I'm hoping that some well-educated people read my blog. Because I am trying to gather information.
For about a year now, I've been looking at stocks. I haven't been studying them, per se. Just looking. Seeing what different stocks cost and what companies have been doing well. There are a few that I am keeping an eye on because I'd like to buy some shares.
But until recently, that's as far as I went. Just looking.
Well, now I want to buy some stock. In a specific company. The problem is that I don't know how reliable the company is. I've only been watching them for a month.
Why am I choosing this company? Well, I'll tell you. A few months ago, I read an article online about a new product that would hit the market in the next year. I thought it was really cool but quickly forgot about it. But then, just recently, I was in AC, and heard about the same product and company from a salesman who was convinced that this new product would shoot their stock up through the roof.
I took this as a sign to look into the company. I've been watching their stock numbers, and reading speculation articles. It all looks good. Except for one thing. I don't anything about finances, business, or stocks. I look at the stock pages and it makes as much sense as fractals to me.
SO, here's where the smart people come in. How do you figure out if a company is good? What numbers are important? Etc etc etc...
I'd rather not share the stock right now (not that it's a secret or anything)... but maybe later on.
Tuesday, June 13, 2006
Lock Stock
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1 comment:
Don't worry your pretty little head about what the numbers mean, unless you really want to get into it. It takes some dedication, if it's a skill you'd like to master. Instead, hire a financial advisor. These days, unless you're really savvy in this stuff, you need a financial advisor like you need a doctor. I like to think of myself as a "do it yourself" type of person, but not when it comes to my money.
Before you decide to buy tons of shares of this stock, I would *highly* recommend visiting a financial advisor. I have one, and he is awesome. He did a complete financial analysis of me so I could see what areas I needed to work on - was I saving enough money for retirement? Was I making enough to do the things I wanted to in my current phase of life? What about saving $ now to spend on my unborn kids' college? Etc.
And of course, we got into investing. Basically, the rule of thumb is to diversify. It's a must!
Say you put tons of $ into the Hot Stock Corp., and then they take a hit...or their industry takes a hit...or whatever.... (this happens in the travel industry all the time, for example) Then the stock value plummets. And you're stuck. That's not cool if all you have is invested in that one stock. So you need to diversify to protect yourself....
Look at those poor Enron employees! Enron stock was the hottest thing out there, and some people put their entire life savings into it! And then one day it all went to hell. Those people are now screwed. DON'T set yourself up for that kind of fall. And even though you're only in your 20's, it would still take you a long time to recover from that kind of thing.
A financial advisor will educate you on all different ways to invest your money - IRAs, mutual funds, bonds, hedge funds, annuities, etc. And they'll assess your current situation to see how you should allocate your $. They develop a plan that will represent a balance of different industries' stocks. Some will overperform, some will underperform. You adjust your portfolio to what works for you. And you'll come out ahead in the end!
At the same time, if you're still interested in this next big stock thing, then I guess you could go for it. But do so in moderation, and diversify the rest.
Good luck!
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