05, 2017 5:53 pm

How to get started buying stocks

Post by Jugee » Sun Oct 15, 2017 9:29 pm

[Thread merged into here, see below. --admin LadyGeek]

Hi. I'm 52 and have been saving some money in a savings account, I have a 401K at work and I have a Roth IRA. I was interested in buying stocks and wondered if it was possible to start slow to get my feet wet and just buy one or two stocks at a time. If that is possible which site is best to do that?

Thank you

AlohaJoe
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Location: Saigon, Vietnam

Re: How to get started buying stocks

Post by AlohaJoe » Sun Oct 15, 2017 9:44 pm

Jugee wrote:
Sun Oct 15, 2017 9:29 pm
Hi. I'm 52 and have been saving some money in a savings account, I have a 401K at work and I have a Roth IRA. I was interested in buying stocks and wondered if it was possible to start slow to get my feet wet and just buy one or two stocks at a time. If that is possible which site is best to do that?
There are numerous brokerages out there, along with many review sites that compare them and explain the pros & cons of each. ETrade, Fidelity, Charles Schwab, Vanguard, Interactive Brokers, and so on. If you type "brokerage review" into Google you'll find lots of stuff.

You shouldn't be buying stocks, though. I'd recommend you pick up one of the several books recommended in this forum and follow the investing advice in them instead.

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Sandtrap
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Location: Hawaii😀 Northern AZ.😳

Re: How to get started buying stocks

Post by Sandtrap » Sun Oct 15, 2017 9:44 pm

Some helpful links:
Bogle Philosophy
https://www.bogleheads.org/wiki/Boglehe ... philosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Boglehe ... art-up_kit
Define General Investment Goals and Objectives
https://www.bogleheads.org/wiki/Invest ... _statement
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Post format
viewtopic.php?f=1&t=6212

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Taylor Larimore
Advisory Board
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Location: Miami FL

Re: How to get started buying stocks

Post by Taylor Larimore » Sun Oct 15, 2017 10:02 pm

Jugee wrote:
Sun Oct 15, 2017 9:29 pm
Hi. I'm 52 and have been saving some money in a savings account, I have a 401K at work and I have a Roth IRA. I was interested in buying stocks and wondered if it was possible to start slow to get my feet wet and just buy one or two stocks at a time. If that is possible which site is best to do that?

Thank you
Jugee:

Before buying stocks, read this:

What Experts Say About Buying Individual Stocks vs. Mutual Funds

I've tried it. It is a Loser's Game.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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CyclingDuo
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Re: How to get started buying stocks

Post by CyclingDuo » Mon Oct 16, 2017 9:19 am

Jugee wrote:
Sun Oct 15, 2017 9:29 pm
Hi. I'm 52 and have been saving some money in a savings account, I have a 401K at work and I have a Roth IRA. I was interested in buying stocks and wondered if it was possible to start slow to get my feet wet and just buy one or two stocks at a time. If that is possible which site is best to do that?

Thank you
The good news is that you already own stocks (assuming you have index and mutual funds in your 401k and Roth IRA).

Your core position should be owning the entire market. Only then would anyone possibly seek a very small percentage of their investments in a position play, or "mad money" investment in individual stock(s). There is a HUGE learning curve in terms of educating yourself about the sectors of the market, the economic business cycle and how it impacts the various sectors, accumulation vs. distribution of stocks by the big players, fundamental and technical analysis, type of company and stock, and on and on. Without doing all of that - it's a very large speculative gamble if you just want to "get your feet wet". Many of us here would say that not only would your feet get wet, but you could easily lose your shirt in the process of seeking alpha. In a bull market such as we have been in, a lot of mistakes or one's feigned stock picking "ability" can be covered up with a broad market advance such as we are experiencing.

The risk tolerance of owning any individual stock(s) requires a long leash - longer than many can tolerate. Even with a well diversified portfolio, chances are most will track or come close to tracking the market provided one buys and holds for long durations. Chances of violating that discipline is high - which is why this site focuses on owning the entire haystack. Why go through the pain and bother of picking a good mix of individual stocks and sweating the ups and downs as the analyst upgrades/downgrades hit the stock, quarterly earnings may swing the price wildly, or a corporate/management blunder or legal challenge, or a government entity's legislation could erase tremendous gains in less than a minute if you could own the entire market to mitigate individual company losses/failures/wild swings?

