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If I only have 1000 to invest in the stock market how many stocks?

October 16th, 2010 | | Tags: , , | 8 Comments | |

coinsandgrpahs

I cant diversify without losing on commission unless I make at least 3% return on each stock. I was thinking I have to put all my into one stock in order to make . I like to hold stock for days and weeks so I would lose a lot to commission. Is it safe to put all my into one stock considering I do my research?

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8 Responses to “If I only have 1000 to invest in the stock market how many stocks?”

  1. Bob Says:

    In my opinion you should invest in 25 different companies to be diversified. You can do that with a mutual fund or ETF. After having a domestic index stock fund and a international stock fund, you can think about also investing in individual companies but never have more than 4% of your total portfolio in one company.

    In addition, you should buy enough so a $14 commission ($7 to buy and $7 to sell) eats up less than 3% of your investment. That means each purchase should be at least $500 ( $700 if you are paying $10 commissions).

    Warren Buffet believes you should buy stocks with the plan to never sell. Buying and selling in less than a year and getting hit with short term capital gains is more like gambling than investing. I have owned Netflix for 6 years – my research indicated a good company that could grow. It is up 1300% (no typo) since I bought it. I think the company will continue to do well. But I have no idea what its’ stock price will do over the next few days or months.

    Remember that stock investments should be with money that you don’t need for the next 10 years. Also don’t assume you will be able to beat the market. I have about 10% of my portfolio in individual company stocks with the rest in index funds of various types. Over the last 6 years I am about 30% ahead of the market in those individual stocks overall. But I also bought Sunrise Senior Living, it had initially doubled in value but then in 2 months in 2008 it dropped by 98.5% (94% in 20 days). I don’t think investing in one stock is safe.

  2. Judy Says:

    Look into something called ETF’s.
    They are like mutual funds – but practically no fee.

    Ex: SPY
    It’s an ETF that holds companies in the S&P 500.
    Easy way to diversity a small amount of money – for very little cost.

    Here it is: http://finance.yahoo.com/q?s=spy
    Also click on the left to find the HOLDINGS.
    It holds companies such as Apple and Exxon
    Right now sellling for about 114 a share
    You could buy about 8 shares.
    /

  3. MarcThyme Says:

    Just buy $1,000 worth of DIA or SPY, which are exchange-traded funds that seek to follow the Dow and the S&P500 respectively….(or buy $500 worth of each)….then hold them for years, you’ll make a bunch…

  4. Doctor Deth Says:

    don’t invest less than $500 per transaction or the buy and sales commissions will eat up too much profit – even at only $7-10 per trade. and you should be holding stocks long enough to make more than 3% profit after commissions

    holding stocks only for "days" is ridiculous – it should be 3 months at a minimum – it’s going to take 3 days for the funds to clear after each sale before your can reinvest at your level of investment – and 99% of stocks won’t move up or down that much in a few days

  5. thomas p Says:

    Contact a discount broker in your city. The old world of excessive brokers’ fees is really a long gone concern in investing or trading. I would pick one stock and not a mutual fund or an exchange trade fund or note. All stocks are have risk associated with them. So, develop a set of rules that controls your buy and sell decisions. Try to avoid emotion. Try to avoid "buy low, sell high" because it is an impossible strategy. Stock service analysts would probably tell you a different story about about timing the market. Some even think low priced stocks are going to make us all millionaires. That is probably not true for most of us.

  6. doofuss Says:

    I suggest you invest in one no-load mutual fund. That will give you some important diversification right away. Look at the Vanguard family of funds.

  7. Party Says:

    hey there !!

    why don’t you trying investing in a stock as a whole like FTSE, NASDAQ or CAC… I suggest you better invest in a whole stock index like this one and you will for sure earn profits.

    why don’t you try out gnutrade trading platform, it might help you in a better way.

    Market talk will help you in several ways and the Help desk team also would.

    good luck

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