Purchasing Stocks. Basic Question, help Flagpole or others

Attempting to time the market, for stocks that you intend to hold, is generally a bad strategy.

Agreed with the below. Depends on your strategy. Will you be holding these long term? If you want to day trade stocks then you need to come up with a real plan. If you plan to buy and hold for years then $96 vs $99 doesn't matter.

HMMMMMMMMMMMMMM wrote:

Agreed with the below. Depends on your strategy. Will you be holding these long term? If you want to day trade stocks then you need to come up with a real plan. If you plan to buy and hold for years then $96 vs $99 doesn't matter.

Sorry I forgot to include that. Yes, I plan to hold long term. Thank you for the response.

qwertyu wrote:

Hi guys,

Basic question on purchasing stocks:

I have decided on some stocks I am going to invest in and how many shares I will purchase of each.

After deciding this, do you immediately purchase the stock or wait for the price to drop slightly and monitor the stock for a while?

For example, if the stock price fluctuates between $96-100 on a monthly basis but is consistently rising. Do you wait for the stock to drop back down to $96 or purchase it at $99 in case it rises and you could miss an increase in the stock price?

Basic question but I was unsure.

Thanks

Hi, Flagpole!

the odds of your beating the stock market are infinitessimal. this truth is well established.

buy an index fund from a mutual fund. vanguard is probably the cheapest.

Wait and buy low. But it might not drop. So you can't wait forever.

qwertyu wrote:

Hi guys,

Basic question on purchasing stocks:

I have decided on some stocks I am going to invest in and how many shares I will purchase of each.

After deciding this, do you immediately purchase the stock or wait for the price to drop slightly and monitor the stock for a while?

For example, if the stock price fluctuates between $96-100 on a monthly basis but is consistently rising. Do you wait for the stock to drop back down to $96 or purchase it at $99 in case it rises and you could miss an increase in the stock price?

Basic question but I was unsure.

Thanks

there is no way to know when to buy stocks.

many people will split the baby: buy half their total share count immediately, then keep some cash ready if the stock falls to a better price.

but sometimes it never drops...

it's a guessing game.

agip wrote:

there is no way to know when to buy stocks.

...

it's a guessing game.[/quote]

wrong. you can be systematic.

choose index funds, and invest regularly. take advantage of "dollar cost averaging."

do some research. this message board obviously is not the place for that.

sayer of hi wrote:

qwertyu wrote:

Hi guys,

Basic question on purchasing stocks:

I have decided on some stocks I am going to invest in and how many shares I will purchase of each.

After deciding this, do you immediately purchase the stock or wait for the price to drop slightly and monitor the stock for a while?

For example, if the stock price fluctuates between $96-100 on a monthly basis but is consistently rising. Do you wait for the stock to drop back down to $96 or purchase it at $99 in case it rises and you could miss an increase in the stock price?

Basic question but I was unsure.

Thanks

Hi, Flagpole!

Nope. WEJO, DO AN IP CHECK, AND IF I LIE, BAN ME FOR LIFE!!!!!!

I do not buy individual stocks even though I am now in a position to based on my own criteria.

You should only buy individual stocks if all of this is true:

1) You have zero debt including owning your home outright.

2) You continue to put 15% minimum into stock mutual funds for retirement.

3) You buy no fewer than 5 stocks and they are all in different market sectors and each with no more than about 20% of your total stock buy.

Once that is all in place, have at it. No need to wait for the stock to drop...just buy if your research tells you you should. Your safety net is the other stocks you have in your mutual funds for retirement.

be smart wrote:

agip wrote:

there is no way to know when to buy stocks.

...

it's a guessing game.

wrong. you can be systematic.

choose index funds, and invest regularly. take advantage of "dollar cost averaging."

do some research. this message board obviously is not the place for that.[/quote]

the OP was talking about individual stocks, not funds. I believe. I'm saying timing buys of individual stocks is guesswork. Mutual funds are differnet - sure you can be systematic there.

qwertyu wrote:

Hi guys,

Basic question on purchasing stocks:

I have decided on some stocks I am going to invest in and how many shares I will purchase of each.

After deciding this, do you immediately purchase the stock or wait for the price to drop slightly and monitor the stock for a while?

For example, if the stock price fluctuates between $96-100 on a monthly basis but is consistently rising. Do you wait for the stock to drop back down to $96 or purchase it at $99 in case it rises and you could miss an increase in the stock price?

Basic question but I was unsure.

Thanks

You purchase it now.

Flagpole wrote:

I do not buy individual stocks even though I am now in a position to based on my own criteria.

You should only buy individual stocks if all of this is true:

1) You have zero debt including owning your home outright.

2) You continue to put 15% minimum into stock mutual funds for retirement.

3) You buy no fewer than 5 stocks and they are all in different market sectors and each with no more than about 20% of your total stock buy.

Once that is all in place, have at it. No need to wait for the stock to drop...just buy if your research tells you you should. Your safety net is the other stocks you have in your mutual funds for retirement.