If you are interested, read Investors Business Daily, read everything at JoeFahmy.com, and make sure you understand investing, speculating, short term, long term, and what drives stock prices. There are many Bogleheads that own both: index funds, and have some investments in individual stocks.

CyclingDuo
(Disclaimer: We invest in Index Funds/Bond Funds/ETF's/REITS/MuniBonds/CD's/Alternative Investments/Individual Stocks/K-1)

Slothmeister
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Joined: Sun Sep 10, 2017 11:48 am

Re: How to get started buying stocks

Post by Slothmeister » Mon Oct 16, 2017 10:26 am

Jugee wrote:
Sun Oct 15, 2017 9:29 pm
Hi. I'm 52 and have been saving some money in a savings account, I have a 401K at work and I have a Roth IRA. I was interested in buying stocks and wondered if it was possible to start slow to get my feet wet and just buy one or two stocks at a time. If that is possible which site is best to do that?

Thank you
To answer where, I would consider where you house your 401K and Roth IRA at this time. If they're in the same spot, see how that site compare's to others and if it's comparable, then I'd do it there. It's easier to keep everything organized when it's in the same location.

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LadyGeek
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Re: [How to get started buying stocks]

Post by LadyGeek » Mon Oct 16, 2017 3:13 pm

Jugee - It's best to keep all the information in one spot. I merged your updated question back into the original thread, which is in the Investing - Help with Personal Investments forum. This isn't a big deal, don't worry about it.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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nedsaid
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Re: [How to get started buying stocks]

Post by nedsaid » Tue Oct 17, 2017 1:20 pm

Jugee wrote:
Sun Oct 15, 2017 4:26 pm
I am very new investing. I have a 401 K through work and Roth IRA's. I was wanting to learn more about investing in stocks and wondered if it was a good idea or if it's even possible to buy one stock at a time and see how I do. If that is something that is feasible which website would I do that through. What is typically the cost for 1 stock? Thanks in advance!
My recommendation is to use the broad index funds like US Total Stock Market Index and Total International Stock Index for your stock investments. It is both a very cheap and very efficient way to invest.

I have done individual stocks since 1988 and own 18 stocks in a brokerage IRA and 4 stocks in DRIP plans. My analysis of my performance concludes that I have about matched the market. Depending upon when I peek, I either have beat the market by a little or trail it by a little when I look back 10 and 15 years. A lot of fun but little to show in excess performance over a simple index fund.

I also own active stock funds and they fall into three camps: earnings and price acceleration, value, and quantitative (enhanced Indexing). I have had mixed experiences with these, all three types have seemed to have cooled off in recent years. Earnings and price acceleration as a strategy tends to run hot and cold. Value has been out of favor since the 2008-2009 financial crisis and bear market. The quantitative funds used to reliably beat the market by about one percent a year but in recent years have been trailing the market, this goes to show that markets are dynamic. My analysis has shown that my portfolio performance has not been hurt but I have not achieved excess performance in recent years.

Index funds take very little time to manage, pretty much all there is to do is rebalance your portfolio. They are very cheap and you are always assured of getting the market return.
A fool and his money are good for business.

David Scubadiver
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Re: [How to get started buying stocks]

Post by David Scubadiver » Tue Oct 17, 2017 1:42 pm

You can buy individual stocks and see how you do and you can do so with low transaction fees. Consider m1finance which will let you invest commission free up to $1,000 and let you buy fractional shares. You can create an entire portfolio with a little bit of money and see how you do.

If you like it, they charge “only” .15% for portfolioos of 100,000 or more. Otherwise they charge .25% of your portfolio. .25% is kind of high in my opinion. But, if you want to pick your own portfolio and don’t have enough to create a diversified portfolio of individual stocks, it is a good way to go. On 10,000, .25% is $25 a year.

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