Something for the Indiviual Stock Investors

I have thus far focused on building a good base in our portfolio with Mutual Funds.  But those that like to dabble with Individual Stocks I have not forgotten about you.  So I am going to address a few things for them today.  Those new to the market should NOT be investing in Individual Stocks until you have a good base in your portfolio of mutual funds and you have a clear understanding of how the stock market works.  However, you should listen and look at some of the stocks I am going to talk about as this will help you prepare for the future when you are ready.

Buying Individual Stocks is totally different than buying mutual funds.  But if comes with a greater risk.  If you are not a person that can afford time in your schedule to monitor your Individual Stock holding everyday then my suggestions is that Individual Stocks are probably not you.  You should have a good knowledge base of the stock market and how things work.  Be able to do research before you buy and sell and know when to take your money and run.  We are going to take a look at some of these things together.

Doing your homework and research prior to buying or selling and individual stock is a MUST!  Don't go and buy a stock with out researching first.  You are just setting yourself up for disaster.  Pull up the stock online.  Look at the profiles and key statistics and the analyst recommendations.  Read articles about the stock you are interested in on the Internet.  Also I recommend watching CNBC, especially Jim Cramer.  Do I always agree with him.  Heck no!  But he recent talked about a stock in my personal portfolio that I latched on to long before he wised up to it, plus I got the 2:1 split.  Yes, I like Jim Cramer, but sometimes I do not agree with him on investment strategies and some times he simply misses the boat like with DSW. But on the other hand, do I agree with all the analyst's recommendations.  Absolutely not.

So lets look at DSW for a moment.  DSW split on November 4, 2013.  Does this mean you totally missed the ship?  Well not exactly as there is plenty of room for this stock to grow.  The stock split significantly below its 52 week low prior to the split.  Since the split it is currently up about 8%.  Brean Capital is calling for sell.  I disagree with them.  The overall stock analyst rate the stock at 2.4 (1=Buy and 5=Sell).  So it is right in the middle in more of a hold pattern.  I do not think this is a bad time to buy the stock, but if sure would have been nice if you could have gotten in on the split in November.

Lets take a look at Facebook (FB).  This is not a stock that I have in my personal portfolio.  It has an analyst rating of 1.8 making it a buy.  Why do I not have FB in my portfolio.  Well you can only fill your account with so many stocks.  But I agree.  This is a good buy right now.  This is not a stagnant company.  They are going places and coming up with new and better things everyday.  Mark Zuckerberg is no fool and he did not bring the company public to lose money.  He took nothing and made it into something.  And that something continues to grow.  I think you are safe here if you hold on for a long stretch.

Here are some other individual stocks that I am going to recommend you take a look at and do your own research.  I simply cannot talk about them all.  Take a look at VEEV, BBY, GME, VFC (better hurry as it splits 4:1 in December), TJX, GILD, TIF to name a few.

I would like to make one more suggestion to you.  Do NOT use your Financial Advisor and the company they work for to do your individual stock investing.  Have some extra cash and call it your "play money" that if you lost it all you would not go bankrupt or hungry or compromise your household status day to day.  You individual stock "play money" should be a small part of your portfolio.  Not the major stuff that you are dependent upon for your future.  Start with a reasonable amount that you can afford.  Do not drain your bank account.  And build and build on that money you set aside and buy and sell your way to more money.  Don't depend on your bank account to keep funneling more and more money into your individual stock account.  I suggest opening up an account with a discount broker.  I personally use Scottrade.  They charge $7.00 per trade to buy or sell and most important to me is that I don't get mass emails in my inbox from them and they don't keep my phone ringing off the hook.  But they are easy for me to access if I every need assistance, have a question or do not understand something on their website or perhaps an error message or warning I may have gotten.  I simply pickup the phone and call the local branch office and they are always great at answering my questions.  Your local branch is listed once you login to your account for easy access.

Thanks everyone.  Hope you enjoyed todays information and I wish you all the best of success.

Gus S.


Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.