Your First Stock Investment

After you’ve read your tenth stock market 101 book and you will likely be itching to invest in your first stocks.  Before you jump the gun here is a quick checklist you should go over before you purchase so you can buy with a little more confidence that you didn’t make any silly mistakes.  Though no matter what I say you’re going to be nervous with your fist stock purchase and watch it like a newborn child.

Check Your Ticker Symbol

Everyone who has investing in stocks for any amount of time has felt the dread of hitting the buy button only to wonder if their Coca-cola investment was really ticker KO.  (Which it is.)  Take an extra minute to verify the company you are interested in is the same as the ticker you are about to purchase.  Some companies sound very similar.

Don’t Put Too Much In One Purchase

Diversification prevents the risk of a total burnout from one stock going bad.  Spread your money over 10 to 20 stocks so that your great investing ideas have a better chance of proving themselves out.  Plus, it doesn’t matter how much money you make if you die of a heart attack from stressing over the ups and downs.

Set a Stop Loss

No one can watch a computer all day long, so let the computer do the work for you.  Set an amount that you will sell the stock at no matter what.  This gets you out of a stock that is a free fall.  If you later think the stock is still a good buy you can always repurchase the stock and only eat an extra commission.  If a stock plummets on really bad news you’ll be happy you set the stop loss.

Don’t Forget Your Stocks

The stock market keeps changing.   What was a great purchase then could be a mediocre investment now.  You need to learn stock market tactics consistently to ensure your investments are still sound.  Just by continuing to follow your companies and reading good books and websites you can keeps your skills sharp.

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