Good advice, brother!

Flagpole wrote:

I do not buy individual stocks even though I am now in a position to based on my own criteria.

You should only buy individual stocks if all of this is true:

1) You have zero debt including owning your home outright.

2) You continue to put 15% minimum into stock mutual funds for retirement.

3) You buy no fewer than 5 stocks and they are all in different market sectors and each with no more than about 20% of your total stock buy.

Once that is all in place, have at it. No need to wait for the stock to drop...just buy if your research tells you you should. Your safety net is the other stocks you have in your mutual funds for retirement.

i'm not sure i agree with all three of your criteria.

There is no reason to not have a mortgage, assuming its at a ridiculous low fixed rate. I can make way more in the market (with an S&P ETF) than my mortgage rate so i'm not rushing out to pay off my mortgage. plus i will take the interest deduction.

I occasionally buy stocks but consider them in the same category of gambling. Its fun, i assume to lose some, and i enjoy it.

I agree you should not be buying stock as an investment for retirement, savings, etc. Not individual funds. Buy a broad ETF.

I do play with individual stocks because i enjoy researching the companies. I enjoy seeing what i can do. etc. Over 25 years i usually do better than average. not much. I sure have had my share of dogs but i have also had some wins. Overall, i'm up. True a rising tide brings all boats and the tide has been a rising for a while.

A quick back of envelope calculation shows i currently have about 2% of $2M+ in individual (not eft or mutual funds) stocks. A very small amt. As i said, i play in this area. And if i lost it all, so be it....

IMHO....thanks all.

Well, then you are wrong.

You can buy stocks within mutual funds in a retirement vehicle while still having a mortgage, but individual stocks are too risky which is why you need to have ZERO debt before buying them.

Dave Ramsey wrote:

Flagpole wrote:

I do not buy individual stocks even though I am now in a position to based on my own criteria.

You should only buy individual stocks if all of this is true:

1) You have zero debt including owning your home outright.

2) You continue to put 15% minimum into stock mutual funds for retirement.

3) You buy no fewer than 5 stocks and they are all in different market sectors and each with no more than about 20% of your total stock buy.

Once that is all in place, have at it. No need to wait for the stock to drop...just buy if your research tells you you should. Your safety net is the other stocks you have in your mutual funds for retirement.

Good advice, brother!

Don't pat yourself on the back too much there Dave. #3 is advice from Jim Cramer. MY advice comes from a lot of different sources, not just yours.

Flagpole wrote:

sayer of hi wrote:

Hi, Flagpole!

Nope. WEJO, DO AN IP CHECK, AND IF I LIE, BAN ME FOR LIFE!!!!!!

Yes. You post from multiple devices and you pass the "IP check". This isn't 2001 anymore.

You are arguing with yourself under multiple names. You are the king of sock puppets, zipperman. I mean answer man. I mean coolio. I can't even keep all of them straight.

Even a mortgage with a low rate provides an almost 100% return on any early pre-payments you make. Paying a mortgage for 30 years is asinine.

I've done the math to compare simply pre-paying my mortgage versus investing the money. I would need to make 7% yearly to barely win on the stock market. I may as well take the sure deal of paying my home off. I put money in my Roth IRA and the rest into the house. In less than 30 years I can still choose to invest the money if I want and I will have no debt.

Shoebacca wrote:

Even a mortgage with a low rate provides an almost 100% return on any early pre-payments you make. Paying a mortgage for 30 years is asinine.

I've done the math to compare simply pre-paying my mortgage versus investing the money. I would need to make 7% yearly to barely win on the stock market. I may as well take the sure deal of paying my home off. I put money in my Roth IRA and the rest into the house. In less than 30 years I can still choose to invest the money if I want and I will have no debt.

30 years is longer than i recommend, agreed. a nice fixed 15 year though is hard to beat.

i've done the math as well and worked in finance for 30 years and your 7% is just wrong.

And to Flagpole, how much more clear can i be. I did NOT recommend as an investment vehicle. I clearly said "like gambling". I don't play craps as an investment vehicle. Some people spend their fun money on fancy cars. Others on expensive booze. There is nothing wrong with using those funds for buying individual stocks.

Also this idea that you have to have zero debt before doing anything is simplistic and naive. There are many reasons to have debt. Most tech companies today start with significant VC funding (debt). Most people buy a home with debt. If you buy a car with 0% APR payments you are making good use of debt. True, many people get in trouble with debt, especially CC. That doesn't mean its wrong for everyone.

Further, to think that ALL stocks are too risky is also naive. You can't possibly agree that beta measurements mean nothing.

Instead of dismissing people out of hand "Well than you are wrong", understand discussions like this are nuanced and what is good for many may not be good for all. Or are you so unsure of your arguments that you have to act like a 3rd grader. But you won't agree with this, you'll again go for a "nana nana boo boo, stick your head in doo doo response"....